Tether And Bitfinex Used Fake Documents, Shell Companies To Get Banking Access: WSJ Report

Since the earliest days of the cryptocurrency industry, Tether, the issuer of the world’s largest stablecoin by market capitalization, USDT, has been shrouded with controversies and numerous accusations. What comes as the latest blow to the growing stablecoin maker, a report by WSJ states that the company leveraged falsified documents and shell companies to gain banking access at a time when they were facing difficulty to access the global banking system.

Tether’s Illicit Activities

Both Tether, which manages the $71 billion stablecoin, and its sister business Bitfinex, which is one of the largest cryptocurrency exchanges in the world, found themselves in a vulnerable position in 2018, when they lost access to the traditional banking system. This presented what could be described as an “existential threat” to their company.

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According to the report, a cache of emails and files that were reviewed by the WSJ reveals that an ongoing effort was made to remain connected to the banking system. The corporations behind USDT frequently masked their true identities by operating under the guise of other companies or individuals. However, the usage of third parties resulted in a few hiccups, including the seizure of assets worth millions of dollars and connections to a group that was officially recognized to be indulging in terrorism.

Emails Show Major Foul Play

Among the various emails observed by the journal, one of them was by Stephen Moore, a part-owner of Tether Holdings Ltd. The email stated that a major USDT trader in China was trying to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal”. Moore further went on to add that they should stop trying to open accounts as it became too risky to continue using the phony sales invoices and contracts, that he had signed.

Moore was quoted as saying:

I would not want to argue any of the above in a potential fraud/money laundering case.

Both Tether and Bitfinex have been under serious investigation several times and back in 2021, they even settled a case with the New York Attorney General — where they were subjected to abide by routined reporting of funds and financial dealings. As things currently stand, USDT’s price remains pegged to its one-dollar value at a $71 billion market cap.

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