Tether Under Scrutiny: Do Scammers Prefer USDT?

Table of Contents

• UN Claims USDT As Scammer Favorite
• Tether’s Role in Underground Fraud
• Law Enforcement Actions
• Tether's Defense

A United Nations report has shed the spotlight on Tether for its alleged role as the currency of choice in money laundering and fraud in Southeast Asia. This report comes amidst growing concerns surrounding the misuse of digital assets for illegal activities

UN Claims USDT As Scammer Favorite

The United Nations Office on Drugs and Crime (UNODC) revealed in its report on organized crime and illicit banking that USDT is being widely used in facilitating illicit activities in the region. As per UNODC, Tether has become a favored choice in illegal online gambling platforms for money launderers. The stability, user-friendliness, anonymity, and low transaction fees of Tether have collectively made it a "preferred choice."

Tether’s Role in Underground Fraud

The UN report goes further to suggest that Tether also has links to an underground fraud, including a notorious scam known as "pig butchering." This activity was brought to light when Tether collaborated with the US DoJ to freeze $225 million in USDT connected to an international human trafficking group operating out of Southeast Asia.

Law Enforcement Actions

The report underscores law enforcement agencies' efforts to dismantle money laundering networks associated with illicit Tether funds. In one notable operation last August, Singaporean authorities successfully disrupted a network, leading to the recovery of approximately $735 million in both cash and cryptocurrency.

Tether's Defense

In response to the UN report, Tether issued a statement expressing disappointment in the assessment that singles out USDT for its alleged involvement in illicit activities. The company defended itself by emphasizing its role in aiding developing economies in emerging markets and argued that the transparency provided by public blockchains makes it impractical for illicit activities, as every transaction can be meticulously tracked.

The team also wrote, 

“The UN’s analysis ignores the traceability of Tether tokens and the proven record Tether has of collaborating with law enforcement. Rather than focusing solely on risks, the UN should also discuss how centralized stablecoins can improve anti-financial crime efforts. There are yet many more opportunities to work to stop financial crimes on blockchains, and it behooves the UN to work with the industry to understand and execute modern strategies to fight financial crime. Tether will happily collaborate on such matters.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.