Cryptocurrencies fell after reports of an investigation into possible violations using Tether

The cryptocurrency market began to feel feverish after the Wall Street Journal reported that the United States had launched an investigation into the activities of Tether Holdings Ltd., the issuer of the Tether stablecoin, regarding possible violations of sanctions and anti-money laundering rules.

Image source: Tether

In particular, the USDT Tether token, whose rate is pegged to the dollar with a stated ratio of one to one, fell to approximately 99.81 cents, Bitcoin fell by 3.3% to $65,878, Solana – by 5.5%, Dogecoin – by 5 .6%.

«A criminal investigation by the Manhattan U.S. Attorney’s Office is examining whether cryptocurrency was used by third parties to finance illegal activities such as drug trafficking, terrorism and hacking,” the Wall Street Journal reported.

Stablecoins play an important role in the cryptocurrency market as they are used as an intermediate step when purchasing tokens such as Bitcoin with fiat money and vice versa. Stablecoins are also often used as collateral when issuing crypto loans.

«Today’s selloff appears to be driven in part by the news, as prices appeared to fall when the news was announced,” said Will Tamplin, senior analyst at Fairlead Strategies.

USDT Tether has a market capitalization of approximately $120 billion and is the most traded cryptocurrency in the world. However, according to experts, the token lacks transparency.

In turn, Tether categorically denies the fact of an investigation. Tether CEO Paolo Ardoino called the publication of the newspaper “old noise” on social network X. “These stories are based on pure speculation, despite the fact that Tether has confirmed that it is not aware of any such investigations into the company. The article also carelessly glosses over Tether’s well-documented agreements with law enforcement to stop bad actors attempting to misuse Tether and other cryptocurrencies,” a Tether spokesperson said in a statement.