A report from the Wall Street Journal (WSJ) reveals that crypto companies behind Tether used forged documents. They also reportedly used front companies to obtain bank accounts. Indeed, Tether Holdings and associated crypto brokers have impersonated identities.
Why would Tether need to cheat to access banks?
Since its launch in 2014, Tether has been embroiled in a bad legal controversy. Recall that the company manages the USDT, a stablecoin worth more than 70 billion dollars. In fact, in 2018, the company was banned from operating in New York State. The attorney general’s office in that state accuses him of granting loans to investors and offering unregistered securities.
Indeed, this ban and several others have prevented Tether and its sister company Bitfinex from accessing banking services. We have now learned from bitcoinist that the two companies allegedly falsified documents to deceive the banks. In addition, they allegedly usurped the identity of several companies and individuals.
Practices unworthy of a large company
The Wall Street Journal has got hold of emails that tend to prove their accusations. Indeed, one of these emails is from Stephen Moore, one of the owners of Tether Holdings Ltd. It is aimed at an intermediary that Tether would have used to “circumvent the banking system by providing fake invoices and contracts for every deposit and withdrawal“. The intermediary in question is believed to be a high-profile trader based in China.
In these emails, Mr. Moore believes it was too risky to continue using the fake invoices and sales contracts he had signed. Thus, he recommends abandoning efforts to open the accounts. It reads: ” I would not like to discuss the above in a potential case of fraud / money laundering “.
These accusations will not help matters for USDT. Already in 2018, it was discovered that Tether covered only 27.6% of all USDT in circulation. However, the company has the obligation to cover 100% of it since this stablecoin is pegged to the dollar. This is in addition to the fact that the SEC wants to do away with stablecoins. So, could we expect a disappearance of the USDT?
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