DOJ Investigating Tether for AML Violations, CEO Denies Claims

• DOJ is reportedly investigating Tether over anti-money laundering (AML) violations.
• Tether CEO Paolo Ardoino disputes these claims, asserting no ongoing investigation.
• Institutional interest in Bitcoin grows, with Emory University disclosing Bitcoin ETF holdings

The U.S. Department of Justice (DOJ) is reportedly investigating Tether, the largest stablecoin issuer, over potential anti-money laundering (AML) and sanctions compliance violations. However, Tether’s CEO, Paolo Ardoino, denies these allegations, calling them “unequivocally false” and asserting that Tether is not under investigation.

Tether CEO Refutes Allegations

Ardoino called the claims in The Wall Street Journal report “regurgitated noises.” He emphasized Tether’s close collaboration with law enforcement to prevent the misuse of its stablecoin, USDT. Ardoino further stated that if such a probe were indeed underway, Tether would be informed, suggesting that the allegations lack foundation.

Tony Edward, host of the Thinking Crypto podcast, has expressed his views on the development. He stated that in its early days, Tether lacked proper reserves and transparency, noting that multiple co-founders he interviewed have admitted to these shortcomings. However, he highlighted that Tether now conducts quarterly audits.

Edward suggests that Tether’s ongoing scrutiny may stem from market competition, as rival companies might seek to capitalize on any perceived weaknesses. He believes that Tether will need to fully comply with KYC and AML regulations to mitigate the risks of being targeted by regulatory bodies, similar to the recent issues faced by Binance. 

Institutional Investment in Bitcoin Increases

Meanwhile, institutional interest in cryptocurrency remains strong. On Friday, Matthew Sigel, head of digital assets research at VanEck, disclosed that Emory University became the first higher-education institution in the U.S. to publicly disclose its Bitcoin holdings through an exchange-traded fund (ETF).

Emory reported approximately $15 million invested in Grayscale’s Bitcoin Trust as of September 30.

Likewise, Morgan Stanley’s asset management division, which manages $1.3 trillion, reported a $272 million investment in U.S. Bitcoin ETFs for the second consecutive quarter. The firm holds 5.5 million shares in BlackRock’s iShares Bitcoin Trust (IBIT), valued at $209 million. This is a 10.2% increase from its initial purchase of $187.7 million in Q2.

Additionally, Morgan Stanley also reduced its exposure to Grayscale’s GBTC, cutting holdings from $270 million to $148,000.