A recent report from the United Nations Office on Drugs and Crime has spotlighted Tether, one of the world’s largest stablecoins, as a key tool employed by money launderers and fraudsters operating in Southeast Asia.
Released on Monday, the UN report raises concerns about the growing use of Tether’s stablecoin, USDT, for illicit activities, drawing attention from law enforcement and financial intelligence authorities.
The report reveals an alarming increase in scams associated with Tether, including schemes that manipulate false romantic connections to build trust with victims before persuading them to transfer significant sums—a tactic known as “pig butchering,” as reported by the Financial Times.
The report points to a rapid rise in sophisticated, high-speed money laundering teams specializing in using Tether for underground transactions. The evolution of cryptocurrency and other technological advancements has enabled organized crime gangs in Southeast Asia to exploit black market casinos for laundering illicit funds.
Online gambling platforms, especially those operating illegally, have become favored avenues for cryptocurrency-based money launderers, with USDT being a preferred choice.
Jeremy Douglas from the UN’s Office on Drugs and Crime commented on the situation, noting, “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.”
The report highlights recent efforts by authorities to dismantle money laundering networks associated with Tether. One successful operation by Singaporean authorities recovered $737 million in cash and crypto in August of the previous year.
Despite regulatory scrutiny and enforcement crackdowns in various jurisdictions, criminal groups persist in utilizing Tether as a preferred method for moving funds. Some casinos have specialized in handling stablecoin transactions, emphasizing the cryptocurrency’s role in illicit financial activities.
