The Wall Street Journal rehashes old accusations against Tether of "illegally obtaining bank accounts," official response: "Misleading and untrue"

The Wall Street Journal (WSJ) recently reported on negative rumors surrounding Tether, the issuer of USDT, from 2017 to 2018, alleging that Tether was involved in obtaining bank accounts through falsified documents and shell companies. Tether responded with a public statement denying the allegations.

WSJ: Using Fake Documents and Shell Companies to Deal with Banks

The relationship between stablecoins and banks has drawn particular attention in light of the recent incident involving the stablecoin issuer and reserve bank Silvergate. The Wall Street Journal (WSJ) has recently brought up past events, alleging illicit activities by Tether.

According to WSJ, they obtained emails from Stephen Moore, a co-owner of Tether, showing that the main trading partners of Tether in China had attempted to deceive the banking system for deposits and withdrawals using fake commercial invoices and contracts. However, Stephen Moore advised against continuing this high-risk practice.

WSJ stated that these companies often hide their identities behind other enterprises and individuals in order to link with the financial system, but this can occasionally raise issues related to anti-money laundering and counter-terrorism financing.

Revisiting the Wells Fargo Incident and Terrorist Financing Accounts

WSJ revisited the 2017 incident where Wells Fargo Bank ceased dealings with Tether's Taiwan bank accounts. The report indicates that Tether opened bank accounts by hiring executives from well-known companies and changing company names. These accounts were managed by Chrise Lee, a senior executive at Hylab Technology Ltd., a company that manufactures set-top boxes.

An account opened under the name of Turkish company Deniz Royal Dis Ticaret Limited Sirketi was linked to terrorist activities.

Another Panama-based payment processor, Crypto Capital Corp., transferred over $1 billion on Bitfinex, using shell companies to open bank accounts and conduct unauthorized cryptocurrency payment operations. Ultimately, facing a criminal investigation in the United States, $850 million was frozen, with Bitfinex claiming to be defrauded by Crypto Capital and needing to borrow from Tether to cover the fund shortfall.

WSJ believes that these are examples of Tether using shell companies to open bank accounts, having opened at least nine bank accounts in 2018 through such means, coinciding with Bitfinex announcing a new "distributed banking solution" that month.

Attempt to Access U.S. Bank Signature

WSJ reported that Christopher Harborne, a British businessman previously revealed as a major shareholder of Bitfinex, attempted to open an account at the U.S. bank Signature under his company AML Global, stating the reason for account opening was to transact with the U.S. compliant exchange Kraken. However, compliance personnel at the bank discovered that the funds largely came from Bitfinex and quickly rejected the transaction. WSJ stated that Harborne did not respond to this news.

Tether: WSJ Uses False Old News to Sensationalize

In response to this report, Tether stated that The Wall Street Journal's coverage based on old accusations is completely inaccurate and misleading. Bitfinex and Tether have compliance programs in place and adhere to anti-money laundering, KYC, and counter-terrorism financing requirements.

The shadows of past events reveal that most early cryptocurrency businesses may have operated in the gray areas of unclear regulations; however, the media jumping to dig up old accounts at this time also raises unclear motives. The tug-of-war among different businesses, media, and regulators is not something that outsiders can easily discern in the short term.