Companies backing Tether, the world’s largest Stablecoin, used fake documents and shell companies to help its parent company access the banking system, the Wall Street Journal reported on March 3, 2023.
Decrypt reported that emails and documents cited in the WSJ report suggests that USDT, the most-traded cryptocurrency, went to extraordinary lengths to open bank accounts and stay connected to the traditional financial system.
One major Chinese trader, according to the WSJ, tried to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal”.
Stephen Moore, one of the owners of Tether Holdings Ltd confirmed this accusation and then decided to drop the backer, claiming it was “too risky,” according to the WSJ.
The WSJ said it also saw documents showing Tether had used problematic third parties with “hundreds of millions of dollars of seized assets and connections to a designated terrorist organisation”. It added that the US Department of Justice is currently investigating Tether.
Tether responded to the WSJ report calling it “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,” Tether said.
Tether mints USDT, the third-largest cryptocurrency after Bitcoin and Ethereum, with a market capitalisation of $71 billion.
Crypto Market Cap Hit Heavily By Silvergate Bank crisis
While cryptocurrency markets enjoyed relatively calm conditions in February, the fear of regulatory pressure appears to be affecting volatility in March.
On March 2, Silvergate Bank, a major player in the crypto on- and off-ramping, saw its stock plunge by 57.7 per cent at the New York Stock Exchange (NYSE), rupturing the ascending channel of crypto markets initiated in mid-January.
Silvergate reported “additional losses” and suboptimal capitalisation, potentially triggering a bank run.
Many of the world’s largest cryptocurrency exchanges, institutional investors, and mining companies use Silvergate’s financial infrastructure services. To reduce exposure to the crypto sector, clients sought alternative solutions or sold their positions.
Despite the 4 per cent decline in total market capitalization, Silvergate Bank’s uncertainty does not appear to have roots deep enough to pose a systemic risk, Cointelegraph said.
Bitcoin NFT Market To Hit $4.5 Billion by 2025: Report
An emerging Bitcoin NFT ecosystem—practically non-existent just months ago—could grow to $4.5 billion by 2025.
Analysts at Galaxy Research expect that the Bitcoin Ordinal frenzy of the last two months is no blip. According to them, the demand for storing NFTs on the world’s oldest and most established Blockchain will only increase. They anticipate that by the summer of 2023, an entire infrastructure of products and services will be in place to cater to this growing market.
“In just two months, wallets have already begun to offer the necessary support to improve user experience and marketplaces are already emerging,” Decrypt quoted the report.
