- The UN warns that Tether, one of the world’s largest cryptocurrency platforms, is increasingly being used for money laundering and scams in south-east Asia.
- Scams, including ‘pig butchering,’ are on the rise, exploiting victims’ trust and luring them into transferring large sums through Tether.
Tether, a prominent cryptocurrency platform, has come under scrutiny from the United Nations (UN) for its role in facilitating money laundering and scams, particularly in the south-east Asian region. In a report released by the UN’s office on drugs and crime, it was revealed that Tether’s crypto token, also known as tether, has become a central component of a rapidly growing industry of fraudulent activities, including elaborate scams designed to establish fake romantic connections, often referred to as
The report highlights the emergence of sophisticated, high-speed money laundering teams specializing in the use of Tether. These criminals have been exploiting the speed and relative anonymity of the cryptocurrency to move illicit funds seamlessly. Online gambling platforms, particularly those operating illegally, have become prime vehicles for cryptocurrency-based money laundering, with Tether being the preferred choice.
Jeremy Douglas of the UN’s office on Drugs and Crime noted that organized crime groups have effectively established a parallel banking system using new technologies, and the combination of unregulated online casinos and cryptocurrencies has accelerated criminal activities in the region.
Tether’s digital token is a stablecoin, pegged to the US dollar, and valued at roughly $95 billion in circulation. The report mentions several instances where authorities dismantled money laundering networks associated with Tether, recovering substantial sums. In one case, a joint investigation led to the freezing of $225 million worth of Tether tokens linked to a “pig butchering” and human trafficking syndicate in south-east Asia.
The appeal of Tether for criminals lies in its ability to offer fast and irreversible transactions on a blockchain, making it challenging for victims to recover their funds once transferred. Erin West, a criminal prosecutor and cybercrime expert, emphasized that victims are often blinded by love and the promise of quick wealth, making them vulnerable to these scams.
Despite regulatory crackdowns on digital assets, criminal groups continue to exploit Tether for moving funds. Some casinos have even specialized in handling Tether tokens, further facilitating money laundering operations.
Tether Implicated in Street-Level Money Laundering; Regulatory Pressure Mounts
The report sheds light on a money laundering syndicate in Myanmar and Cambodia, prominently advertising Tether on the streets and offering to exchange “black” tokens for cash. Tether did not respond to requests for comment.
In response to concerns, Tether has taken measures to prevent illicit use of its token, collaborating with US authorities. The number of blacklisted Tether wallets has increased by approximately 27%, indicating ongoing efforts to combat misuse.
Tether has faced regulatory scrutiny in recent years over asset management and financial institution ties, including a $41 million fine by the Commodity Futures Trading Commission. Additionally, revelations of deposits with Britannia Financial Group, led by Julio Herrera Velutini, who faced bribery charges, have contributed to Tether‘s regulatory challenges.
In summary, the UN’s report highlights Tether’s growing role in money laundering and scams, particularly in south-east Asia, where it has become a preferred choice for criminals due to its speed and irreversibility in transactions. The cryptocurrency’s ongoing regulatory challenges underscore the need for stricter oversight in the digital asset space.