Tether, the issuer of the largest stablecoin by market cap, USDT, is again under scrutiny following allegations related to its use in financing terrorism. Tether has been previously criticized for its potential role in enabling governments to bypass sanctions and for being linked to illicit activities such as money laundering. The company has consistently denied these allegations and has pledged to support authorities in their investigations.
Consumers’ Research Campaign Against Tether
The nonprofit firm Consumers’ Research has launched a campaign accusing Tether of being involved with terrorist organizations, human trafficking groups, and the governments of China and Russia. Will Hild, the Executive Director of Consumers’ Research, stated that Tether is being used by Russia and other countries to evade sanctions. These allegations come on the heels of similar accusations following the October 7 attacks on Israel by Hamas, which led to the freezing of approximately 100 Binance accounts by the Israeli government and $800,000 worth of assets by Tether.
Billboard Campaign in Times Square
Consumers’ Research has taken its campaign public with a billboard in Times Square, New York, displaying the message “Tetheredtocorruption.” The campaign not only highlights allegations of Tether’s involvement in financing criminal activities and bypassing sanctions but also criticizes Tether’s refusal to undergo an audit to confirm its 1:1 backing of assets. The organization has likened Tether to the now-defunct FTX, suggesting potential corruption within the company.
Tether’s Response
In response to these allegations, Tether has reiterated that its assets are fully backed and emphasized its collaboration with law enforcement agencies. The company stated, “Notably, Tether has integrated the FBI and the U.S. Secret Service into its platform to enhance efforts against criminal activity involving stablecoins.”
Implications for the Crypto Industry
These renewed allegations against Tether come at a time when the broader cryptocurrency market is under intense scrutiny from regulators and the public. The accusations underscore ongoing concerns about the potential misuse of digital assets for illicit purposes, which authorities are striving to mitigate. The outcome of these allegations and Tether’s response will likely have significant implications for the stablecoin market and the wider cryptocurrency ecosystem.
