The WSJ has repeatedly released revelations against Tether, which were refuted by the issuer of the most popular stable coin. Let's figure out what happened this time.
On March 3, Wall Street Journal journalists published an exposé, in which the newspaper gained access to electronic letters and documents related to Tether's activities for 2018. According to the article, Tether was experiencing difficulties with access to the global banking system, therefore:
- Tether turned to shadow intermediaries;
- Tether falsified documents;
- Tether used shell companies.
The journalists stressed that access to the banking system was especially important for Tether, because the company's own stablecoin is pegged to the US dollar.
According to these emails analyzed by WSJ, Tether had a major Chinese trader as a partner who used fake documents (invoices and contracts) to deceive the banking system. The article says that Stephen Moore, one of the owners of Tether Holdings Ltd, was cautious about the Chinese financial intermediary.
“Mr. Moore said it was too risky to continue using the fake sales invoices and contracts, which he had signed, and recommended they abandon the efforts to open the accounts, the emails show. ‘I would not want to argue any of the above in a potential fraud/money laundering case,’ he wrote.” - it is written in the article.
Another key statement from journalists was that Tether and Bitfinex not only used different ways to circumvent control, but were also seen to be affiliated with a firm that was engaged in money laundering for a terrorist organization.
“Another account on a list of several created for use by Tether and Bitfinex was opened in Turkey in the name of a company called Deniz Royal Dis Ticaret Limited Sirketi, according to one of the documents. That account was allegedly used to launder money raised by Hamas’s armed Izz ad-Din al-Qassam Brigades, according to an affidavit filed by the Justice Department. The al-Qassam Brigades is designated a terrorist organization by the U.S. government.” - writes WSJ.
Referring to an anonymous insider who is close to Tether, the journalists also reported that the Justice Department and the US Attorney's Office, for the Southern District of New York, are investigating Tether. However, the reasons for the investigation is unknown.
The damming revelations were followed by a response from Tether. First, a message appeared on the official website of the company stating that the article mislead readers, and that the activities of Bitfinex and Tether adhere to world-class standards.
“The Wall Street Journal’s report about stale allegations from long ago is wholly inaccurate and misleading. Bitfinex and Tether have world-class compliance programs and adhere to applicable Anti-Money Laundering, Know Your Customer, and Counter-Terrorist Financing legal requirements.” - stated in Tether.
Tether also stressed that they are actively working together with law enforcement agencies and the Ministry of Justice to prevent money laundering and terrorism.
The chief technical director of Tether, Paolo Ardoino,criticized the WSJ article by pouring scorn on the journalists. On Twitter, he again compared journalists to clowns and accused them of disinformation.
The WSJ article made a lot of noise last time, but it seems to have embolden Tether even more. Last time, journalists wrote about the secured loans of the company, after which Tether announced that they would reduce them to zero in a year.
This is not the first time we have seen an attack on the reputation of Tether by the press. The company has already successfully repelled the reputational blow from Bloomberg articles, and it seems ready to actively expose journalists and fight disinformation. We will continue our observations of Tether's activities and the company's interaction with the media and inform you about the news!