Tether’s new bank implicated in Venezuelan bribery scandal

The embattled ‘stable’ crypto can’t catch a break right now. 

Less than a week after rumours that somewhat-itinerant stablecoin, Tether, had set down its virtual bags with the Bahamas-based Deltec Bank were confirmed – and the Tether.io team produced a new letter attempting to confirm that they were playing nice, and actually possessed the dollars necessary to peg the $1.8bn of its crypto currently in circulation – its new home has become embroiled in a whole new bout of controversy.

According to reports by local sources, accounts based at two Bahamian banks are currently under the investigatory spotlight for their alleged role in handling proceeds from a $1.2bn money laundering ruse being played-out by Venezuelan government  officials. One of those banks is – you guessed it – Deltec.

According to Tribune 242’s business reporters, US federal authorities are looking to seize assets held by Deltec and  Ansbacher (Bahamas), as part of an ever-tightening ring of sanctions the Trump administration has looked to place on the South American country, which also seems to have had assets frozen by the UK, and has recently had problems with its native cryptocurrency, the Petro.

Apparently, $12m of the funds the US authorites are interested in, belong to admitted embezzler Abraham Edgardo Ortega, who admitted to siphoning the money away from the Venezuelan state-run oil company in a recent plea agreement with US authorities.

While none of this relates directly to Tether, it does highlight the problematic banking situation in the Caribbean country, which has just been placed on the Financial Action Task Force‘s watchlist due to “strategic deficiencies in their anti-money laundering/counter terror financing regimes.”

After a rough month, that saw the Premium of cryptocurrencies bought with Tether briefly exceed $1,000, the team behind the crypto rather proudly announced its new deal to bank with Deltec last week.

Its statement proclaimed that “Tether Ltd is pleased to confirm that it has established a banking relationship with Deltec Bank & Trust, a 72-year-old financial institution with headquarters in the Commonwealth of The Bahamas,” and added that Deltec’s acceptance of Tether “came after their due diligence review of our company.”

A letter issued by Deltec appeared to confirm Tether indeed had the $1.83bn dollars needed to peg its circulating crypto 1:1 with the US dollar, but fell well short of an audit. It also markedly failed to prove that the same had been the case when the amount of Tether circulating was almost a billion dollars higher a little less than a month prior to its announcement. The latest controversy surrounding its choice of bank will therefore likely fuel more fire in the bellies of its vociferous chorus of critics.