Key Takeaways
- The report claims that Crypto Capital Corp., a “shadow bank” held Tether funds before being shut down by authorities in 2018.
- The report alleges that Tether used controversial third parties that used hundreds of millions of dollars of seized assets and had connections to a designated terrorist organization.
- Tether has rubbished the report as “wholly inaccurate and misleading.”
Stablecoin issuer Tether has always been a subject of controversies and allegations. The latest controversy surrounding Tether stems from a Wall Street Journal Report, which claims that the firm used false documents and shell companies to help gain access to the banking system.
The report claims that Crypto Capital Corp., a “shadow bank,” held Tether funds before being shut down by authorities in 2018. WSJ report further goes on to allege that the stablecoin issuer and its sister company Bitfinex opened at least nine new bank accounts for shell companies in Asia in October 2018.
The report claims that Tether also used controversial third parties that used “hundreds of millions of dollars of seized assets and connections to a designated terrorist organization.” Among the various emails WSJ accessed, one was by Stephen Moore, who is one of the owners of Tether Holdings.
The email stated that a USDT trader in China was trying to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal.” Reportedly, Moore had then commented they should stop trying to open accounts as it became too risky to continue using phony sales invoices and contracts that he had signed.
“I would not want to argue any of the above in a potential fraud/money laundering case.”Moore was quoted as saying, according to the report. The report also mentions a past call recording with former Tether executive Phil Potter posted to YouTube in 2017 by Bitfinexed.
“We’ve had banking hiccups in the past; we have just – we have always been able to route around it or deal with it, open up new accounts or what have you,” he said on the call. “There is been lots of sort of cat-and-mouse tricks that everyone in the bitcoin industry has to avail themselves of.”
Responding to the allegation in the report, Paolo Ardoino, the chief technology officer of Tether, claims that the report had a “ton of misinformation and inaccuracies,.”
Tether has rubbished the report as “wholly inaccurate and misleading.” “Bitfinex and Tether have world-class compliance programs and adhere to applicable Anti-Money Laundering(AML), Know Your Customer(KYC), and Counter-Terrorist Financing legal requirements,” the company’s official statement reads.
