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Tether Turmoil: Federal Probe Sparks Massive Crypto Liquidations and Market Jitters

Word on the StreetSaturday, Oct 26, 2024 8:00 pm ET

1min read

In the past 24 hours, the cryptocurrency market has experienced significant turbulence, largely due to reports of a U.S. federal investigation into Tether, a major stablecoin issuer. Bitcoin saw an intraday drop of nearly 4%, falling to around $66,000. Other cryptocurrencies like Ethereum and Solana also witnessed substantial declines.

This volatility has led to massive liquidations, with over 130,000 investors facing liquidation positions. CoinGlass reports indicate a staggering $368 million was liquidated in the past 24 hours alone.

The investigation focuses on Tether’s alleged violations of sanctions and anti-money laundering regulations. Known for issuing the USDT, a stablecoin pegged to the U.S. dollar, Tether has a market value of approximately $120 billion, making it a critical component of the cryptocurrency ecosystem.

The potential regulatory crackdown on Tether could have far-reaching consequences for digital assets. Legal experts suggest that Tether's collapse could be catastrophic for the broader crypto economy, given its entrenched role.

The actions of high-profile companies like Tesla, which reportedly moved a large portion of its Bitcoin holdings, further contribute to market uncertainty. Observers are left to speculate whether this indicates a wider trend of institutional caution or strategic repositioning within the crypto space.

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