Tether CEO Paolo Ardoino has denied allegations that the company is facing an investigation by the U.S government.

This comes in response to a Wall Street Journal report on an alleged probe by U.S. authorities into Tether’s involvement in sanction violations and anti-money laundering (AML) breaches. The investigation was said to be led by the U.S. Attorney’s Office in Manhattan.

According to unnamed sources cited by the WSJ, it is focusing on whether Tether has been used in illegal activities like drug trafficking, terrorism, and hacking. “There is no indication that Tether is under investigation,” Ardoino said on X (formerly Twitter).

Market reaction

The WSJ report claimed that Tether is on the radar of U.S. federal investigators, who are assessing if the stablecoin is facilitating unlawful transactions. The Treasury Department reportedly weighed sanctions against Tether, citing its use among sanctioned individuals and groups.

Federal scrutiny over the cryptocurrency industry isn’t new, but Tether’s prominence in global transactions gives it a unique level of attention. Tether hit back with a statement dismissing the allegations.

“It is wildly irresponsible for WSJ to write articles with reckless allegations with such certainty when no authorities have gone on the record to confirm these rumors, and no sources are named,” the company said.

According to Tether, the accusations are based on “rank speculation,” and it insists there’s been no official confirmation of any investigation. Tether also pointed out its extensive history of working with law enforcement to target bad actors misusing its platform.

Following the WSJ’s report, crypto prices dropped. Bitcoin, which had been trending near $69,000, slid to $66,500, which was a nearly 2% dip within hours of the news breaking. Ethereum saw a 2.9% decrease to $2,391, though buying activity in the derivatives market remains strong.

The US presidential, happening in exactly ten days, is widely expected to be a big catalyst for markets. Analysts expect Bitcoin to make a new all-time high.

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