Tether Execs Face Criminal Probe Into Bank Fraud: Report
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Update. Tether said in an official statement that Bloomberg's article patently "designed to generate clicks." The company also added that it will not change its determination to "remain leaders in the community."

The US Department of Justice has initiated a probe against Tether executives over possible bank fraud, Bloomberg reports, citing sources, familiar with the matter.

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The watchdog reportedly wants to find out whether executives behind the company that issues popular stablecoin committed bank fraud by hiding cryptocurrency-related transactions from financial institutions. One of the sources added that the regulator had already sent letters to individuals to inform that they are under investigation.

Tether's Bank Reveals it Invests Customer Funds in Bitcoin

In February this year, iFinex Inc., a parent company of Bitfinex, and Tether agreed to pay $18.5 million in penalties as the both companies made false statements about the backing of the USDT stablecoin, and about the movement of funds dollars between the two companies to cover up the truth about massive losses by Bitfinex.

New York Attorney General found that Tether's claims that its stablecoin was fully backed by US dollars at all times "was a lie." As part of the settlement, Tether agreed to publish updates on USDT's reserves on a quarter basis. The NYAG also required Bitfinex and Tether to end all trading activity with New Yorkers.

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