UN Highlights USDT’s Role in Money Laundering Schemes

The stablecoin USDT has become a popular tool among fraudsters and money launderers, according to a report by the United Nations Office on Drugs and Crime, as reported by the Financial Times.

The organisation notes that the asset is increasingly used in romantic scams, the “pig butchering” scheme, and on the black market of online casinos in Southeast Asia.

“Organised crime has effectively created a parallel banking system using new technologies, and the proliferation of weakly or entirely unregulated online casinos along with cryptocurrency has strengthened the criminal ecosystem in the region,” UN representatives stated.

The report’s authors attribute the interest in the stablecoin to its “fast and irreversible” transactions. Weak regulation of the cryptocurrency market also benefits the perpetrators.

This enables criminal groups to use USDT as an efficient method of moving funds, to the extent that some casinos have begun specialising in handling the token. Notably, a syndicate operating in Myanmar and Cambodia has placed street advertisements offering to exchange “black” tokens for cash.

In November 2023, the issuer blocked approximately 225 million USDT linked to an international criminal syndicate in Southeast Asia. The volume of frozen stablecoin funds was described as “the largest in history.”

From December 1, Tether began blocking wallets associated with the SDN list from the OFAC. The company called this “a landmark initiative to enhance security and compliance in the cryptocurrency ecosystem.”

The company also highlighted its assistance to agencies such as the Department of Justice, the USSS, and the FBI. In some cases, this involved not only combating illegal financial activities but also recovering assets for victims.