The most popular stablecoin on the market, Tether (USDT), has become a key tool for money laundering and fraud in Southeast Asia.
The United Nations (UN) Office on Drugs and Crime published a report warning of the widespread use of USDT in illicit activities. The Financial Times writes about this.
The extent of use remains unknown
According to the UN, the USDT stablecoin is one of the most popular means of payment among criminal groups in Southeast Asia. Many of them use the asset to launder money and operate illegal online casino platforms.
“Online casino platforms, especially those operating illegally, have become some of the most popular means of cryptocurrency-based money laundering, especially for those using Tether,” the UN report said.
However, the actual extent of USDT’s participation in illegal transactions will remain unknown. Not only that, the organization emphasized that stablecoin is very popular in underground fraud. In particular, this concerns the “pig butchering” scheme, in which attackers trick people into investing in a fictitious business.
Why do criminals love USDT?
The report notes that attackers’ interest in stablecoins is largely based on the speed and irreversibility of transactions. In addition, criminals take advantage of the lax regulation of the crypto industry.
Financial Times journalists even mentioned a case where one syndicate operating in Myanmar and Cambodia installed a sign on a busy street advertising USDT for exchanging tokens for fiat.
Collaborating with jurisdictions worldwide
Nevertheless, the stablecoin issuer is actively cooperating with the American authorities. On December 1, 2023, the company adopted a new wallet freeze policy to assist law enforcement in combating the illegal use of stablecoins. It involves freezing all addresses on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list.
Thus, Tether currently cooperates with 19 jurisdictions around the world. In the middle of last month, the company froze 326 wallets with a total balance of $435 million at the request of the authorities.
In November, the issuer also blocked $225 million in a human trafficking case in Southeast Asia. This was done as part of an investigation by the US Department of Justice (DOJ).
