A new Wall Street Journal report alleges that Tie accessed global bank accounts through cryptographic firms using fraudulent documents and shell companies.
Investigations by the Wall Street Journal revealed that Tether accessed the banking system by opening accounts under different corporate names whose executives had slightly different names than established executives.
Turkish Tether account had terrorist links
According to documents reviewed by the Wall Street Journal, the Taiwanese accounts were opened under the name of a company called Hylab technology.
An account was opened in Turkey in the name of a company called Denix Royal Dis Ticaret Limited Sirketi. Following a crackdown in 2020, the US Department of Justice alleged that a terrorist group used the account to launder funds. According to the Justice Department, the group transacted $80 million into the account as part of an effort to convert crypto donations into cash. The terrorists also allegedly used an account on the Bitfinex cryptocurrency exchange, Tether's sister company.
Another company, Crypto Capital, opened accounts for crypto companies, including Bitfinex and Tether, in the names of various shell companies. These accounts became money transfer businesses for crypto companies, but US authorities later seized their assets.
New York-based Signature Bank closed an account in the name of Christopher Harborne, co-owner of Tether, after realizing the account was related to Bitfinex.
According to Tether, the accusations by the Wall Street Journal were "totally inaccurate and misleading." On the other hand, crypto critic Molly White said that the WSJ could not have invented "these things."
Tether previously clashed with the publication over allegations the Journal made that Tether's 3-month Treasury bill support is USDT stablecoins they were unsafe assets. Tether recently remote the commercial paper of the support USDT.
BUSD Market Cap Dips Below $10 Billion
Stablecoin users flocked to Tether after the New York State Department of Financial Services ordered Paxos, the issuer of BUSD, a Tether rival, to stop minting the coin and end its relation to the eponymous currency exchange Binance.
In mid-February, the concentration USDT's share in Curve's busdv2 pool fell to 4%, while BUSD's share increased to 69%. At press time, the BUSD concentration had risen to 77%, while the USDT share rose to 7%.
Following the NYSFSD ban, Paxos redeemed $6.7 billion of BUSD, while the BUSD market capitalization fell below $10 billion on March 3, 2023, for the first time since June 2021. Paxos promised to back the currency up to except February 2024.
Kaiko data revealed that market depth within the 2% of BUSD-USDT and BUSD-DAI trading pairs fell from $200 million before the NYSFSD crackdown to $123 million at press time.
Market depth is a measure of open buy and sell orders around a certain price region, in this case, the market price.
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