Tether Cryptocurrency Becoming ‘Preferred Choice’ Among Money Launderers

[Husires]

Tether has fast become the platform of choice for money laundering and fraud operations across East and Southeast Asia, the United Nations Office on Drugs and Crime (UNODC) warned in a report on organized crime and illicit banking in the region.

Tether, which did not immediately respond to Forbes’ request for comment, is a company that runs a blockchain platform and issues digital tokens pegged to real-world currencies with the backing of its own financial reserves, most notably USDT, or tether, which is tied to the U.S. dollar one-for-one.

The agency said tether’s stability, ease of use, anonymity and low transaction fees has helped the digital token become a “preferred choice” for fraudsters and money launderers alike and intelligence agencies across the region say tether ranks “among the most popular cryptocurrencies” used by organized crime groups.

source https://www.forbes.com/sites/roberthart/2024/01/15/tether-cryptocurrency-becoming-preferred-choice-among-money-launderers-and-scammers-un-warns/?sh=553fd7ef6385


It seems that the authorities have finished with Bitcoin and are now targeting Tether, as there are accusations that the stable currency is used for money laundering and crime due to its ease of transfer between users instead of transferring money in large bags.
Tether has a history of freezing funds inside wallets and not ensuring that every dollar they hold is printed with USDT in return and it has held out so far, I don't know how it will react to the legal issues.

[Zed0X]

I posted about this in the Stable Coins Board. Here's Tether's response https://tether.to/en/tether-challenges-un-report-and-calls-for-blockchain-education/

I had to laugh a bit at the statement on USDT's anonymity. Since we all know that's not the case, it actually made me question about the validity of UN's findings. How can they even say that when Tether has already frozen a lot of funds.

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It seems that the authorities have finished with Bitcoin and are now targeting Tether,

I don't think so. It's the money launderer's that eased up on using BTC (and maybe even mixers) because they find it harder to convert to fiat/stable coin nowadays. Maybe they thought using USDT (probably after several hops) is less suspicious.

[Husires]

I had to laugh a bit at the statement on USDT's anonymity. Since we all know that's not the case, it actually made me question about the validity of UN's findings. How can they even say that when Tether has already frozen a lot of funds.

I do not remember that Tether has frozen coins of an individual or an account for money laundering before. They freeze funds that are hacked from platforms or that have been issued a court order but I have not heard of an individual case of an account being frozen.

I don't think so. It's the money launderer's that eased up on using BTC (and maybe even mixers) because they find it harder to convert to fiat/stable coin nowadays. Maybe they thought using USDT (probably after several hops) is less suspicious.

the use has changed, many use cryptocurrencies in investment has become much greater, we have a lot of KYC exchanges or more that require identity verification and still have a user base in the millions.

[joniboini]

I do not remember that Tether has frozen coins of an individual or an account for money laundering before. They freeze funds that are hacked from platforms or that have been issued a court order but I have not heard of an individual case of an account being frozen.

I think that is their main argument against the report. Even if there were no cases of individual accounts being frozen, they have the ability to do that so the government can simply ask them to help. It would hurt their image if they claimed they could freeze anyone's wallet anytime they wanted to, so that's probably why they don't outright say so. I think one of the report's goals is likely to put some pressure on Tether so that they will have an easier time getting the data they need from Tether if they want to do so. Basically get more control over Tether or other stablecoins. CMIIW.

[Husires]

I think one of the report's goals is likely to put some pressure on Tether so that they will have an easier time getting the data they need from Tether if they want to do so. Basically get more control over Tether or other stablecoins. CMIIW.

This is what will happen, but it will be the last thing that happens, meaning that the company aims for profit, so it will try for the longest time not to make investors afraid of freezing their assets, but at some point it will have to deal with governments, especially in cases involving millions of dollars.

As for small scam that reach the local police, they may cooperate in the future or it may be the last thing that happens, but even the regulatory authorities will not try to put significant pressure on Tether, otherwise they will push these criminals to use Monero or DAI.