According to ChainCatcher, Bloomberg reported, citing people familiar with the matter, that Tether instructed crypto customers to send U.S. dollars to its Bahamas-based banking partner Capital Union Bank Ltd. through Signature's Signet payment platform to pay for its USDT stablecoin. People familiar with the matter said that although it is unclear when this arrangement began, it began before Signature Bank was taken over by regulators last month.

“The banks used by Tether always have access to multiple banking channels and counterparties,” Tether said in an emailed statement. The company’s risk management “enables us to identify specific risks and weaknesses that others overlook, ensuring that our entities are not affected by direct or indirect risk exposure to Signature.” As previously reported, U.S. prosecutors had been investigating Signature Bank’s work with crypto clients before regulators abruptly took over the bank.

Justice Department investigators in Washington and Manhattan are looking into whether Signature took adequate steps to detect potential money laundering by its clients, such as scrutinizing people who opened accounts and monitoring transactions for signs of crime, the people said. The bank and its employees have not been accused of wrongdoing, and the investigation is likely to close without further action.

It is reported that Capital Union, a boutique bank headquartered in Nassau, Bahamas, lists digital assets as one of its main businesses, and other businesses include lending, wealth management, trading and execution. The company was founded in 2013 and had a net profit of US$50.1 million in 2021 and total assets of US$1.56 billion. Capital Union and another Bahamian bank, Deltec Bank & Trust Ltd., are responsible for the safekeeping of Tether's cash reserves, while Cantor Fitzgerald LP is the custodian of Tether's U.S. Treasury bonds. (Source link)