Of all the legal actions taken against cryptocurrency companies by US regulators and prosecutors over the past year, arguably none threatens to shake up the digital-asset industry as much as a potential crackdown on Tether Holdings Ltd.

The federal government is investigating cryptocurrency company Tether for possible violations of sanctions and anti-money-laundering rules, according to people familiar with the matter. The criminal investigation,

Tether CEO Paolo Adroino said on Friday that there was "no indication" that the cryptocurrency firm was under any investigation after a media report that the federal government was probing the company.

Cryptocurrencies dipped across the board following a report that the US was investigating the issuer of the Tether stablecoin that underpins much of the trading in the digital asset world.