Did Tether use illegal means to gain access to the global banking system?

rope coin. Source: Adobe

To maintain their access to the global banking system, the Singapore-based companies behind issuing the USDT stablecoin have allegedly used fake documents, hidden identities and shell companies, according to a new article from The Wall Street Journal.

The value of USDT is pegged to the US dollar and backed at a ratio of 1:1 in USD/cash equivalent. USDT is the largest stablecoin by market cap, with $71.124 billion worth of tokens currently in circulation.

Tether trading volumes are generally about the combined trading volumes of Bitcoin and Ethereum. According to CoinMarketCap, USDT saw $37.239 billion in trading volume in the last 24 hours, compared to $25.65 billion for bitcoin and $9.7 billion for ether.

Tether and its backers use unconventional means to maintain access to the banking system

According to the WSJ, Tether’s reliance on unconventional methods to maintain its access to the global banking system began in 2017, when Wells Fargo and Company It stopped processing transactions from several of the crypto company’s Taiwanese bank accounts. Tether then said in a lawsuit against the bank that he was an “existential threat to their business”.

Documents cited by The Wall Street Journal revealed that the companies behind Tether opened new accounts in Taiwan that were previously safe. Chris Leeframe from Hellab Technology Limitedalthough the accounts were opened under the name of Hellab Holdings Ltd. At the same time, a separate account was opened in Turkey in the name of Denise Royal Des Ticaretan account the US Department of Justice has since accused of using to launder money for a terrorist group.

Bitfinexa sister company of Tether, also transferred more than $1 billion to a now bankrupt Panama-based company called Crypto Capital Corp., which was known to set up front companies whose purpose was to open bank accounts for crypto businesses. Bitfinex claims today that it was the victim of a scam by Crypto Capital Corp, which resulted in the forfeiture of approximately $850 million of its assets on suspicion of bank fraud and money laundering.

The documents also reveal that Tether and its backers used similar schemes to extend access to the US banking system with signature bank from New York. In 2018, Signature had already closed two accounts associated with Tether and associated companies, and rejected an account application for Bitfinex.

Next, jet fuel broker Global AML I reached out to Signature Bank about opening an account, claiming to use it to trade cryptocurrency on the American stock exchange A legendary sea monster To hedge its exposure to global currencies. The documents related to this application to open an account do not mention this Christopher Harborneowner of AML Global, also owns about 12% of Tether and Bitfinex, but under a different name, Shukrit Sakonkrit.

Ĺ ukrit Sakunkrit has been blacklisted by Signature Bank on suspicion of evading anti-money laundering measures. The AML Global account was given a temporary hold, but was quickly closed after Signature Bank executives noticed that the account activity was related to Bitfinex, not Kraken, as AML Global had claimed.

Decline in the cryptocurrency markets

Major cryptocurrency prices fell after this article was published, which will give Tether critics additional arguments to create more confusion. Some argue that USDT is not backed 1:1 by USD or its equivalent, as Tether claims. Bitcoin was trading at the end of the day around $22,300, down about 4.8% in the past 24 hours, while Ethereum was trading around $1,560, down about 5% in the past 24 hours. Over the past 24 hours. The major cryptocurrencies in the market are down about 1% after the article was published.

If Tether will suffer from bank run on a large scale, as in FTXThis could prove disastrous, at least in the short term, for the cryptocurrency industry, and thus the market plunged in the wake of the article’s publication. USDT is a major source of incoming liquidity in the crypto space.

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