Circle Accuses Rival Tether of Illicit Activities, Calls for Treasury Probe

Circle, the issuer of the second-largest stablecoin, has urged the U.S. Treasury Department to investigate its competitor, Tether.

Treasury’s Authority Questioned

Circle’s senior director, Caroline Hill, testified before Congress that Tether’s connection to the U.S. financial system through Cantor Fitzgerald gives the Treasury authority to take action.

Tether’s Reputation and Alleged Malign Activities

Hill cited Tether’s reputation and allegations that it contributes to terrorist financing and other illegal activities as reasons for the probe.

Dollar-Pegged Stablecoins and U.S. Values

Hill argued that dollar-pegged stablecoins should align with U.S. values, including democratic principles. She suggested that the Treasury may need additional authority to enforce this.

UN Report on Tether’s Use in Crime

A United Nations report claimed that criminals in East and Southeast Asia prefer to use Tether’s USDT due to its stability and anonymity. The report cited examples of USDT being used in illegal gambling and romance scams.

Tether’s Response

Tether has denied the UNODC’s claims, emphasizing its collaboration with law enforcement and the traceability of USDT transactions.