- Tether has expressed “disappointment” at a recent UN report which highlighted the popularity of its USDT token among criminals in Southeast Asia
- The report said that money launderers and pig butchering scam operators favor USDT’s speed, cost and lack of regulation
- Tether argued that it has a track record of working with law enforcement and carefully watches over its coins
Tether has said that it is “disappointed” in a claim made this week by the United Nations that its USDT stablecoin is one of the leading payment methods for money launderers and fraudsters operating in Southeast Asia. The United Nations Office on Drugs and Crime (UNDOC) published a report on Monday which claimed that USDT on the Tron blockchain has become the preferred means of moving illicit funds around the region, most notably from pig butchering scams. Tether argued that it conducts “unparalleled monitoring” of its token and pointed to its assistance with law enforcement agencies worldwide as evidence of its desire to work within the law.
USDT is “Preferred Choice” For Criminals
The UN report claimed that the use of cryptocurrency, particularly USDT, for money laundering has surged in Southeast Asia recently, with the world’s biggest stablecoin becoming “the preferred choice for regional cyberfraud operations and money launderers”. Online gambling platforms, especially illegal ones, have become popular vehicles for cryptocurrency-based money launderers in the region, with USDT favored due to its ability to enable quick and irreversible transactions.
UNDOC says that such is Tether’s prominence in this field a parallel banking system has effectively been created on the back of it, with operators of pig butchering scams also being prolific users of USDT. The body argues that criminal groups exploit Tether’s swift and irreversible transactions, while the lack of robust cryptocurrency regulations creates vulnerabilities that organized crime effectively leverages in the region.
Tether Hits Back
In its rebuttal, Tether argued that UNDOC’s analysis “ignores the traceability of Tether tokens and the proven record Tether has of collaborating with law enforcement.” These collaborations include the company freezing more than $300 million within the last few months as well as the implementation of security measures, including the development of a tool for monitoring secondary markets, created in collaboration with Chainalysis.
The company also noted its work with law enforcement agencies as another feather in its cap that was being ignored:
The monitoring of Tether tokens through our collaboration with global law enforcement including the DOJ, FBI, and USSS (which was recently onboarded on the Tether platform) ensures unparalleled monitoring, surpassing traditional banking systems that for decades have been the vessel for laundering substantial sums proven by the fines that have been levied on them. Tether tokens, using public blockchains, make it possible to meticulously track every transaction, making it an impractical choice for illicit activities.
Tether added that UNDOC’s report ignored Tether’s role in “helping developing economies in emerging markets, completely neglected by the global financial world simply because servicing such communities would be unprofitable for them.”
The company added that it was extending an invitation to the UN to “engage in collaborative dialogue, echoing successful collaborations with dozens of global law enforcement agencies including the DOJ and the USSS.”
