The United Nations Office on Drugs and Crime recently released a report spotlighting Tether, one of the world’s largest stablecoins, and its increasing role as a tool for money launderers and fraudsters operating in Southeast Asia.
The report, made public on Monday, emphasizes the rising use of Tether’s stablecoin USDT in illicit activities, raising alarms among law enforcement and financial intelligence authorities.
Of particular concern are scams associated with Tether, including schemes manipulating false romantic connections to establish trust with victims before persuading them to transfer substantial sums – a tactic known as “pig butchering,” as reported by the Financial Times.
Tether Emerges as a Preferred Choice for Money Launderers
The report reveals a significant growth in sophisticated, high-speed money laundering teams that specialize in leveraging Tether for underground transactions. The evolution of cryptocurrency, combined with technological advancements, has empowered organized crime groups in Southeast Asia to exploit black market casinos for laundering illicit funds. According to the report, online gambling platforms, especially those operating illegally, have become popular avenues for cryptocurrency-based money launderers, with Tether’s USDT being a favored choice.
Jeremy Douglas of the UN’s Office on Drugs and Crime commented on the situation, stating:
“Organized crime has effectively created a parallel banking system using new technologies, and the proliferation of loosely or entirely unregulated online casinos, together with crypto, has supercharged the region’s criminal ecosystem.”
Dismantling Tether-Linked Money Laundering Networks
Tether, a stablecoin pegged to the US dollar, has enabled traders to navigate in and out of crypto trades, distinguishing it from other cryptocurrencies like Bitcoin primarily used for speculation.
The report highlights recent efforts by authorities to dismantle money laundering networks associated with Tether, including a successful operation by Singaporean authorities that recovered $737 million in cash and crypto last August.
Despite regulatory scrutiny and enforcement crackdowns in various jurisdictions, criminal groups persist in adopting the leading stablecoin as a preferred method for moving funds.
Some casinos have even specialized in handling stablecoin transactions, underscoring the cryptocurrency’s role in illicit financial activities.
