Tether, a major player in the stablecoin market, has responded to a United Nations (UN) report that implicated its USDT stablecoin in illegal activities. On January 15, the UN Office for Drugs and Crime (UNODC) division for Southeast Asia and the Pacific released a report focusing on the use of cryptocurrencies in illicit transactions and underground banking. The report, titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat,” identified USDT, particularly on the Tron blockchain, as a key tool for money laundering in the region. It cited USDT’s stability, anonymity, ease, and low transaction fees as reasons for its popularity among cyber fraudsters and money launderers.
In response, Tether challenged the UN’s findings on the same day, arguing that the report overlooked the traceability of USDT and its history of cooperation with law enforcement agencies globally. Tether suggested that the UN should also consider how centralized stablecoins could enhance efforts against financial crimes. The company highlighted its proactive stance in freezing over $300 million in USDT linked to illicit activities in recent months, including $225 million in November 2023 related to a U.S. investigation into a Southeast Asian human trafficking ring.
Tether criticized the UN report for focusing solely on USDT’s alleged role in illegal activities, while ignoring its positive impact on developing economies in emerging markets, which are often overlooked by the global financial system. The firm emphasized that its collaboration with global law enforcement results in exceptional monitoring capabilities, surpassing those of traditional banking systems, which have historically been used for significant money laundering.
The stablecoin firm urged the global community and the UN to work together and enhance understanding of blockchain technology to more effectively combat financial crimes. This statement comes after Tether expressed its desire in mid-December 2023 to be a “world-class partner to the U.S.,” following requests from U.S. lawmakers for the Department of Justice to take action against the illicit use of USDT.
While global regulators have long viewed financial crimes and money laundering as major concerns with cryptocurrencies like Bitcoin, recent reports indicate a shift, with criminals increasingly favoring fiat currencies or other cryptocurrencies for illegal transactions.
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