Tether’s USDT, a major player in the crypto realm, has been accused by the United Nations of fueling illicit activities in Southeast Asia’s black market. According to an explosive report by the UN’s office on drugs and crime, Tether is allegedly empowering money launderers and fraudsters, enabling activities ranging from “pig butchering” scams to online gambling and supporting human trafficking syndicates.
The term “pig butchering” refers to a deceptive tactic where fraudsters build trust with victims through social media, messaging, and dating apps, ultimately pressuring them into investing in fraudulent cryptocurrency or online trading schemes.
The unregulated nature of cryptocurrencies has become a double-edged sword, emboldening organized crime groups in Southeast Asia to exploit black market casinos for laundering illicit funds. The UN report identifies online gambling platforms, particularly illegal ones, as popular vehicles for cryptocurrency-based money laundering, with USDT being a preferred choice.
Jeremy Douglas of the UN’s Office on Drugs and Crime stated, “Organised 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.”
The report highlights instances where authorities dismantled money laundering networks associated with Tether, including a Singaporean operation that recovered $737 million in cash and crypto last August. In response, the U.S. Secret Service collaborated with the stablecoin issuer and OKX, asking for a freeze of tokens during a month-long investigative effort.
Tether Writes To US Congress
Tether, in collaboration with the U.S. Department of Justice, participated in the investigation, leading to the freezing of tokens linked to an international human trafficking syndicate. While details about the group’s activities were not disclosed, the firm claimed it was the largest-ever freeze of its token.
The regulatory scrutiny around Tether has intensified, with a 27% surge in blacklisted Tether wallets reported by industry data provider CCData. Tether, previously accused of aiding Chinese nationals in sidestepping capital controls, is also under the spotlight for enabling underground activities in Cambodia, according to a recent report by the South China Morning Post.
In response to growing regulatory concerns, Tether has disclosed letters sent to the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Financial Services Committee, reaffirming its commitment to preventing the illicit use of stablecoins. The stablecoin operator has actively engaged with U.S. authorities to address concerns and ensure regulation compliance.