Tether, the company behind the world's largest stablecoin, reportedly used false documents and intermediaries to access bank accounts, according to a report from The Wall Street Journal. The report said that Tether used bank accounts in the names of executives of various companies, with the names slightly tweaked, in an effort to maintain access to the global financial system in 2018.

Paolo Ardoino, the chief technology officer of Tether, tweeted on Friday afternoon that the WSJ report contained a "ton of misinformation and inaccuracies," without giving specifics. In an email seen by the Journal, Tether Holdings co-owner Stephen Moore pushed back against the use of fake sales invoices.

The Wall Street Journal reported that Tether and Bitfinex were able to open at least nine new bank accounts for shell companies in Asia in October 2018. The report also referenced the recording of a call with former Tether executive Phil Potter that was posted to YouTube in 2017 by Bitfinexed, where Potter said, “We've had banking hiccups in the past, we've just — we've always been able to route around it or deal with it, open up new accounts or what have you.”

Crypto companies have traditionally had difficulties securing banking access. Tether in particular has had a number of bank accounts over the past few years, with some banks shutting down the stablecoin issuer's accounts. This report came a day after crypto-friendly bank Silvergate came under intense scrutiny for announcing it had to restate financials and would not meet a deadline to file its annual report.

Major clients have suspended their ties with Silvergate and its stock price cratered. In recent months, federal regulators have been warning banks that their relationships with crypto may invite risk.

Key Points

  • Tether used false documents and intermediaries to access bank accounts.
  • Tether used bank accounts in the names of executives of various companies with names slightly tweaked.
  • Tether and Bitfinex were able to open at least nine new bank accounts for shell companies in Asia in October 2018.
  • Crypto companies have traditionally had difficulties securing banking access.
  • Federal regulators have been warning banks that their relationships with crypto may invite risk.

tl;dr

Tether, the company behind the world's largest stablecoin, used falsified documents and intermediaries to access bank accounts, according to a Wall Street Journal report. Crypto companies have traditionally had difficulties securing banking access and federal regulators have been warning banks that their relationships with crypto may invite risk.