tether controversy Archives

Binance And Tether Face Calls For Criminal Charges

In a joint letter signed by Senator Lummis and Representative French Hill, the lawmakers express deep concern over reports indicating that “unregulated crypto intermediaries” outside the United States have allegedly facilitated illicit financial activities, including financing terrorism, such as Hamas’s attacks on Israel.

Lummis and Hill urged the DOJ to promptly reach a charging decision regarding Binance, considering the extent of its involvement, and to conclude the ongoing investigation into Tether’s alleged illicit activities.

The lawmakers refer to the WSJ report of October 10, 2023, which disclosed that Hamas, Palestinian Islamic Jihad, and Hezbollah had received cryptocurrency funding since August 2021. They stress the DOJ’s need to hold any entities facilitating illicit activities accountable. The letter further reads:

We believe that it’s imperative that the Department of Justice hold bad actors accountable if they are shown to facilitate illicit activity. Binance, notably, is an unregulated crypto asset exchange based in the Seychelles and Cayman Islands. Binance has historically been linked to illicit activity and is purportedly the subject of a current Department of Justice investigation.

On the other hand, Tether faced a fine by the Commodity Futures Trading Commission (CFTC) in 2021 for issues related to backing its stablecoin USDT.

The lawmakers urged the DOJ to thoroughly assess whether Binance and Tether have provided material support and resources for terrorism by violating applicable sanctions laws and the Bank Secrecy Act. Lummis and Hill emphasize the importance of swift action to cut off funding sources for terrorists targeting Israel.

Tether Counters Allegations

In response to Senator Lummis and Rep. Hill’s claims, Tether issued a statement addressing the “misinformation” surrounding the potential misuse of cryptocurrencies.

Tether references independent investigations by Chainalysis and Elliptic, which found significant errors and faulty attribution techniques in reports, including the WSJ’s article.

Tether emphasizes its commitment to regulatory compliance, due diligence, and global collaboration with law enforcement agencies. They highlight their track record of freezing assets tied to illicit activities and assert no evidence of sanctions law or Bank Secrecy Act violations.

Tether further notes the inherent transparency of blockchain technology and the proactive measures taken by virtual asset service providers to monitor and report potentially illicit activities.

They reaffirm their dedication to transparency, compliance, and collaboration with authorities, inviting constructive dialogue and cooperation.

As the call for a DOJ investigation unfolds, the cryptocurrency community awaits further developments and the potential impact on Binance and Tether’s operations.

As of this writing, BNB is trading at $221, representing a decrease of 0.9% within the last 24 hours. However, it is worth noting that the token has experienced significant gains over the past seven and thirty days, amounting to 5.3% and 4.9%, respectively.

Featured image from Shutterstock, chart from TradingView.com

The company behind the increasingly popular USDC stablecoin dreams big. Circle wants to leverage its know-how and good reputation to become “a global digital currency bank.” That means it’s also looking into becoming a digital currency bank in the US. Their plan’s announcement focused on that region of the planet, but the wording makes it clear that they’re ultimately looking for worldwide domination.

Related Reading | Is USDC’s Billion Dollar Growth A Sign Crypto Smart Money Is Ditching Tether?

According to Coindesk, “this would be an industry first, with a scope far beyond the OCC banking charter already conditionally issued to Anchorage, Paxos and other crypto-native financial services firms.” The company’s aim is to provide “frictionless, instant and nearly free payments that combined fiat reserve currencies with open, permissionless blockchains, and eventually building on these open networks to support new forms of capital formation and intermediation.”

It’s the project ready for prime time or in its infancy? Did they file the documents already? Will they be able to pull this off? Keep reading for extra clues and info.

USDC price chart for 08/10/2021 on Bitbay | Source: USDC/USD on TradingView.com
Circle Played Nice With Governments From The Get-Go

The USDC stablecoin is issued by CENTRE, a joint venture between Circle and Coinbase. Their aim is “to conform with stringent U.S. money transmission supervisory and regulatory standards.” In contrast Tether, their main competition, is famous for the probe that the US Department Of Justice launched against them.

The main point of contention against Tether is the reserves they hold to back up their USDT. Attacking their competition’s weak spot, Circle claims, “Establishing national regulatory standards for dollar digital currencies is crucial to enabling the potential of digital currencies in the real economy, including standards for reserve management and composition.”

Since regulatory compliance is their forte, Circle spends half of their announcement praising their own transparency and USDC’s liquidity even “in times of intense demand to redeem USDC”. To prove that, they provide an independent accountant report that highlights the “composition of USDC reserves, including the credit quality of the underlying assets.”

Related Reading | Tether (USDT) To Face Do or Die Situation in 2021: Messari Report

Why does all of that have to do with their plans to become a national digital currency bank? It proves that they’re in tune with the US Government.

Now, with USDC at more than $27.5 billion in circulation, and building on our long-standing commitment to trust, transparency and accountability in the dollar-denominated reserves backing USDC, we are setting out to become a U.S. Federally-chartered national commercial bank.
Circle intends to become a full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, U.S. Treasury, OCC, and the FDIC.

Other Big Plans For The Crypto Company

Recently, Circle announced its intention to go public before the end of the year. According to Coindesk, the company “partnered with a special purpose acquisition company (SPAC) to go public later this year. The deal valued Circle at $4.5 billion.” Also, their USDC project will soon go live in multiple blockchains. As NewsBTC informed:

It will soon be available in, “Avalanche, Celo, Flow, Hedera, Kava, Nervos, Polkadot, Stacks, Tezos, and Tron.” That will bring the total to 14; since USDC is already functional in Ethereum, Algorand, Stellar, and Solana.

In related news, NewsBTC recently highlighted a Messari report that shows USDC is the most used stablecoin in DeFi.

From what Ryan Watkins, a credible researcher, predicted, the stablecoin share for Tether on Ethereum could dip below 50%. In addition, Watkins revealed that more than half of USDC’s total supply is now in smart contracts.

The equivalent value for this USD Coin supply is about $12.5 billion. According to Messari, CoinMetrics data estimates show that USDC’s stablecoin supply is over 40% on Ethereum.

However, none of that guarantees that their plans to become a global digital currency bank will come true. Keep the NewsBTC tab open for further information on this developing story.

Featured Image by Chaitanya Tvs on Unsplash – Charts by TradingView