The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it had sanctioned several individuals and entities related to a money laundering network that relied on tether (USDT), as well as other cryptocurrencies, to move assets for Russian interests. 

The United Kingdom and the United Arab Emirates collaborated with OFAC to disrupt this network, according to the press release.

In total, OFAC has sanctioned five new individuals and four entities that were associated with the TGR Group money laundering network. 

What did this money laundering network look like?

The TGR Group, allegedly controlled by Ukrainian national George Rossi, supposedly provides services exchanging cash for crypto (and vice versa), a pre-paid card service, and helping enable “Russian nationals to purchase property in the United Kingdom.”

The press release also notes that Rossi “leveraged OFAC-sanctioned Russian crypto exchange, Garantex OU, to process USDT transactions after its date of designation.”

Among Garantex’s alleged wrongdoings was processing a variety of transactions that came from the Hydra dark market. 

Read more: Sanctioned crypto exchange Garantex probed over $20B USDT transfers 

TGR Group’s alleged money laundering network relied on a variety of entities across the world, including in Wyoming. Pullman Global Solutions LLC is allegedly more than half owned by Andrejs Bradens.

Bradens, a Latvian national, not only owns Pullman Global but also has ties to other TGR Group entities, such as TGR Corporate Concierge LTD., a firm based in the United Kingdom. 

According to the Treasury press release, Elena Chirkinyan, who is allegedly “a direct subordinate to Rossi,” leads this entity, which holds significant importance for the network. Chirkinyan was previously allegedly involved in transferring funds from RT (formerly Russia Today); apparently this was “likely to support the activities of a UK-sanctioned Russian-language media organization in the United Kingdom.”

Chirkinyan apparently “also arranged cash handovers in which USDT was sent to a cryptocurrency address… and in return cash was received by the TGR group.”

Chirkinyan additionally allegedly worked on the ability for Russian nationals to purchase property in the United Kingdom.

Analysis from CoinDesk suggests that Tether froze approximately $8 million in USDT yesterday. 

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If there’s any obvious winner among the top 10 crypto assets following Donald Trump’s secured his resounding election victory, it appears to be bitcoin. The price of the world’s largest crypto asset rallied at key moments on Tuesday, coinciding with developments in electoral predictions. 

As the Associated Press, NBC, Fox, and other news sources progressively called battleground states in Trump’s favor, traders watched bitcoin rally to a series of all-time highs. The tether between bitcoin and Trump was evident on real-time charts and displayed for the entire world to see.

Bitcoin’s swell also raised the tide across thousands of altcoins with leaderboards like CoinMarketCap turning green almost without exception. Ether, Solana, BNB, XRP, and Dogecoin are all decidedly higher now than 24 hours ago.

However, another top 10 digital asset didn’t rally at all — despite securing a massive victory. Tether (USDT), the world’s largest stablecoin, was trading at $1 yesterday and is at $1 today.

Despite its unchanged price, careful market observers were in no doubt it had scored a significant victory.

Why Tether won as well as Trump

By some estimates, Tether is one of the most profitable companies per employee in the world. Earning interest, dividends, and capital appreciation on its self-professed asset base in excess of $120 billion, Tether could be earning tens if not hundreds of millions of dollars in profit per employee.

Comfortably operating one of the most lucrative enterprises in the world, Tether’s biggest risk is governmental intervention. Because its source of assets is opaque and it has refused to audit its capital inflows, governments around the world have often threatened to investigate the company for failure to register, disclose, and comply with information-sharing requirements.

Carefully managing its governmental relations to avoid any shutdown has been Tether’s delicate dance since its inception a decade ago.

To help with managing this effort, Tether has gained a prominent ally in the largest government in the world today: Howard Lutnick, CEO of Cantor Fitzgerald.

Read more: Bitcoin Policy Institute pitches US strategic bitcoin reserve

Lutnick is Co-Chair of Trump’s transition team

Endorsed by Trump and co-chairing his presidential transition committee, Lutnick has expansive powers to help Tether manage its US government relations for years to come. As co-chair of Trump’s transition team, Lutnick is uniquely able to suggest a list of appointments to various government posts at departments like the US Treasury. 

Lutnick has personally vouched for Tether in the past because, in his view, his role at Cantor Fitzgerald granted him unique visibility into Tether’s asset base. He publicly assured skeptics about Tether’s reserves backing its stablecoin on several occasions, noting “I manage many, many of their assets.” Lest there be any doubt, he continued, “they have the money they say they have.”

Cantor Fitzgerald manages billions of dollars worth of the assets backing USDT, including interest-earning US Treasury bonds.

Lutnick is also a top contender for a presidential Cabinet position or even Secretary of the US Treasury.

In addition to Lutnick and his upcoming recommendations for presidential appointments of government workers who could be sympathetic to Tether, he is also friendly with the pro-stablecoin Bitcoin Policy Institute. As a leading think tank that will shape Trump’s policies for regulatory oversight of Tether, the Bitcoin Policy Institute has published lengthy policy recommendations that would favor Tether for years to come.

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When Shan Hanes, the former CEO of Heartland Tri-State Bank, was sentenced to 293 months in prison for his part in an embezzlement scheme that saw him direct over $47 million dollars into a “pig butchering” scheme, it was assumed that the failure of the bank would lead to a “complete loss of equity for investors.”

However, thanks to the intervention of Tether and its willingness to blacklist addresses, those investors will receive compensation.

An Amended Judgement filed today notes that Hanes was forfeiting his claim to funds held in 0xef2797225aCEF65d583F157bbAf023C290D0e7dB, an Ethereum address that the judgment notes is “held by or under the care or custody of Tether Limited.”

Checking this address in the tether token contract allowed Protos to confirm that it has been blacklisted by Tether and can no longer transact using the tether token.

Read more: Tether gives FBI peek behind the curtain

Fortune reported that yesterday Judge John W. Broomes was able to inform all shareholders that they would be reimbursed in full for their investments.

The Federal Deposit Insurance Corporation had already fully backstopped depositors at this institution. 

Tether freezing this address is likely part of its cooperation with the Federal Bureau of Investigations.

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Tether’s most recent report on its reserves shows a significant increase in what it describes as “equity.” Additionally, it claims it has made over $7 billion in profits over the last nine months and that its secured loans business has grown.

The world’s most popular stablecoin has reached a market capitalization of over $120 billion, and it holds over $80 billion in United States Treasury securities, mostly with Cantor Fitzgerald. 

History of Tether’s secured loans

Some of Tether’s clients, including Celsius and Nexo, received secured loans from it that frequently used bitcoin as collateral. However, during the industry issues in late 2022, following the bankruptcies of Celsius, FTX, Alameda Research, and many others, Tether published a blog post titled Tether Addresses FUD Around Secured Loans, Reveals Plans to Reduce These to Zero in 2023.

Read more: CHART: Tether has attracted US government action 19 times

In this post, Tether announced its intention to reduce the role of secured loans in its reserves to $0 throughout 2023. 

Instead, what it did was make enough in profits to begin describing these secured loans as “excess reserves.” This would mean the ‘excess’ funds in the reserves were greater than the size of the secured loans.

Since then, the program has continued to grow and has reached a total size of $6.7 billion. Interestingly, this now exceeds the ‘excess’ in the reserves, which totals only $6.1 billion. This means Tether is once again partially backed by these secured loans.

However, the total Tether Group “equity” of approximately $14 billion still exceeds the size of the secured loans.

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On Friday, the Wall Street Journal broke news of another US government investigation into Tether. Anonymous sources familiar with the Manhattan US attorney’s office say that senior law enforcement officials are “looking at whether the cryptocurrency has been used by third parties to fund illegal activities.”

This announcement is yet another chapter in Tether’s legal saga. As early as 2012, lawsuits began against Bitcoinica — whose source code was used by Tether’s sister company, Bitfinex.

Legal issues would affect Tether every year since.

As the world’s largest stablecoin, tether (USDT) attracts criminals who find its properties of pseudonymity, chargeback resistance, and widespread acceptance to be useful. Although most uses of USDT are innocuous, its illegitimate uses are pernicious. 

To track Tether’s run-ins with the US government across time, Protos has created a chart of some major US government actions involving the stablecoin giant. Note that this chart includes only US governmental actions and excludes numerous civil lawsuits and criminal investigations around the world.

Read more: FBI details how USDT is laundered through Binance

US government actions involving Tether

• September 18, 2015
  • Bitfinex comments on its Commodity Futures Trading Commission (CFTC) probe.
  • USDT market cap: $451,000.
• June 2, 2016
  • Bitfinex settles a CFTC allegation that it illegally traded customers’ bitcoin.
  • USDT market cap: $2.9 million.
• July 21, 2016
  • Trendon Shavers, operator of a Ponzi scheme promoted by Bitfinex founder Raphael Nicolle, receives a prison sentence.
  • USDT market cap: $6.9 million.
• September 14, 2017
  • Tether admits to the New York State Attorney General (NYAG) that since April 2017, it has not had a bank account with more than $61.5 million in cash.
  • USDT market cap: $418 million.
• May 24, 2018
  • The Department of Justice (DoJ) and CFTC open a criminal probe into USDT-based bitcoin price manipulation.
  • USDT market cap: $2.5 billion.
• April 25, 2019
  • NYAG demands documents from Tether.
  • USDT market cap: $2 billion.
• May 1, 2019
  • Arizona US Attorney charges ‘shadow banker’ Reginald Fowler for fraudulently moving Tether’s funds.
  • USDT market cap: $2 billion.
• May 5, 2019
  • The Southern District of New York (SDNY) US Attorney charges Fowler and Ravid Yosef for criminally misappropriating Tether’s reserves.
  • USDT market cap: $2 billion.
• October 25, 2019
  • Ivan Manuel Molina Lee is arrested on charges of laundering money through Bitfinex.
  • USDT market cap: $4.2 billion.
• September 24, 2020
  • US attorneys file charges against cartel members for using USDT in bribes.
  • USDT market cap: $15.2 billion.
• February 23, 2021
  • Bitfinex pays $18.5 million to settle NYAG claims that it covered up major financial losses.
  • USDT market cap: $34.7 billion.
• July 26, 2021
  • DoJ probes alleged bank fraud committed by Tether executives.
  • USDT market cap: $62 billion.
• July 27, 2021
  • US President’s Working Group on Financial Markets discusses Tether.
  • USDT market cap: $62.2 billion.
• October 15, 2021
  • CFTC fines Tether $41 million for false claims about USD reserves.
  • USDT market cap: $70 billion.
• December 8, 2021
  • A US Senator chastises Tether executives for not attending a Senate hearing.
  • USDT market cap: $77 billion.
• February 8, 2022
  • Ilya Lichtenstein and Heather Morgan arrested for stealing money from Bitfinex.
  • USDT market cap: $78 billion.
• August 3, 2022
  • A Boston US Attorney seizes 73,586 USDT proceeds of crime.
  • USDT market cap: $66 billion.
• December 15, 2023
  • Tether admits it has complied with information requests from DoJ, IRS, and Secret Service.
  • USDT market cap: $90.8 billion.
• October 25, 2024
  • A Manhattan US Attorney is investigating Tether.
  • USDT market cap: $120 billion.

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Cryptocurrency trading firm Official Gredo Limited has been convicted in a Nigerian court of illegally conducting tether (USDT)-Naira trades without a banking license, reports Nairametrics.

On Wednesday, the court heard accusations that Official Gredo failed to report a N76.5 million ($46,000) transfer to the Nigerian Financial Intelligence Unit, in violation of Nigeria’s Money Laundering Act.

The crypto firm’s director, Nnamdi Okereke, pleaded guilty to one count of money laundering.

Read more: FBI details how USDT is laundered through Binance

As part of a plea bargain with the Economic and Financial Crimes Commission (EFCC), Official Gredo and Okereke will cough up N140 million ($85,000) in restitution and pay a N1 million ($610) fine.

The crypto trading firm is just one of several recently indicted by the EFCC for illegal USDT-Naira trades, according to Politics Nigeria. Recently, Paparaxy Global Ventures and Lemskin Technologies were ordered to pay N160 million ($97,000) for similar crimes.

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Northern Data, the Tether-owned AI computing firm, has announced that it is considering leaving the bitcoin mining business just days after announcing it is on course to deliver 7.9 exahashes per second (EH/s) this year. 

On October 17, Northern Data announced its Q3 financial results, noting in a press release that its mining business was still on track to open its new Corpus Christi Texas location — critical for its hash rate goal — soon. 

However, four days later, the company revealed that it was exploring a “potential transaction of its mining business,” specifically noting that it was “exploring the divestment of its heritage crypto mining business, Peak Mining.” As a result, Northern Data would become “a pure-play AI Solutions business.” 

Northern Data states that proceeds from this transaction would be reinvested in its AI-focused business lines.

Read more: Tether: Ten years, 100,000,000,000 USDT, and still no audit

This decision may be driven by the declining proportion of Northern Data’s revenue coming from mining. This fell from 74% of its revenue at the beginning of 2024 to only 20% for Q3. Additionally, the revenue for mining has fallen from 22 million euros in Q1 to only 12 million euros in Q3. 

While Northern Data considers this pivot, Tether does have other investments in the bitcoin mining space, including Bitdeer, Volcano Energy, and 2040 Energy.

Northern Data has been involved in a dispute with former executives over claimed securities fraud. The business maintains that no inappropriate behavior occurred. 

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Telegram has become a haven for criminal networks in Southeast Asia, helping them to launder stolen funds using crypto, trade hacked data, and acquire tools for fraud, according to a United Nations (UN) report.

As reported by Reuters, the UN says the end-to-end encrypted app has fundamentally changed how organized crime operates. It found criminal enterprises in Southeast Asia, including Chinese syndicates, reportedly make between $27.4 billion and $36.5 billion annually.

Unlicensed crypto exchanges are also reportedly advertising money laundering services on the app. One advert identified by the UN claimed, “We move three million USDT stolen from overseas per day.” 

Criminal networks use Telegram to trade stolen sensitive information, from credit details to passwords, and buy up malware designed to steal funds. At least 10 deepfake software providers were also found to be advertising their services to criminals. 

Read more: Are Telegram chats actually encrypted?

The UN has previously described tether (USDT) as the stablecoin of choice for criminal networks in Asia. Indeed, earlier this year, a filed indictment detailed that somewhere in the region of $35.4 million had been stolen from victims of a pig butchering scam and converted into USDT.

Chinese authorities also dismantled an underground banking group accused of facilitating almost $2 billion worth of illicit transactions using USDT. 

Telegram founder Pavel Durov was arrested in August and charged with allowing Telegram to facilitate drug trafficking, sexual images of children, and criminal transactions.  

Durov has since introduced various changes to the platform, dropping a ‘people nearby’ feature and removing references in the FAQ to private chats being protected.

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German billionaire Christian Angermayer, who helped introduce Tether to Northern Data, has reportedly moved from the UK to Switzerland due to changing offshore wealth taxes.

Bloomberg reports Angermayer was considered a ‘non-dom’ while living in the UK, meaning his permanent home or ‘domicile’ was outside the country. This allowed the billionaire to avoid paying UK taxes on his overseas income and earnings for up to 15 years.

As of last March, non-doms have been required to pay taxes on overseas income after four years instead of the original 15. The new UK government reportedly wants to remove inheritance tax breaks on assets in overseas trusts as well.

Because of this, Angermayer told Bloomberg, “The planned changes to the non-dom framework are a huge mistake.” He claimed it would be “a bigger act of national self-harm than Brexit,” and said, “Every non-dom I know has left or is about to leave.”

He was recently revealed to have introduced Tether to various investments, including Northern Data, a firm in which he owns a stake. He was paid a 5% fee for transactions that followed this referral. He also invested in Block.One, a blockchain firm founded by Tether co-founder Brock Pierce. 

Read more: FTX used former Wirecard partner to process Chinese payments

He often charges client firms to connect them to investors. On top of this, he generates income through investments made with entities under his family office, Apeiron Investment Group.

Angermayer is moving to the city of Lugano, where bills can reportedly be paid using bitcoin and tether. An annual Bitcoin conference has also been held in the town every year since 2022 by Tether.

During his time in the UK, Angermayer reportedly lived in a London penthouse that housed a triceratops skull and various Egyptian god statues. He will continue to have a London office.

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Deltec Bank and Trust has reportedly sold its lines of business to Britannia Bank and Trust; both banks have served Tether and operate in the Bahamas. 

According to the Nassau Guardian’s interview with Britannia’s chairman Julian Francis, it is not acquiring Deltec, just Deltec Bank’s business lines.

Deltec Bank CEO Odetta Morton repeatedly noted that she believes this “will result in an optimal path for continuing to deliver best-in-class service, technology, and access to global markets.”

Read more: Executive texts claim Deltec moved customer funds from FTX to Alameda

At one point, Deltec Bank was one of the most important banks in the crypto ecosystem, providing Tether a link to the banking system after most banks refused to do business. It also provided a convenient service to many other cryptocurrency entities.

Indeed, it was Deltec executives and leaders who collaborated with FTX and Alameda Research in the purchase of Farmington State Bank, later Moonstone, in Washington state.

It was also alleged that Deltec provided Alameda Research with large lines of credit to facilitate its tether arbitrage.

Tether has also banked with Britannia for years, and both DigiFinex shareholders and Britannia Financial Group are major Conservative donors in the UK. 

The founding chairman of Britannia Financial Group, Julio Herrerra Velutini, was charged with bribery in Puerto Rico, and he has subsequently stepped down from the businesses. 

It is not clear now why Deltec Bank and Trust found it advantageous to sell these business lines, but to preserve the entity.

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