Justice Department Reopens Tether Bank Fraud Investigation

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Last Updated on November 1, 2022 by Bitfinsider

The Justice Department’s investigation into the contentious cryptocurrency Tether has been having trouble coming to a resolution. A new team is now attempting to determine whether the executives who created the well-known stablecoin engaged in criminal activity.

According to sources who had insider knowledge, federal prosecutors in Washington informed top Tether officials last year that they could face charges for allegedly manipulating banks they used to transport currency. However, according to those with knowledge of the situation, the case has been moved within the department following months of legal battle.

US Attorney Damian Williams in Manhattan took over the investigation recently. His office, which is situated in the Southern District of New York, has been one of the most aggressive in seeking justice for alleged cryptocurrency crimes and recently succeeded in getting a member of one of Tether’s payment processors to enter a guilty plea.

According to veteran federal prosecutors, the rare choice to reopen an investigation at such a late stage highlights the complex legal landscape surrounding the quickly evolving field of digital currencies. They added that the Southern District office may have an advantage in assembling evidence or identifying additional sources of information due to its experience tracking money transfers in banking and cryptocurrency investigations.

Robertson Park, a partner at Davis Wright Tremaine who formerly spent two decades in the Justice Department’s fraud department, said that transferring cases “doesn’t happen often and there’s going to be pretty individual, unique circumstances each time.” But he added that it makes sense and could become increasingly regular to refer crypto situations to specific offices. “There’s a steep learning curve for folks who get involved in these investigations and probably a fairly limited number of people who have real experience and understanding.”

Tether’s spokesman declined to comment before this piece was published. Tether referred to it as “old news that isn’t even factual” in a statement that was later published online.

The DOJ “does not appear to be actively investigating Tether,” it said in the statement. “Tether executives have had no interactions with the DOJ in connection with any investigation for well over a year and the DOJ does not appear to be actively investigating Tether.” Tether said that it engages with governments all over the world and that it has regular, transparent communication with law enforcement, including the Justice Department.

As we continue to set the standard for transparency in the industry, it was described as “business as usual” at Tether. Any assertions to the contrary are outright lies.

Williams’ office and the Justice Department’s representatives both declined to comment. An probe does not guarantee that charges will be brought.

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