Cryptocurrency, particularly Tether, is becoming a tool for organized crime in Southeast Asia, enabling money laundering and illicit revenue generation. The UN warns that Tether, a stablecoin pegged to the US dollar, is central to regional fraud, including scams like pig butchering and sextortion. Criminal syndicates leverage under-regulated online gambling platforms and crypto exchanges for swift, anonymized transactions. Tether’s appeal lies in its tie to the US dollar, minimizing volatility risks associated with other cryptocurrencies, and it is often chosen for its lower transaction fees and perceived traceability challenges on the Tron blockchain.
The UN report points out that organized crime, traditionally using black market casinos for money laundering, has adapted to the technology-driven revolution in underground banking. The rise of under-regulated online gambling platforms has opened new opportunities for criminals to execute fast, anonymized transactions and commingle funds. Tether plays a central role in pig butchering scams worldwide, favored by fraudsters for its stability and lower volatility compared to other cryptocurrencies like Bitcoin and Ethereum. The cryptocurrency’s association with the Tron blockchain is believed to make transactions harder to trace, facilitating money movement for cybercriminals.
In response to the UN report, Tether expressed disappointment and emphasized its role in supporting developing economies. Tether claims collaboration with law enforcement, highlighting its efforts in freezing over $300 million in the last few months. However, the UN report cites law enforcement operations that dismantled money laundering networks involving illicit Tether funds. The challenges posed by Tether in terms of traceability, coupled with its adoption by cybercriminals, underscore the evolving landscape of financial crime in Southeast Asia and the need for regulatory scrutiny in the cryptocurrency space.
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