**U.S. investigating Tether over potential links to money laundering and sanctions violations**
U.S. investigators are reportedly examining Tether, the issuer of the world’s largest stablecoin USDT, for potential violations of anti-money laundering laws and sanctions regulations, according to *The Wall Street Journal*. The Manhattan U.S. Attorney’s Office is leading the criminal investigation, while the U.S. Treasury Department is considering sanctions against Tether due to the stablecoin’s possible use by sanctioned entities, including terrorist organizations and illicit actors in Russia.
The probe is focused on whether third parties are using Tether for illegal activities such as terrorism financing, drug trading, and hacking. If the Treasury were to impose sanctions, it could prevent U.S. individuals and businesses from transacting with Tether, potentially impacting its role in the crypto market.
Tether’s CEO Paolo Ardoino disputed *The Wall Street Journal*’s report on social media, labeling it as “old noise” and denying any knowledge of an ongoing investigation. A Tether spokesperson further criticized the article, calling it “pure rank speculation” and emphasizing Tether’s cooperation with law enforcement to combat misuse of its stablecoin.
Tether has faced scrutiny for years over the stability and backing of its USDT token, with past claims about it being fully dollar-backed challenged by the Commodity Futures Trading Commission (CFTC). U.S. lawmakers have also pushed for a deeper investigation into Tether’s possible role in illicit financial activities, despite the company’s claims of collaborating with global authorities to deter such misuse.
