- Binance moved $3.9 billion in Tether just days before agreeing to pay a massive $4.3 billion DOJ settlement related to regulatory compliance issues.
- The timing of the Tether transfer raises questions about whether the funds are connected to the impending DOJ fine that Binance must pay.
- Tether is the largest stablecoin but has faced controversy over its dollar reserves and lack of auditing, so the massive Tether transfer by Binance draws scrutiny.
Crypto exchange Binance recently moved $3.9 billion worth of Tether stablecoins, just days before the company agreed to pay a massive fine as part of a settlement with U.S. authorities. The timing and amount of the Tether transfer raises eyebrows about whether the funds are connected to the impending DOJ settlement.
Details of the Tether Transfer
On November 9th, Binance moved $3.9 billion in Tether from one of its cold wallets to another internal wallet. The cold wallet had held the bulk of Binance’s funds, while the receiving wallet now holds over $32 billion in assets after this transfer, mostly in Tether.
The Timing Relative to the DOJ Settlement
Just days after the Tether transfer, Binance and its CEO Changpeng Zhao agreed to pay $1.8 billion in criminal fines to U.S. authorities. They will also forfeit another $2.5 billion, bringing the total penalty close to $4.3 billion.
The settlement relates to charges over Binance’s regulatory compliance and anti-money laundering controls. While it’s unclear if the Tether funds will be used to pay the fine, the timing so close to the settlement raises questions.
The Controversy Around Tether
Tether is the largest stablecoin with $88 billion in circulation. But its 1:1 dollar backing has been under regulatory scrutiny for years. Tether maintains it has enough reserves, but has yet to provide a full audit.
Recently Tether has cooperated with authorities to freeze funds related to illicit activity. But stablecoins like Tether are crucial to crypto trading, so the massive transfer of Tether by Binance turns heads.
While the details are still uncertain, Binance’s movement of $3.9 billion in Tether right before its massive settlement with U.S. authorities is curious timing. As the crypto industry awaits further details, the transfer calls Tether’s controversies back into focus.