Department of Justice Seizes Stablecoin Tether’s Bank Accounts

Ask any crypto bro for the digital equivalent of the gold-standard, and they’ll likely tell you about Tether — though a recent raid by the Department of Justice is throwing that characterization into question.

Fresh reporting by the Financial Times revealed that the US Department of Justice has seized millions of dollars from a collection of bank accounts and crypto wallets linked to the finance tech company Tether Limited.

The company is famously the issuer of the “stablecoin” Tether, a digital currency meant to maintain a relatively stable value based on the exchange rate of the US dollar. The company Tether was one of the subjects of a massive FBI probe, which discovered an unlicensed payment processing business, Capstone, that is now alleged to have placed hundreds of millions of dollars worth of illegal transfers.

The convoluted case also involves Bitfinex, a cryptocurrency exchange owned by Tether’s parent company, iFinex.

Basically, the payment processor Capstone is alleged to have misrepresented itself as an information technology firm in dealings with legitimate banks like Wells Fargo and JPMorgan Chase. In reality, according to the allegations, the company was engaged in a massive fraud scheme, in which people affiliated with Capstone misrepresented themselves as FBI agents in order to scam the elderly, whose money was then converted into crypto, Reuters reported.