According to the United Nations (UN), nearly $17 billion in USDT has been used as a means of payment for money laundering and scams in Southeast Asia.…
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USDT is used for money laundering, says UN
Tether’s USDT stablecoin is once again at the center of fierce criticism, and not the least. According to a new report from United Nations Office on Drugs and Crime (UNODC), USDT has become a preferred means of payment for money laundering and fraud in Southeast Asia.
Named “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat”, the report highlights the close link between illegal online casinos and cryptocurrency exchange platforms. The UN reports that approximately 17 billion USDT were involved in various criminal activities between September 2022 and September 2023.
Organized crime groups have converged where they see vulnerabilities.
Jeremy Douglas, UNODC Regional Representative for Southeast Asia and Southeast Asia
In particular, USDT stablecoin is implicated in scams such as “pig butchering” scams. This scam involves creating fake relationships and then extorting money from the victims.
The appeal of USDT to money launderers and fraudsters is justified by the ease of anonymizing transactions via mixers on the blockchain, the UN believes. So, once the money is sent, it’s difficult to be able to trace them.
As a reminder, two US senators had already made similar accusations against Tether. Cynthia Lummis and French Hill have recently denounced the use of Tether’s USDT to finance war in the Middle East and Ukraine.
USDT is not the problem, fiat is
The lawsuit brought against the USDT by the UN revives the debate on the use of cryptocurrencies in illegal activities. We’ll never stop repeating it: the illegal use of cryptocurrency is marginal compared to fiat currency. Indeed, criminal organizations like the Hamas are shunning cryptocurrencies because of the transparency of the blockchain. Unfortunately, fiat currencies cannot claim this level of transparency.
In particular, it’s this feature of blockchain that makes it easier for state authorities to fight crime via crypto. Indeed, the UN report mentions the seizure of $737 million in cryptocurrency by Singaporean authorities.
In addition, USDT is issued and managed by the company Tether which can freeze accounts suspected of criminal activity. The company recently frozen 161 accounts belonging to individuals sanctioned by the United States. Tether has even integrated the FBI and the U.S. Secret Service to its platform to effectively combat the criminal use of USDT.
Criminals might have used Tether’s USDT. However, illegal use of the cryptocurrency is marginal compared to fiat, thanks to the transparency of the blockchain and Tether’s commitment. The fight against illegal financial flows is noble. Alas, it can only bring about change if it is aimed at the right target. USDT is not one, at least not the highest priority.
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.
