A recent report from the United Nations Office on Drugs and Crime stated that the USDT stablecoin Tether is fueling an increase in fraud in Asia.
According to a report seen by the Financial Times, USDT has become a major tool among criminal gangs in Southeast Asia, many of which use the stablecoin to launder money and operate illegal online gambling platforms.
“Online gambling platforms, especially those operating illegally, have emerged as among the most popular tools for cryptocurrency-based money laundering, especially for those using Tether.”
United Nations Office on Drugs and Crime
While the extent of USDT’s involvement in illegal cases has not been explicitly addressed, UNODC has noted the “rapidly increasing use of sophisticated, high-speed money laundering teams (…) specializing in covert operations” in recent years.
The Financial Times also reported one case where a money laundering group operating in Myanmar and Cambodia had a sign on a busy street advertising USDT to exchange “black” tokens for cash.
Despite the increasing use of USDT by criminal groups in Asia, Tether, the stablecoin issuer, appears willing to cooperate with US law enforcement and regulatory authorities. In December 2023, the stablecoin issuer expressed its commitment to intensify efforts against illicit cryptocurrency transactions, sharing relevant information with members of the US House of Representatives Financial Services Committee and the US Senate Committee on Banking, Housing, and Urban Affairs.
Data from Dune Analytics reveals that Tether has blocked more than 1,260 addresses linked to illicit activity, with the total USDT in blocked wallets exceeding $875 million to date.