Unraveling Tether’s Role in Southeast Asian Criminal Activities

Unraveling Tether’s Role in Southeast Asian Criminal Activities

In a startling revelation, the United Nations Office on Drugs and Crime has flagged Tether’s USDT stablecoin for its involvement in fostering criminal activities across Southeast Asia.

The Pervasive Impact of USDT in Asian Scams

A recent report disclosed by the Financial Times sheds light on the alarming surge in scams fueled by Tether’s USDT stablecoin in Asia. The UN’s report points to USDT as a pivotal tool adopted by criminal networks in Southeast Asia, utilizing the stablecoin for money laundering and the operation of illicit online gambling platforms.

Cryptocurrency as a Catalyst for Money Laundering

The report emphasizes the prevalence of online gambling platforms, particularly those operating outside legal boundaries, as hotspots for cryptocurrency-based money laundering. Tether, in particular, has become the preferred choice for these unlawful activities.

“Online gambling platforms, especially those operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether.”

— United Nations Office on Drugs and Crime

The Escalating Challenge of Tether-Enabled Money Laundering

While the report does not explicitly quantify the scale of USDT’s involvement in illegal cases, the UN’s office on drugs and crime highlights the concerning trend of a “rapidly growing use of sophisticated, high-speed money laundering […] teams specializing in underground tether” in recent years.

Brazen Advertising of USDT in Criminal Circles

The Financial Times report recounts a striking case where a money laundering syndicate, operating in Myanmar and Cambodia, boldly advertised USDT on a busy street. The syndicate used the stablecoin to exchange “black” tokens for cash, underscoring the audacity with which criminals are embracing USDT for their illicit transactions.

Tether’s Response and Collaborative Efforts

Despite the rising prevalence of USDT in criminal activities in Asia, Tether, the issuer of the stablecoin, has demonstrated a willingness to cooperate with U.S. law enforcement and regulatory authorities. In December 2023, Tether publicly committed to intensifying efforts against illicit crypto transactions. The stablecoin issuer pledged to share pertinent information with members of the U.S. House Financial Services Committee and U.S. Senate Committee on Banking, Housing, and Urban Affairs.

A Proactive Stance: Banning Illicit Addresses

Data from Dune Analytics reveals Tether’s proactive measures in curbing illicit activities. The stablecoin has banned over 1,260 addresses associated with illegal endeavors, surpassing a staggering $875 million in total USDT held in banned wallets.

In conclusion, the UN’s identification of Tether’s USDT as a catalyst for criminal activities in Southeast Asia raises critical concerns. While Tether vows to combat illicit transactions, the challenge persists, urging global regulatory bodies to collaboratively address the escalating use of stablecoins in unlawful practices.

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