Tether Probe, Middle East Tensions Spark $380 Million in Crypto Asset Liquidation
Bitcoin and other major crypto assets experienced sharp price fluctuations following a controversial report about Tether, which came amid rising tensions in the Middle East.
The incident caused massive losses for traders holding highly leveraged positions, with daily liquidations soaring to around US$380 million.
On October 25, the Wall Street Journal published an article stating that the US Attorney's Office was investigating Tether. According to the report, there were allegations that Tether's platform was used by third parties to conduct possible illegal activities.
Tether has vehemently denied the allegations , calling the article “reckless” and based on “unsubstantiated claims.” In a public statement, Tether stressed the lack of official confirmation from any authority and criticized the article’s reliance on unverified sources. Tether’s USDT is the industry’s largest stablecoin, with a market capitalization of around $120 billion .
The news caused a bearish market shift, halting Bitcoin’s attempt to break through $70,000 — a level not seen in three months. According to BeInCrypto data, $BTC prices fell sharply, hitting an intraday low of $66,500 before rebounding slightly to around $66,932 at press time.
Other major digital assets also fell. Solana $SOL , Ethereum, Avalanche, and Binance’s $BNB all lost more than 4% each.
Meanwhile, investor confidence took an additional hit as rising tensions in the Middle East weighed on risk appetite. Israel announced a direct strike on Iran in response to a recent missile attack, fueling fears that the ongoing hostilities could escalate into a wider regional conflict.
These factors combined to push daily liquidations to about $380 million, with the bulk of the losses falling on long traders who bet on a rise in prices. Long traders lost $310 million, while short traders lost $68.19 million.
