The cryptocurrency market experienced significant volatility over the past 24 hours as XRP’s value declined below the crucial $0.50 support level. This decline was primarily triggered by allegations surrounding the stablecoin giant Tether and affected many digital assets in the market.
The Wall Street Journal published a report alleging that Tether, the company behind the USDT stablecoin, is under investigation by U.S. federal prosecutors. According to the publication, authorities are examining potential violations of anti-money laundering regulations and investigating whether USDT has been utilized in terrorist financing operations.
The impact of this news was particularly significant given Tether’s dominant position in the cryptocurrency ecosystem. USDT is currently the largest stablecoin in the crypto market, but the stablecoin lost its $1 leg following the allegation.
Stablecoins are designed to maintain a consistent value relative to traditional currencies like the U.S. dollar, and play a crucial role in cryptocurrency trading and keeping the market stable. USDT fell to $0.9974 but has recovered slightly. At press time, it traded at $0.9988.
XRP’s Decline
The repercussions of the Tether investigation report were immediately evident in XRP’s price performance. The digital asset, which had been approaching a breakthrough at the $0.53 level, experienced a sharp decline.
At 22:25 UTC the digital asset fell to $0.4936, its lowest level since early August when the broader cryptocurrency market underwent a significant correction. The recent decline mirrors similar market reactions to regulatory scrutiny of major cryptocurrency entities.
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Tether’s Response to the Allegations
The market downturn proved relatively short-lived, as Tether’s management quickly responded to the allegations. Paolo Ardoino, Tether’s CEO, released a statement via X dismissing the Wall Street Journal’s claims.
Ardoino emphasized that there were no indications of an ongoing U.S. investigation into the company’s operations. There had been recent rumors about a USDT bubble, but nothing that involved a Federal investigation or allegations of financing terrorism.
Tether subsequently released an official statement challenging the validity of the Wall Street Journal’s reporting. The company criticized the publication for presenting unsubstantiated allegations without providing supporting evidence, characterizing the claims as a repetition of outdated speculation.
The cryptocurrency market demonstrated resilience following Tether’s swift denial of the allegations. At press time, XRP was trading at $0.514. It has recovered the $0.5 level but still has to brace up as it is down 1.72% over the past 24 hours.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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