Stablecoin Tether Used for Money Laundering in Southeast Asia, Says UN Study
A new study conducted by the United Nations Office on Drugs and Crime (UNDOC) reveals that the stablecoin tether (USDT) has become a popular method of payment among money launderers and fraudsters operating in Southeast Asia. The study also highlights how tether is being used in pig butchering scams. Online gambling platforms, especially unregulated ones, are the preferred channels for money laundering using tether.
Emergence of Underground Tether Money Laundering Teams
The UNDOC report sheds light on the rising trend of underground tether money laundering teams that operate swiftly and with sophistication. Jeremy Douglas, UNDOC’s regional representative, notes that organized crime has effectively established a parallel banking system using new technologies. The easy availability of unregulated online casinos and cryptocurrencies has greatly boosted criminal activities in the region.
Gap in Crypto Regulations
Despite efforts by the stablecoin issuer to prevent criminals from accessing stolen funds, the UNDOC report highlights that cryptocurrency regulations are lagging behind the illicit activities. Tether froze $250 million worth of tokens in its largest asset freeze to date in November 2023. While law enforcement agencies have had some success in cracking down on money laundering involving USDT, the lack of comprehensive regulations still hinders their efforts. Criminal groups exploit vulnerabilities and weaknesses in the system due to the inadequate regulations surrounding stablecoins.
Hot Take: Tether’s Role in Money Laundering Threatens Crypto Reputation
The UN study’s findings regarding tether’s use in money laundering contribute to the negative perceptions surrounding cryptocurrencies. With the emergence of underground tether money laundering networks, it is evident that stricter regulations are required to combat these criminal activities. While efforts have been made to freeze illicit funds, the lack of robust regulations leaves cryptocurrencies vulnerable to exploitation by organized crime groups. To protect the reputation and integrity of the crypto industry, it is vital for regulators to address these shortcomings and establish comprehensive frameworks for the use of stablecoins.
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