Tether has responded to the United Nations (UN) report emphasizing using Tether’s stablecoin USDT in illicit activities.
On January 15, the Southeast Asia and the Pacific division of the United Nations Office on Drugs and Crime (UNODC) published a report on concerns about the illicit and clandestine utilization of cryptocurrencies.
A Hidden, Accelerating Threat: Casinoes, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia, the report identified the USDT stablecoin as a significant conduit for money laundering. The report highlighted USDT’s increasing prominence as a cryptocurrency utilizing the Tron blockchain.
The UNODC report stated, “USDT on the Tron blockchain has become a preferred option for regional cyber fraud operations and money launderers due to its stability, ease of use, anonymity, and low transaction fees.”
Tether contested the United Nations study on January 15 and emphasized that the agency’s analysis “ignored the traceability” of USDT and disregarded its track record of international law enforcement collaboration.
“Additionally, the United Nations should deliberate on the potential of centralized stablecoins to bolster endeavors against financial crime,” Tether stated, adding that the company is eager to work together.
As part of a United States investigation into a Southeast Asian human trafficking syndicate, Tether froze over $300 million in USDT associated with illegal activities in recent months, including $225 million in November 2023. Tether declared:
“The UN’s assessment 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 continued by stating that the collaboration between global law enforcement and Tether token tracking assures “unparalleled monitoring, surpassing traditional banking systems, which have been used for decades to launder substantial sums.”
For a more effective response to financial crimes, the stablecoin company urged the international community and the United Nations to collaborate and raise awareness of blockchain technology.
U.S. legislators have requested Department of Justice intervention regarding the illicit use of USDT. The announcement comes shortly after Tether declared its intention to become a “world-class partner to the U.S.” by mid-December 2023.
Global regulators have consistently identified financial crimes and money trafficking concerns as significant challenges associated with cryptocurrencies such as Bitcoin.
Nevertheless, specific reports have indicated that criminals have been substituting cryptocurrencies for fiat currencies, such as the U.S. dollar, in recent years when conducting illegal transactions.
