UN Tether Report Highlights Concerns About USDT Fraud And Money Laundering

Key Points:

• The UN warns that Tether, a major cryptocurrency, is a preferred choice for money launderers in Southeast Asia.
• Tether is at the center of scams involving false connections and large fund transfers, with a surge in advanced money laundering teams, as per the UN Tether report.

According to the Financial Times, Tether, a major player in the cryptocurrency space, has raised concerns as one of the primary payment methods employed by money launderers and fraudsters in Southeast Asia, warns the United Nations.

UN Tether Report Flags The Stablecoin Issuer as Key Tool for Money Laundering

According to a report released by the UN Office on Drugs and Crime, Tether’s crypto token, known as USDT, is central to a burgeoning industry of scams. The fraudulent schemes involve tactics like establishing false romantic connections to gain victims’ trust, leading them to transfer substantial sums, commonly known as “pig butchering.”

Law enforcement and financial intelligence agencies have observed a rapid surge in the use of advanced money laundering teams specializing in the underground use of USDT, the UN Tether report states. The cryptocurrency’s role in these illicit activities has been accentuated by the evolution of cryptocurrency and other technological advancements.

The UN Tether report underlines the longstanding practice among organized crime groups in Southeast Asia of utilizing black-market casinos for laundering illicit funds. Online gambling platforms, especially those operating illegally, have become popular avenues for cryptocurrency-based money laundering, with Tether being a preferred choice.

Jeremy Douglas from the UN’s Office on Drugs and Crime highlights the emergence of a parallel banking system facilitated by organized crime through new technologies. He notes that the proliferation of unregulated online casinos, coupled with the use of cryptocurrencies like Tether, has amplified the criminal ecosystem in the region.

Tether’s digital token, a stablecoin pegged to the US dollar, stands out as the largest of its kind, with approximately $95 billion in circulation. The UN Tether report also mentions recent successful efforts by authorities in dismantling money laundering networks handling illicit Tether funds, including a Singaporean operation that recovered $737 million in cash and crypto last August.