Additional Bribery Case Found For Tether’s New Bank, Deltec

  • It was previously found that Tether’s new bank, Deltec Bank & Trust, was under investigation for laundering money from a Brazilian official
  • Recently, sources find that Deltec is involved in another case, this time involving Venezuelan officials.

Over the past few months, cryptocurrency exchange Bitfinex has been having banking issues. Specifically, users have been doubting whether or not Bitfinex, who shares management with Tether, has the dollar reserves required to back their stablecoin (USDT).

Making matters worse, some Bitfinex users have reportedly been unable to complete deposits and withdrawals. Things got so bad that as Tether issues spread, Bitcoin jumped 10% as users made a flight for safety.

After these issues, it looks like Bitfinex is trying to fix their banking partners. After leaving Noble Bank of Puerto Rico, it was confirmed that Bitfinex found a new banking partner, Deltec Bank & Trust. Deltec even went as far as to confirm with an official letter that Bitfinex was banking with them and that they have the required reserves.

However, all that glitters isn’t gold. Breaker Magazine recently reported that Deltec has been named in two global bribery cases. A previous Bahamian news report claims that Deltec is under investigation by the U.S. government for reportedly receiving $12M in bribes from a Venezuelan official.

Days later, Breaker also found that former Brazilian official Paulo Vieria de Souza, under investigation for the Odebrecht corporate bribery scheme, was possibly moving money through Deltec Bank & Trust. CryptoGlobe previously reported on this Brazilian case.

There’s no clear indictment so far, but Deltec is currently under investigation for these crimes. It could be found that Deltec is completely innocent, but either way, this shows some of the problems businesses face when they bank in the Bahamas. Due to their relatively relaxed banking laws, the islands have long been a tax haven and money laundering heaven.

Tether has had problems for at least a year, making users doubt their trust in the token itself. Due to this insecurity, countless stablecoin alternatives are popping up everywhere. From Gemini to Circle, various firms have launched stablecoins that compete with Tether.

Global Task Force, U.S. Tax Agency, SEC Dominate Crypto Headlines

Regulations are ruling the crypto headlines so far this week. Over the past 24 hours, we’ve learnt the Financial Action Task Force (FATF) is reportedly set to finalize new international standards for regulating cryptocurrency firms next month. The commissioner of the Internal Revenue Service (IRS) has stated his agency has “made it a priority” to issue more comprehensive crypto tax guidance “soon.” Finally, the U.S. Securities Exchange Commission (SEC) announced it would delay, once again, its decision on the VanEck and SolidX Bitcoin exchange-traded fund (ETF) proposal.

At the time of writing, bitcoin (BTC) and ether (ETH) are trading at $7,945.4 and $252.9; a 0.54% and 0.83% jump over the past 24 hours, respectively. As for the MVIS CryptoCompare Digital Assets 10 Index, it is currently tracking at 3,822.7 (-0.6%).

Global Standards for Regulating Crypto Firms Next Month

According to reports from CoinDesk, the FATF is set to finalize new international standards for regulating cryptocurrency firms next month. These standards, they report, are widely expected to subject crypto exchanges, wallet providers, and other businesses to the “travel rule” – a colloquial term given to a rule found in the Bank Secrecy Act (BSA) that requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution.

Introduced in 1996 in the U.S., the “travel rule” is designed to help law enforcement agencies detect, investigate, and prosecute money laundering and other financial crimes by preserving an information trail about persons sending and receiving funds through funds transfer systems. The arrival of such international standards would go beyond the basic know-your-customer requirements that are widely enforced in the crypto space at present.

IRS Commissioner: More Detailed Crypto Tax Guidance ‘A Priority’

According to letter from IRS Commissioner Charles P. Rettig dated May 16, the agency has “made it a priority” to issue a more comprehensive tax guidance for cryptocurrencies. The Commissioner’s letter was written in response to a request from 21 Congressmen to provide clarity on tax treatment in relation to cryptocurrency holdings.

In 2014, the U.S. tax agency issued a guidance for cryptocurrency. In his May 16 response letter, Rettig revealed the IRS will “soon” issue more robust guidance. “I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions,” the Commissioner wrote.

SEC Delays Decision on VanEck SolidX Bitcoin ETF

The SEC announced the postponement of a decision regarding the VanEck SolidX bitcoin ETF proposal. The postponed ETF proposal was initially filed over a year ago. In January – amid the U.S. Government shutdown – it was withdrawn, only to be resubmitted later that month. On March 29, the commission delayed the joint proposal for the first time. The SEC must announce its decision – or, for the final possible time, postpone its decision – on the proposed bitcoin ETF no later than August 19.

Notably, the U.S. investor watchdog is seeking comments from the public in relation to the proposed VanEck SolidX bitcoin ETF. To guide commentary, they included fourteen questions in Monday’s filing. Comments must be submitted within the following 21 days, whilst rebuttals to said comments are due within the next 35 days.