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Amid the struggle to maintain access to the global banking system, the companies behind Singapore-based USDT stablecoin issuer Tether used a mix of fake documents, obscured identities and shell companies, according to a new bombshell report. wall street journal,
usdt Tether claims that the value is pegged to the US Dollar and backed 1:1 with US Dollars/liquid equivalents. USDT is the largest stablecoin by market capitalization, with $71.124 billion in coins currently in circulation.
Tether’s trading volume is typically in the region of Bitcoin And ether Joint. According to Coinmarketcap, USDT saw a trading volume of $37.239 billion in the past 24 hours, versus $25.65 billion for bitcoin and $9.7 billion for ether.
Tether and backers use unorthodox tactics to maintain banking access
According to the WSJ, Tether’s use of unorthodox tactics to maintain access to the global banking system began in 2017, when Wells Fargo & Co. stopped processing transactions from the crypto firm’s multiple bank accounts in Taiwan. Tether said in a lawsuit against the bank at the time that it was “a potential threat to their business”.
Documents cited by The Wall Street Journal showed that the companies behind Tether opened new accounts in Taiwan that were held in trust by Hylab Technology Ltd. executive Chris Lee, although the accounts were opened in the name of Hylab Holdings Ltd. Meanwhile, a separate account was opened in Turkey under a company called Deniz Royal Dis Ticaret, an account that has since been accused by the US Department of Justice of being used to launder money for a terrorist group.
A sister company of Tether, Bitfinex, reportedly moved over $1 billion to a bankrupt Panama-based company called Crypto Capital Corp, which was known for opening shell companies to open bank accounts for crypto firms. Bitfinex now claims it was defrauded by Crypto Capital Corp, which seized assets worth around $850 million over alleged bank fraud and money laundering.
The documents also reveal fraudulent tactics used by Tether and its backers to expand US banking access with Signature Bank of New York. In 2018, Signature had already closed two accounts linked to Tether and its affiliated firms, while also rejecting an account application from Bitfinex.
However, aviation fuel broker AML Global soon approached Signature Bank for an account, claiming it wanted to use the account to trade cryptocurrencies on US-based crypto exchange Kraken to hedge its global currency risk. wanted to use Reportedly, the account application did not disclose that Christopher Harborne, the owner of AML Global, also owns approximately 12% of Tether and Bitfinex, but under a different name, Chakrat Sankrut.
Tether was previously blacklisted because a signature bank felt it was trying to evade anti-money laundering measures when previous accounts for Tether and a related company were closed. The AML Global account was granted provisionally, but was soon closed after Signature Bank officials noticed that AML Global claimed the account activity was linked to Bitfinex, not Kraken. .
crypto market plunge
Major cryptocurrency prices plummeted on the latest WSJ report, which will give critics of Tether more ammunition to whip up FUD. Some claim that USDT is not backed 1:1 by the US Dollar or equivalents as Tether claims. Bitcoin was trading around $22,300, down about 4.8% over the past 24 hours, while Ether was trading around $1,560, down about 5.0% over the past 24 hours, both following the release of the report. were down about 1% from
If Tether experiences a massive bank run and, as it happened with FTX, it could be disastrous, at least in the short term, for crypto markets, hence the plunge in the wake of the latest report. USDT is a major source of inbound liquidity in the crypto space.
