Bangladesh, Sept. 1 -- Tether promised sophisticated customer screening. Its own records raise a disturbing question: did the worlds biggest stablecoin issuer know enough about the people buying its digital dollars?

Cryptocurrency was supposed to revolutionize finance.

It promised transparency, speed and freedom from the cumbersome machinery of traditional banking. Yet one of cryptos most powerful instruments has also become a favored vehicle for moving money across borders-quickly, anonymously and with fewer conventional barriers.

At the center of this growing controversy is Tether, the company behind USDT, the worlds most widely used dollar-pegged stablecoin.

Tether has consistently defended its compliance standards. In a 2023 lette...