Chainalysis Uncovers $100 Million Cryptocurrency Fraud Scheme in Myanmar
Chainalysis, in collaboration with the US anti-slavery group International Justice Mission, has revealed a case of fraud involving a single company operating from a compound in Myanmar. The company swindled over $100 million from victims within a span of two years using digital coins issued by Tether, one of the largest cryptocurrency platforms. The analysis conducted by Chainalysis traced the payments made to the company located in KK Park, eastern Myanmar, using Tether tokens. These payments were made by families of trafficked workers who had been forced to pay ransoms for their release.
Criminals Continue to Use Tether Despite Traceability
Despite the traceability of Tether tokens, criminals continue to utilize them in their illegal activities. This case is just one example of a larger trend of criminal activity involving digital assets. Chainalysis and International Justice Mission have chosen not to disclose the identity of the company involved in order to protect the victims of human trafficking who were working there. Former workers provided information regarding the two crypto wallets used by the company to receive illicit funds. KK Park, where the compound is located, is believed to house thousands of trafficked workers involved in online scams.
Tether Takes Action Against Illicit Use
Tether, which manages nearly $100 billion in assets, has faced increased pressure due to its association with criminal activities. The UN’s office on drugs and crime recently warned about Tether becoming a leading payment method for money launderers and fraudsters in Southeast Asia. In response, Tether has stated that it is collaborating with authorities worldwide to prevent the illicit use of its token and has already frozen $276 million associated with pig butchering scams. Additionally, Tether has blacklisted almost 1,300 crypto wallets, with the numbers surging since granting access to its platform to US authorities.
Tether and Tron: Popular Choices for Scammers
Most of the tracked $100 million in cryptocurrency associated with the company in Myanmar was traded on the Tron blockchain. This blockchain network has become one of the largest in the industry, offering low transaction fees. The stability of Tether’s price and Tron’s affordability make them attractive options for scammers. However, while blockchain transactions can be more challenging for law enforcement agencies to track, the use of Tether and Tron presents an opportunity for disruption of illegal activities with global coordination.
Hot Take: The Importance of Global Cooperation
This case highlights the scale of the problem and emphasizes the need for global cooperation to combat cryptocurrency fraud schemes. By quantifying the extent of these scams, identifying other fraudulent activities within the network, and discovering more victims, law enforcement agencies can take action against criminals. Although Tether and Tron transactions can be traced on a public ledger, it requires collaborative efforts across borders to effectively disrupt illegal activities and protect vulnerable individuals.
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