Tether, one of the world’s largest crypto platforms, has emerged as one of the leading payment methods for money launderers and fraudsters operating in Southeast Asia, the UN’s Office on Drugs and Crime (UNODC) warned in a report. Tether’s stablecoin USDT would be the cryptocurrency of choice of organized crime and its underground banking and money laundering infrastructure in East and Southeast Asia.
USDT in Money Laundering and Online Scams
The UN report points out that USDT has become increasingly popular among money launderers, particularly those using online gambling platforms operating outside legal boundaries. These platforms have emerged as significant channels for cryptocurrency-based money laundering.
While casinos and junkets have for years served as vehicles for regional underground banking and money laundering, the proliferation of online gambling platforms, e-junkets, and both illegal and underregulated cryptocurrency exchanges in Southeast Asia has changed the game, allowing for faster anonymized movement of funds.
UNODC report
The report also touches upon the use of USDT in “pig butchering” romantic scams, a form of fraud that involves deceiving individuals into investing in fraudulent schemes. Tether itself has acknowledged its association with investigations into these scams. In November, Tether reported assisting the U.S. Department of Justice in freezing about $225 million in USDT in wallets linked to a human trafficking group in Southeast Asia, which was involved in a pig-butchering scam.
Disruption of Money Laundering Networks
Law enforcement agencies have been actively targeting networks involved in the illicit transfer of Tether funds. A notable instance occurred last August when Singaporean authorities conducted an operation that led to the dismantling of a money laundering network. This operation resulted in the recovery of approximately $735 million in cash and cryptocurrencies.
Tether’s Expanding Influence and Regulatory Engagement
Despite these concerns, Tether’s presence in the global stablecoin market has grown substantially. In 2023, Tether’s share of the global stablecoin supply increased from 50% to 71%. Furthermore, Tether CEO Paolo Ardoino mentioned in a letter to U.S. legislators that the company has onboarded agencies like the U.S. Secret Service and the Federal Bureau of Investigation onto its platform, indicating a proactive stance in collaborating with law enforcement.
