Top line
Tether, one of the world’s most widely traded cryptocurrencies, has become a major tool for criminals, money launderers and fraudsters, according to a United Nations report published Monday, amid intense legal and regulatory scrutiny over how digital assets are being used to aid illicit activity.
The United Nations said Tether has become a major option for criminals.
Key facts
Tether is fast becoming the platform of choice for money laundering and fraud across East and Southeast Asia, the United Nations Office on Drugs and Crime (UNODC) has 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 operates a blockchain platform and issues digital tokens tied to real-world currencies backed by its own financial reserves, most notably USDT, or Tether, which is pegged to the US dollar one-for-one.
The agency said Tether’s stability, ease of use, anonymity, and low transaction fees have helped the digital currency 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.
The UN said its popularity is evidenced by the “increasing scale” of online fraud, money laundering and undercover banking, including schemes such as “sextortion”, a form of extortion that threatens to publish sexual content or information about someone, and “pig sextortion”. “. “Slaughter,” a socially engineered romance designed to “fatten up” targets before extracting the money.
The United Nations said financial authorities and law enforcement have reported a rapid increase in the use of “sophisticated, high-speed money laundering” teams specializing in Tether in recent years, as criminals advertise their services on social media platforms such as Facebook, TikTok and Telegram.
Online gambling platforms in particular “have emerged as among the most popular tools for cryptocurrency-based money laundering,” especially those using Tether, the report said, warning that they are “fueling the intensification of the ‘illicit digital economy’ that is growing rapidly in the region.” “. “
Critical quote
“Organized crime has created a parallel banking system that uses new technologies,” Jeremy Douglas, of the United Nations Office on Drugs and Crime, told the Financial Times. “The proliferation of loosely or completely unregulated online casinos alongside cryptocurrencies has increased the criminal ecosystem in the region,” Douglas warned. He warned that cryptocurrency regulations are “very underdeveloped or practically non-existent.” “The organized crime groups that exploit and fuel vulnerabilities and vulnerabilities know this.”
Main background
Tether is a form of cryptocurrency known as a stablecoin. While the value of traditional crypto assets like Bitcoin and Ether, as well as well-known and valuable currencies like Dogecoin, can fluctuate wildly with little or no reason, stablecoins are tied to other assets, particularly fiat currencies like the dollar. Tangible assets such as gold or through an algorithm. With this in mind, stablecoins are a relative haven of stability in the volatile and unpredictable cryptocurrency market. Tether claims to keep the US currency peg stable by having sufficient levels of the currency in reserve, though it has been criticized for a lack of transparency about its holdings in the past, and in 2021 was fined $41 million by the US Commodity Futures Trading Commission. For manufacturing it. Misleading statements about its reserves. Increasing levels of illicit behavior on digital platforms, a series of high-profile scandals and failures within the industry, and the growing popularity of cryptocurrencies have led to increased scrutiny of the sector from law enforcement, legislators and regulators. At present, the industry largely operates in the legal gray areas of existing financial frameworks and lacks any coherent or comprehensive guidance. While fears of anonymity enabling criminal activity appear to be a major concern for lawmakers targeting cryptocurrencies, the UN report cited data from blockchain analysis firms indicating that “less than 1%” of all cryptocurrency payments are illicit. .
the shadow
At the time of writing, Tether has the highest daily trading volume of any cryptocurrency by a wide margin. Over the past 24 hours, over $29 billion worth of Tether has been traded (bought or sold). In comparison, cryptocurrency giants Bitcoin and Ether — the second and third most traded tokens — traded around $19 billion and $13 billion, respectively, in the same time period.
Huge number
95 billion dollars. This is the total market cap of Tether. This makes Tether the third most valuable cryptocurrency by market cap. Its value is almost double that of Binance’s BNB, which is just behind it in fourth place with $48.2 billion, but is far behind the market capitalization of Ethereum ($304 billion) and Bitcoin ($834 billion). Overall, Tether makes up about 5% of the total cryptocurrency ecosystem, with a value of about $1.76 trillion.
In-depth reading
Tether Untethered: The world’s largest stablecoin loses $1 due to the collapse of the cryptocurrency market (Forbes)
The United Nations warns that the cryptocurrency Tether is increasingly favored by money launderers (Financial Times)
Myanmar overthrows Afghanistan as the world’s largest opium producer (Forbes)
US seizes $9 million in Tether coins linked to romance scams (Bloomberg)