Tether Limited controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2026
Tether freezes assets linked to potential Binance hack
Company response
Tether announced that it had frozen approximately $1.6 billion in assets linked to a potential hack of the Binance exchange. The announcement described the frozen funds as connected to the possible compromise of Binance, without providing further details in the available statement. The action was attributed to Tether, the company behind the stablecoin of the same name, and was reported in connection with the suspected cyberattack on the exchange. No additional information on the incident, the parties involved, or subsequent developments was included in the source material.
Company response
Remediation — Tether
Tether CEO Paolo Ardoino announced that his company had frozen approximately $1.6 billion "linked to a potential hack of the Binance exchange."
Source excerpt
Tether CEO Paolo Ardoino announced that his company had frozen approximately $1.6 billion "linked to a potential hack of the Binance exchange."
2023
Allegations concerning illicit use of USDT
A Wall Street Journal report alleged that USDT had been used by criminal organizations and suggested possible United States Justice Department scrutiny. Tether rejected the report’s claims and characterized them as speculative.
2021
CFTC reserve-statements enforcement action
The CFTC found that Tether’s prior representations about fiat reserves were misleading for portions of 2016 through 2018 and imposed a civil monetary penalty.
2021
Tether agrees to $41 million settlement with CFTC
Settlement
Tether agreed to pay $41 million to settle CFTC allegations that it misled customers and the cryptocurrency market about whether its tokens were fully backed by fiat currencies. Tether did not admit or deny the allegations.
Source excerpt
Tether didn’t admit or deny the CFTC’s allegations.
Tether will pay $41 million to settle allegations it lied in claiming its digital tokens were fully backed by fiat currencies
2021
Tether faces allegations over investments and crypto-backed loans
Issue disclosure
A Bloomberg BusinessWeek report alleged that Tether used reserves for investments, lent billions of dollars to Chinese companies, and offered billions of dollars in crypto-backed loans. Tether disputed the allegations, calling them baseless.
Company response
Denial — Tether
Tether has responded to the Bloomberg story calling these allegations baseless.
Source excerpt
Tether has responded to the Bloomberg story calling these allegations baseless.
The Bloomberg journalist mentions that Tether has also been offering billions of dollars in crypto-backed loans.
Bloomberg journalist Zeke Faux, however, alleged that Tether and its CFO Giancarlo Devasini has used the company’s reserves to make investments.
2021
Bitfinex and Tether settle with New York Attorney General
Settlement
Bitfinex and Tether settled a case with the New York Attorney General’s office, agreed to pay an $18.5 million fine, and were barred from trading with New York residents. The Attorney General accused the companies of concealing losses and making false statements about Tether’s backing; the article reports that the settlement required disclosures from Tether.
Company response
Denial — Tether
Tether published a statement on Tuesday “admitting to no wrongdoing.” It argued:
Source excerpt
The settlement agreement reached with iFinex Inc., BFXNA Inc., and BFXWW Inc. (collectively, Bitfinex), and Tether Holdings Limited, Tether Operations Limited, Tether Limited, and Tether International Limited (collectively, Tether) resolved the complaint lodged against them for falsely claiming that their virtual currency was fully backed by U.S. dollars.
Yesterday’s agreement requires Bitfinex and Tether to discontinue trading activity with New Yorkers and pay the state $18.5 million.
Bitfinex and Tether have been banned from operating in New York and must pay a fine of $18.5 million as part of a settlement with the New York Attorney General’s (NYAG’s) office over a case dating back to 2019.
2019
New York Attorney General investigation
The New York Attorney General alleged that Bitfinex used funds associated with Tether to address an $850 million shortfall. The companies disputed the allegations and later settled the matter in 2021 without admitting wrongdoing.
2018
Uncompleted audit and reserve-transparency controversy
Tether ended its relationship with Friedman LLP before a full audit was completed. The development became a major source of criticism because Tether had publicly emphasized the backing of USDT while independent verification remained incomplete.