Backers of major cryptocurrency reportedly falsified documents to access banks

The entities behind one of the biggest cryptocurrencies in the world reportedly used falsified documents and shell companies to avoid getting cut off from the global banking system.

In 2018, some of the backers of stablecoin tether used false information in the banking process, according to the Wall Street Journal. Stephen Moore, one of the owners of Tether Holdings Ltd., said in an email that a major tether trader based out of China was attempting to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal.”


Moore had reportedly signed some of the falsified contracts and sales invoices, but argued in an email sent around the time that using the fake information was too risky and that they should give up on opening the accounts using the dubious documents.

“I would not want to argue any of the above in a potential fraud/money laundering case,” he wrote in an email viewed by the Wall Street Journal, which obtained a cache of documents and emails.

The emails received show that the companies behind tether, the world’s largest stablecoin, and Bitfinex, one of the largest cryptocurrency exchanges, engaged in a concerted effort to maintain access to the banking system and would, at times, obfuscate their identities in order to do so.

The Department of Justice is reportedly investigating Tether, although it is unclear whether authorities are specifically investigating the company’s 2018 effort to open bank accounts using falsified documents.

Stablecoins like tether are a form of cryptocurrency that ties its value to an underlying asset, such as gold or fiat currency. Stablecoins don’t fluctuate in value wildly, as some cryptocurrencies such as bitcoin do, because they are asset-backed. Banking is of particular importance to tether, though, as it ties its value to the U.S. dollar.

Stablecoins have caught the eye of U.S. regulators and Treasury Secretary Janet Yellen has convened meetings with federal regulators to discuss the need to come up with plans to regulate the unique cryptocurrencies.

The news about tether and Bitfinex comes on an already bad day for the cryptocurrency markets.

Bitcoin was already down after speculators began to doubt the health of major crypto firm Silvergate Capital. After weeks of gains, the flagship cryptocurrency tumbled by more than 5% on Friday.


Silvergate announced that it wouldn’t be filing its annual 10-K report on time, which is required by the Securities and Exchange Commission and details the company’s financial state. Silvergate said that it would need a couple more weeks and is “currently analyzing certain regulatory and other inquiries and investigations.”

The delay caused investors to fear that the crypto bank is struggling to stay in business.