Crypto Rally Foiled by Report of DOJ Probe of Tether

Bitcoin appeared poised to make another run at $70,000, but a WSJ story of a criminal probe into the stablecoin issuer sent prices tumbling.

A Justice Department probe into stablecoin issuer Tether (CRYPTO: USDT) has halted a crypto rally on Friday, sending prices tumbling.

What Happened: Cryptocurrency prices reversed early gains and were broadly lower during U.S. afternoon hours on Friday following a Wall Street Journal report.

The report said 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 of over $120 billion, tether is by far the most widely used stablecoin.

Bitcoin (CRYPTO: BTC) appeared poised to make another run at $70,000. Earlier in the session, crypto prices were rising, with bitcoin nearing the $69,000 level.

Bitcoin was trading nearly 2% lower over the past 24 hours at $66,800 in the minutes following the news on Tether.

The news on Tether sent bitcoin prices tumbling to as low as $66,500. Bitcoin prices recovered slightly following the news.

Related Link: 5 Things To Know About Stablecoins

Tether Reacts: Tether Chief Technology Office Paolo Ardoino said the WSJ is “regurgitating old noise” in a statement to CoinDesk shortly following the story.

There is no indication that Tether is under investigation, Ardoino said in the statement.

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