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A US consumer watchdog begins a nationwide ad campaign against Tether, two Binance executives are cleared of tax evasion in Nigeria and an Indian regulator fines Binance for anti-money laundering (AML) failures.
The US’ oldest consumer watchdog, Consumers’ Research, has launched a multimillion-dollar campaign to raise awareness of allegations of criminal activity against Tether, the world’s largest stablecoin issuer.
The watchdog, founded in 1929, said the "Tethered To Corruption" campaign seeks to outline its view that the stablecoin issuer is a danger to consumers and could lead to the “next crypto disaster”.
“Tether has chronically been under investigation for fraud, yet it refuses to be independently audited,” the group said. “According to reports, it is a go-to form of payment for cartels, human trafficking networks, sanctions evaders and terrorist organisations like Hamas.”
The campaign includes a 30-second TV ad backed by a seven-figure national buy; a website, TetheredToCorruption.com; a digital billboard in Times Square; and a series of mobile billboards in other locations in New York and Washington, DC.
“We are shining a light on Tether for their suspicious business practices, including a decade-long refusal to perform an audit and the routine use of the product by terrorists and traffickers,” said Will Hild, executive director of Consumers’ Research.
“Consumers should be wary of any so-called stablecoin that refuses to properly certify that they actually hold the assets they claim. Given these warning signs, we fear that Tether may very well be the next FTX.”
Consumers’ Research is known as a right-leaning, libertarian watchdog. Its other activities include ongoing campaigns against BlackRock’s investments in China and what it calls the firm’s “war on American energy”.
It is also campaigning against environmental, social and governance (ESG) scores and the imposition of climate disclosure requirements on US firms.
The group is well connected to other US conservative media outlets, and its latest campaign has already been featured by the Daily Mail, The Daily Wire, ZeroHedge, Town Hall and on Glenn Beck’s "The Blaze" website.
Tether’s track record
Many of the group's warnings against Tether draw on prior enforcement actions against the stablecoin issuer. In 2021, for example, Tether settled with regulators in New York and with the Commodity Futures Trading Commission (CFTC) after being accused of hiding losses and overstating its reserves.
Consumers’ Research also draws attention to more recent probes into Tether’s activities by members of the US Congress, the US Department of Justice (DOJ) and the UN Office on Drugs and Crime (UNODC).
In April this year, Tether was named by the US Senate Banking Committee as helping Russian firms to evade sanctions. Committee members such as Elizabeth Warren (D-MA) and Cynthia Lummis (R-WY) have also written to the DOJ and other federal agencies calling for criminal charges against Tether.
Responding to the campaign, a Tether spokesperson said the allegations against its reserves have been “thoroughly disproven”. The stablecoin issuer also pointed to its recent efforts to assist US law enforcement agencies in fighting crypto crime. It did not respond to a request for comment from Vixio.
“Notably, Tether has integrated the FBI and the US Secret Service into its platform to enhance efforts against criminal activity involving stablecoins,” the spokesperson said. “To date, Tether has blocked or frozen over $1.3bn in USDT linked to illicit activities.”
Binance executives cleared of tax evasion in Nigeria
Two Binance executives who were detained and charged in Nigeria following a compliance dispute have been cleared of tax evasion.
Tigran Gambaryan, head of financial crime compliance, and Nadeem Anjarwalla, regional manager for Africa, had the charges dropped by Nigeria’s Federal Inland Revenue Service (FIRS).
In place of the two executives, the FIRS refiled its case against a local representative of Binance, who is now named as the sole defendant.
Both Gambaryan, a US national, and Anjarwalla, a UK national, are still accused of money laundering under charges brought by Nigeria’s Economic and Financial Crimes Commission (EFCC).
The FIRS’ decision follows an intervention earlier this month by 16 US lawmakers, who wrote to President Joe Biden in an effort to secure Gambaryan’s release.
The lawmakers argued that Gambaryan has been “wrongfully detained” in Nigeria, and that the circumstances of his detention meet the definition of a hostage-taking by a foreign government.
“Mr Gambaryan’s health and well-being are in danger, and we fear for his life,” they said. “Immediate action is essential to ensure his safety and preserve his life. We must act swiftly before it is too late.”
One week after the letter was sent, FBI director Christopher Wray travelled to Abuja to meet with Nigerian President Bola Tinubu.
In a statement published on June 14 — the same day the tax evasion charges were dropped — Wray applauded the two countries’ close cooperation on a number of crime-fighting issues.
“Our relationship with Nigeria is a very important one,” said the FBI director. ”I want to assure you of our support — whether it is on counter-terrorism, cyber-enabled crimes, kidnapping, joint investigations and intelligence sharing.”
Binance hit by $2.2m fine in India
Meanwhile, in India, Binance has been fined $2.2m for failure to comply with the country’s AML rules.
In December 2023, India’s Financial Intelligence Unit (FIU) sent a show cause letter to Binance, giving it an opportunity to dispute a likely penalty for non-compliance with the Prevention of Money Laundering Act (PMLA) 2002.
After considering oral and written responses from Binance, the director of the FIU ruled that the charges against Binance are “substantiated”.
In May, Binance became the first offshore exchange to secure registration with the FIU, conditional on payment of the AML fine, which at the time was yet to be quantified.
