Tether’s New Banking Partner Being Investigated

| Publish date: 11/07/2018

Law enforcement authorities in Brazil have asked the Bahamian authorities for help in investigating Tether’s new banking partner, Deltec Bank & Trust. According to local news reports in Brazil, the bank is being investigated for suspicious transactions that could be related to money laundering activities.

The Investigation

Sao Paulo’s Federal Public Prosecutor’s Office is investigating Paulo Vieira de Souza, the ex-director of DERSA, the public road infrastructure company. De Souza has already been implicated and is being prosecuted for bribery in the Odebrecht scandal, which is being described by the US government as the biggest foreign bribery case in history.

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Now it has come to light that the former head of DERSA transferred a total sum of 25 million Swiss francs (~$25 million) to the accounts of Nantes Group, a Panama-based offshore company. These accounts were reportedly operated by a private bank called Bordier & Cie in Switzerland. De Souza himself is a beneficiary on this account.

Further investigation showed that the money trail did not end there. The moneys were then transferred to accounts in Tether’s new banking partner in February of this year. Brazilian authorities are currently awaiting a response from their counterparts in the Bahamas.

Tether and Deltec Bank & Trust

While Tether is not involved in the money laundering case, the stablecoin is also now facing fresh controversy with regard to its relationship with Deltec Bank & Trust.

Tether had released a statement on November 1 that it had an account with the Bahamas-based bank worth $1.8 billion. This is the total capitalization that backs the stablecoin. Along with the press release, the Tether also posted a PDF document on its website. This document was supposedly a signed document given to Tether by Deltec Bank & Trust Ltd., confirming Tether’s account as well the amount deposited.

However, this posting only led to more questions being raised. The document was glaringly scant on details. The signature on the document was illegible and there was no name or accompanying title or designation. What made things more suspicious is that when the media tried to get in touch with the bank for a statement, Deltec has refused to respond and has remained silent on this issue. The bank’s spokesperson, Melanie Hutcheson, who was contacted by phone, declined to either confirm or deny that Tether was banking with them.

This development is proving to be worrisome for the crypto community. The stablecoin has been rumored to lack the required cash reserves to back all the cryptos currently has in circulation. And since the company still has failed to complete a public audit by a third party, questions continue to abound.


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