In most jurisdictions that is prima facie fraudy fraud fraud,
From the Wall Street Journal, Updated March 3, 2023 3:19 pm ET:
Tether Holdings and related crypto broker obscured identities, documents show
In late 2018, the companies behind the most widely traded cryptocurrency were struggling to maintain their access to the global banking system. Some of their backers turned to shadowy intermediaries, falsified documents and shell companies to get back in, documents show.
One of those intermediaries, a major tether trader in China, was trying to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal,” Stephen Moore, one of the owners of Tether Holdings Ltd., said in an email viewed by The Wall Street Journal.
Mr. Moore said it was too risky to continue using the fake sales invoices and contracts, which he had signed, and recommended they abandon the efforts to open the accounts, the emails show. “I would not want to argue any of the above in a potential fraud/money laundering case,” he wrote.
Tether runs tether, the $71 billion stablecoin that is the most widely traded cryptocurrency, and a sister company runs Bitfinex, one of the world’s largest crypto exchanges. Losing access to the banking system was “an existential threat” to their business, the companies said in a lawsuit.
A cache of emails and documents reviewed by the Journal show a long-running effort to stay connected to the financial system. The companies often hid their identities behind other businesses or individuals. Using third parties occasionally caused problems, including hundreds of millions of dollars of seized assets and connections to a designated terrorist organization.
In a statement after this article was published online, Tether said the Journal’s report was “wholly inaccurate and misleading” and said that Tether and Bitfinex have “world-class compliance programs” and adhere to legal requirements.
Mr. Moore didn’t reply to requests for comment.
Tether has been under investigation by the U.S. Justice Department, according to a person familiar with the matter. The investigation has been overseen by the Manhattan U.S. attorney’s office....
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