Tether’s USDT Stablecoin Under Scrutiny Between Surging Scams in Asia

The USDT stablecoin from Tether is gaining attention due to its association with an increase in fraudulent activities in Asia, as per a recent study by the UN office on drugs and crime. Stablecoins have become a favorite weapon of crime syndicates, especially in Southeast Asia where illicit online gaming services are thriving. Stablecoins are frequently used for money laundering.

The UN research highlights the concerning trend of Southeast Asian criminal gangs using USDT as a cover for illegal operations. Tether is at the core of cryptocurrency-based money laundering, which is designated as a hotspot for online gambling companies, particularly those that operate illegally.

“While the scale of USDT’s involvement in illegal cases is not explicitly addressed, the UN’s office on drugs and crime noted a ‘rapidly growing use of sophisticated, high-speed money laundering […] teams specializing in underground tether’ in recent years,” the study said.

From Black Tokens to Cash

A troubling story of a money laundering gang with operations in Cambodia and Myanmar is reported by The Financial Times. On a busy street, this syndicate aggressively promoted USDT by offering to trade “black” tokens for cash. The boldness of these activities and the crucial part USDT plays in these covert transactions are highlighted in the study.

Tether has stated that it is committed to working with American law enforcement and regulatory agencies, even in light of USDT’s involvement in illegal activity in Asia. The stablecoin issuer stated in December 2023 that it is committed to stepping up efforts to stop illegal cryptocurrency transactions. The U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Financial Services Committee are two important organizations with which Tether has actively communicated relevant information.

Dune Analytics data demonstrates Tether’s proactive approach to stopping illegal activity. More than 1,260 addresses connected to these kinds of operations have been prohibited by the stablecoin, preventing more than $875 million worth of USDT from being stored in these wallets.