United Nations identifies USDT as prominent choice for fraud in SEA: FT

Quick Take

  • A United Nations report published Monday suggested that USDT has become a prominent payment method for money laundering and scams in Southeast Asia, according to the Financial Times.

Tether USDT +0.20% ’s USDT stablecoin has become one of the prominent payment methods for money laundering and scams in Southeast Asia, the United Nations warned in a report on Monday.

“Online gambling platforms, especially those operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether,” the UN report said, per the Financial Times.

The UN also reportedly suggested the world's most-popular stablecoin has been widely used in underground fraud, including romantic scams known as “pig butchering.” This may not comes as a surprise — in November, Tether said that it assisted the U.S. Department of Justice and froze about $225 million in USDT in external, self-custodied wallets linked to an international human trafficking group in Southeast Asia responsible for a pig-butchering scam.

The report additionally noted how law enforcement agencies have disrupted multiple money laundering networks involved in the transfer of illicit Tether funds in recent years. Last August, for example, Singaporean authorities conducted an operation that led to the dismantling of one such network — resulting in the recovery of around $735 million in both cash and cryptocurrency.

In response to the UN report, Tether said in a statement that the report ignores USDT’s role in helping developing economies. “We are disappointed in the UN’s assessment that singles out USDT highlighting its involvement in illicit activity while ignoring its role in helping developing economies in emerging markets, completely neglected by the global financial world simply because servicing such communities would be unprofitable for them,” Tether wrote. “Tether tokens, using public blockchains, make it possible to meticulously track every transaction, making it an impractical choice for illicit activities.”

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In December, Tether CEO Paolo Ardoino said in a letter shared with U.S. legislators that it has onboarded the U.S. Secret Service and Federal Bureau of Investigation onto its platform.

Over the course of 2023, Tether saw its share of global stablecoin supply grow from 50% to 71%, according to The Block data.

Update: Added Tether's response


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About Author

Timmy Shen is an Asia editor for The Block. Previously, he wrote about crypto and Web3 for Forkast.News from Taiwan after spending more than three years in Beijing covering finance and current affairs at Caixin Global and Chinese tech at TechNode. His China-related reporting has also appeared in The Guardian. When he's not chasing headlines, you'll find him savoring hot pot and shabu shabu in a Taipei local haunt. Timmy holds an MS degree from Columbia University Graduate School of Journalism. Send tips to [email protected] or get in touch on X/Telegram @timmyhmshen.

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