The U.S. Department of Justice has launched an investigation into Tether, the company that issues the USDT stablecoin, for possible sanctions and anti-money laundering violations, the WSJ reports.

Manhattan prosecutors are looking into whether USDT was used to fund criminal activity, including drug trafficking, hacking, terrorism, and sanctions evasion.

Tether says the allegations are baseless and calls the WSJ report rumors that ignore its cooperation with authorities.

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