A dispute has emerged between the Wall Street Journal and Tether, the world's largest stablecoin issuer, over claims of a federal investigation. The controversy triggered immediate market reaction, with Bitcoin dropping from $68,600 to $66,589.
According to the Wall Street Journal's Friday report, prosecutors at the Manhattan U.S. attorney's office are investigating potential violations of anti-money laundering rules and sanctions by Tether. The investigation reportedly focuses on third-party use of USDT cryptocurrency to circumvent legal restrictions.
Tether CEO Paolo Ardoino swiftly contested the report's accuracy. "As we told to WSJ there is no indication that Tether is under investigation," Ardoino stated on Twitter. "WSJ is regurgitating old noise. Full stop."
The controversy adds to ongoing scrutiny of Tether's $100 billion operation. Questions about the company's reserves have persisted throughout its history. However, Cantor Fitzgerald CEO Howard Lutnick has recently confirmed his firm's oversight of US Treasury bills backing Tether's tokens.
The stablecoin issuer has maintained its dollar peg and met all redemption requests since its inception. This stability record stands in contrast to persistent skepticism about its operations and reserves.
Regulatory attention has intensified following recent accusations from industry competitors. During a Congressional hearing in February, a Circle representative expressed concerns about Tether's potential role in facilitating illicit activities. "I hope that they're looking at this seriously given Tether's reputation, as well as the data that we've seen that they're contributing to terrorist financing and other malign activities," the representative stated.
The controversy highlights growing tensions between traditional financial media and cryptocurrency companies. It also underscores increasing regulatory scrutiny of stablecoin issuers in the United States.
Market observers note that Tether's significance to cryptocurrency markets makes any regulatory uncertainty particularly impactful. The stablecoin's $100 billion market presence means regulatory developments can trigger immediate market reactions, as evidenced by Bitcoin's price movement following the WSJ report.
The dispute emerges amid broader regulatory focus on cryptocurrency companies' compliance with anti-money laundering regulations. Stablecoin issuers face particular attention due to their critical role in cryptocurrency market infrastructure.