Tether is Facing Yet Another Fraud Investigation By DOJ

It seems Tether is in hot waters again. Tether executives are under Department of Justice investigation for alleged bank fraud, according to a Bloomberg story citing anonymous sources. DOJ is conducting a probe into early days of Tether, regarding company concealing from banks that transactions were crypto related.

In response to the news, Tether released a statement, “Tether routinely has open dialogue with law enforcement agencies, including the DOJ, as part of our commitment to cooperation and transparency.” DOJ declined any comments regarding the investigation.

Tether's stable coin USDT is the third biggest crypto currency by market cap, heavily used by crypto traders as a shelter from nasty crypto market price fluctuations. Being stable means USDT is pegged 1:1 with US dollar and every USDT is actually backed by real US dollar.

But many disagree with company's claim that its coins are backed by US dollar reserves(80%), savings and other investments. Earlier this year Tether already settled a fraud investigation by New York Attorney General's Office, which found that tether is involved in dubious financial practices and it's claims of USDT being fully backed were not true. Last week, amid rising concerns of crypto community, Tether promised a much awaited audit in coming months.

If found guilty in DOJ's probe, it would be a major blow to not only Tether's image, but the whole crypto world which relies heavily on Tether's stable coin.