The stablecoin tether has emerged as one of the preferred payment methods for money launderers and fraudsters operating out of Southeast Asia, the findings of a new United Nations study have shown. According to Jeremy Douglas, criminals are choosing to use tether because they know that “cryptocurrency regulations are way behind [the illicit activity].”
Underground Tether Money Laundering Teams
According to a study conducted by the United Nations Office on Drugs and Crime (UNDOC), the stablecoin tether or USDT has emerged as one of the payment methods often chosen by money launderers and fraudsters operating in Southeast Asia. In addition, the stablecoin was found to be at the heart of the so-called pig butchering scams.
Online gambling platforms, many of which are unregulated, have turned out to be the most preferred vehicles for money launderers using tether, the study findings have reportedly shown. The latest findings come at a time when law enforcement agencies and global intelligence organizations are seeing the increased usage of complex and quick underground tether money laundering teams.
Jeremy Douglas, UNDOC’s regional representative for Southeast and the Pacific, is quoted in a Financial Times report lamenting how criminals have seemingly succeeded in establishing a parallel banking system.
“Organized crime has effectively created a parallel banking system using new technologies, and the proliferation of loosely or entirely unregulated online casinos together with crypto has supercharged the region’s criminal ecosystem,” Douglas reportedly said.
Crypto Regulations Fall Short
Despite these alarming findings, the UNDOC report still acknowledges the efforts taken by the stablecoin issuer to stop criminals from accessing stolen funds. Tether’s freezing of $250 million worth of tokens in November 2023 is one example that demonstrates the stablecoin issuer’s commitment. As reported by Bitcoin.com News, this asset freeze is the stablecoin issuer’s largest to date.
As per a Financial Times report, global law enforcement agencies have also been successful in their ongoing efforts against money launderers who use USDT. One of these successes was Singapore authorities’ recovery of cash and crypto worth over $730 million in August last year.
Despite these successes, the UNDOC regional representative still linked law enforcement agencies’ general inability to regulate or stem the use of stablecoins in criminal activity to a lack of regulations. He said:
“Cryptocurrency regulations are way behind [the illicit activity] or practically non-existent, and organized crime groups who use and feed off vulnerabilities and weaknesses know this.”
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