U.N. Report Exposes Tether Role In Money Laundering Scams

A report by the United Nations Office on Drugs and Crime (UNODC) has revealed that Tether (USDT), a stablecoin pegged to the U.S. dollar, is increasingly used by scammers and money launderers in Southeast Asia. The report describes Tether as a critical player in the expanding scam industry, with over $94 billion market capitalization.

According to the report, one of the standard methods scammers uses is creating fake online relationships with unsuspecting victims and then persuading them to send large amounts of money using Tether. The report states, “Law enforcement and financial intelligence authorities have reported the rapidly growing use of sophisticated, high-speed money laundering. . . teams specializing in the underground tether.”

Tether offers several advantages to criminals who want to evade detection and regulation. Erin West, a cybercrime expert and criminal prosecutor, elucidates that Tether stands out as the preferred mechanism. It is fast, and transactions are irreversible; once the money is transferred, it remains transferred. You can’t pull it back.”

The report also points out the lack of cryptocurrency regulations as a significant factor that drives criminals towards Tether. From the UNODC, Jeremy Douglas says, “Cryptocurrency regulations are way behind [the illicit activity] or practically non-existent, and organized crime groups who use and feed off vulnerabilities and weaknesses know this.”

In addition, in November 2023, Tether froze tokens worth $225 million connected to a human trafficking network in Southeast Asia, as highlighted in the report.

Tether efforts To protect The crypto Ecosystem

In response to the growing threat of illicit use of its tokens, Tether has announced a new initiative to enhance the security and integrity of the crypto ecosystem. The initiative includes a wallet-freezing policy that allows USD₮ to block suspicious transactions and accounts. Moreover, USD₮ has reportedly cooperated with U.S. authorities to help combat the misuse of its tokens on the platform.

In addition, Tether (USDT) is a stablecoin, a type of cryptocurrency that aims to keep its value stable and pegged to a fiat currency, such as the US dollar. Crypto investors seeking to sidestep the extreme volatility of other crypto utilize USD₮, enabling them to conduct transactions on the blockchain.

Furthermore, USD₮ backs its tokens with reserves of conventional currency and cash equivalents, issuing them on various blockchains such as Ethereum, Tron, and Solana. As of Jan 2024, USD₮ boasts a market capitalization exceeding $94 billion, making it one of the most extensively embraced and traded cryptocurrencies in the market.

Related Reading | Ethereum ETF Approval Delayed By SEC, Says TD Cowen

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

Comments (No)

Leave a Reply