- The United Nations reported on sophisticated money laundering schemes involving crypto.
- In their response, Tether’s executive team reveals one key detail the UN report lacked.
- Tether CEO demands education on blockchain technology for effective cooperation with the law.
The globally leading stablecoin issuer Tether is in hot water after the United Nations (UN) published a report alleging that USDT is becoming a top choice for criminal activities in Southeast Asia, including a huge stream of sophisticated money laundering such as ‘Pig Butchering’ and ‘Sextortion.’
In an official response to the accusations by the United Nations in its 106-page report, Tether’s team stated that they’re “disappointed in the UN’s assessment that singles out USDT highlighting its involvement in illicit activity while ignoring its role in helping developing economies in emerging markets.”
This is because researchers at the United Nations dismissed blockchain technology as a traceable financial instrument despite Tether having signed collaboration deals with multiple global law enforcement institutions, including the DOJ, FBI, and USSS.
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Tether’s official statement insists that blockchain technology has the upper hand in crime prevention compared to traditional banking systems, which “have been the vessel for laundering substantial sums” for decades, according to Tether’s executive team.
Last November, the US Department of Justice (DoJ) confiscated $9M in USDT tokens from an organized crime ring that had specialized in ‘Pig butchering,’ an elaborate scam involving emotional manipulation by pretending to be romantically involved with the victim.
However, the issue heavily depends on the cybersecurity of social media platforms, as ads with illegal online casinos, phishing sites, and fake dating websites have been known to flood the top social platforms, which are not necessarily linked to cryptocurrency.
Tether CEO Calls for Blockchain Education Initiative
In a personal response on X, Tether’s CEO Paolo Ardoino insisted that education on blockchain technology is needed “on all levels” and that recent efforts to combat money laundering and terrorism funding have already achieved success.
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Indeed, Tether had previously announced a $225M freeze on assets linked to human trafficking in the Southeast Asian region.
Ultimately, while crypto scams have risen since 2022, the issuer of the world’s largest stablecoin has a solid record of cooperation with legal entities. For example, in October 2023, Tether blocked 32 crypto addresses linked to terrorism in Israel and Ukraine. Finally, Tether’s letter implied “a lack of effort” from institutions to understand the fundamentals of blockchain technology.
On the Flipside
- While the research paper by the United Nations is titled “Casinos and cryptocurrency: Major drivers of money laundering, underground banking, and Cyber fraud in East and Southeast Asia,” only a small portion of online casinos accept cryptocurrency payments.
Why This Matters
Tether is the most popular stablecoin, and the third-largest digital asset, with a global market capitalization exceeding $94 billion.
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