Crypto Rally Foiled by Report of DOJ Probe of Tether

Cryptocurrency prices have reversed early gains and are broadly lower during U.S. afternoon hours on Friday following a Wall Street Journal report that the U.S. is probing stablecoin issuer Tether for violations of sanctions and anti-money laundering rules.

Stablecoins are a type of cryptocurrency whose value is pegged to another asset, typically the U.S. dollar. With a market cap in excess of $120 billion, tether {{USDT}} is by far the most widely used stablecoin.

Earlier in the session, crypto prices had been on the rise, with bitcoin {{BTC}} nearing the $69,000 level and perhaps readying for a late-day or weekend challenge of topping $70,000 for the first time in three months. In the minutes following the news on Tether, bitcoin had tumbled to as low $66,500, down nearly 2% over the past 24 hours, before modestly bouncing back to $66,800. The broader market gauge CoinDesk 20 Index was lower by 2.3% over the same time frame.

Taking to X shortly following the story, Tether Chief Technology Office Paolo Ardoino said the WSJ is "regurgitating old noise." There is no indication, said Ardoino, that Tether is under investigation.