- Tether is increasingly favored by money launderers, according to the United Nations.
- Tether’s appeal to criminals lies in its speedy and irreversible transactions.
- The lack of cryptocurrency regulations is identified as a key factor driving criminals towards Tether.
Stablecoin Tether (USDT) is increasingly becoming the payment method of choice for money launderers, according to a report by the United Nations Office on Drugs and Crime.
The report reveals that Tether has emerged as a leading choice among fraudsters and money launderers operating in Southeast Asia. With a market capitalization exceeding $94 billion, Tether is described as a central player in the growing landscape of scams.
The UN report sheds light on a prevalent tactic used by scammers who establish fake romantic connections online to gain victims’ trust, subsequently convincing them to transfer substantial sums using Tether.
The report notes, “Law enforcement and financial intelligence authorities have reported the rapidly growing use of sophisticated, high-speed money laundering . . . teams specializing in underground tether.”
Tether’s appeal to money launderers and criminals lies in its ability to facilitate speedy and irreversible transactions on a blockchain, as highlighted by Erin West, a criminal prosecutor and cybercrime expert. West explains, “Tether is the mechanism of choice . . . it’s fast and transactions cannot be retracted. Once money is moved, it’s moved. You can’t pull it back.”
Jeremy Douglas from the UN’s Office on Drugs and Crime attributes the criminal preference for Tether to the absence of cryptocurrency regulations. He remarks, “Cryptocurrency regulations are way behind [the illicit activity] or practically non-existent, and organized crime groups who use and feed off vulnerabilities and weaknesses know this.”
The report cites an incident from November of the previous year, where Tether froze $225 million worth of tokens linked to a human trafficking syndicate in Southeast Asia.
Tether recently announced an initiative aimed at safeguarding the crypto ecosystem. This initiative includes the introduction of a wallet-freezing policy to enhance security measures. Additionally, the stablecoin operator has reportedly collaborated with U.S. authorities to mitigate the illicit use of tokens on the platform.
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