Tether, the largest stablecoin by market cap, is under investigation by federal prosecutors in Manhattan for potential money laundering and sanction violations. Tether denounced the report as unverified speculation. However, the crypto market data indicates that rumors regarding the probe against the stablecoin have heavily impacted the entire crypto market. Here is what you should know.
Tether Faces US Probe Over Alleged Criminal Activity
It was on Friday that the media report regarding the probe against Tether for potential money laundering and sanction violation was released by a prominent US media source. The report claimed that federal prosecutors in Manhattan are investigating the possible use of Tether in illegal activities like drug trafficking and terrorism.
Tether’s Denial of Allegations
Tether was swift to respond to the report. It dismissed the report as unverified claims. The company pointed out how it proactively cooperates with law enforcement to prevent the misuse of its stablecoin.
History of Legal Actions against Tether
It is not the first time that Tether has faced legal scrutiny. In 2021, the Office of the New York Attorney General fined Tether and its parent company, iFinex, a huge sum of $18.5 million for illegally operating in the state. In the same year, it also faced a massive penalty of $41 million from the Commodity Futures Trading Commission, for engaging in illegal transactions.
The latest report regarding the probe may bring more challenges to Tether’s reputation and regulatory standing.
Tether’s Role in the Global Crypto Economy
With a market cap of $120,101,098,456, Tether is the largest Stablecoin by market cap. As it is a stablecoin which is pegged to the US dollar, it plays a vital role in crypto trading and as a hedge against volatility, especially in regions with limited access to the dollars.
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Crypto Market See Price Drops After Report
The entire crypto market has faced the pressure of the media report against Tether. The cryptocurrency market has seen a decline of 3.5% in the last 24 hours. Almost all the top ten cryptocurrencies have recorded a drop in the said period. Bitcoin and Ethereum have reported drops of 1.3% and 1.6%, respectively. The total market cap of Altcoins, excluding the top ten, has registered a sharp fall from 9.76% to 9.33% on October 25. The Meme Coin market has shown a drop of 5.3% in the last 24 hours.
In conclusion, the latest probe into Tether has reignited concerns around regulation in the crypto market, impacting prices across the sector.
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