Tether Sold Tokens to Shell Companies and Individuals Linked to Financial Crimes

Tether's stablecoin USDT has become one of the most widely used cryptocurrencies in illicit finance, but the company claims it thoroughly vets its customers. However, a set of documents obtained by ICIJ reveals that Tether sold tokens to shell companies and individuals later linked to financial crimes.

During 2019-2020, Tether sold millions of dollars' worth of USDT to companies in tax havens such as the Cayman Islands, British Virgin Islands, Seychelles, and Hong Kong. Among these buyers were firms later named as laundering vehicles for North Korean hackers and the Sinaloa Cartel.

One notable customer was Alameda Research, co-founded by Sam Bankman-Fried, which purchased over 4.1 billion USDT tokens directly from Tether during this period. Bankman-Fried is currently serving a 25-year federal prison sentence for crimes related to his looting of FTX customer accounts.

Tether's CEO Paolo Ardoino assured members of Congress that the company uses vetting practices 'you would see at sophisticated financial institutions.' However, ICIJ found that Tether sold tokens to companies later linked to sanctions evasion schemes and money laundering operations.