Single Chinese ‘pig-butchering’ operation made $100M in USDT, report

A single Chinese company has managed to rake in more than $100 million in USDT from so-called ‘pig-butchering’ romance scams in under two years, according to research from blockchain analytics firm Chainalysis.

As reported by the Financial Times, Chainalysis and anti-slavery group International Justice Mission (IJM) tracked massive amounts of victims’ crypto that had been deposited into just two wallets. It also traced numerous ransom payments made to a compound in Myanmar by the families of trafficked workers.

An IJM spokesperson said, “Everyone has known for a long time that these kinds of scams are blockchain-based, but this is the first time we’ve been able to tie it to a specific location and a known compound.”

Jackie Koven, head of cyber threat intelligence at Chainalysis, added, “This case is so illustrative of what’s happening, it’s just a vignette of what’s taking place on a [larger] scale.

“Once criminals realized it was traceable we thought they would stop using it, but they didn’t.”

The Myanmar-based company hasn’t been identified in order to protect its workers, however, IJM says former workers gave it details on the wallets used to receive the USDT. It also said that the compound, known as KK Park, was “likely to be home to thousands of trafficked workers,” and described it as “a self-contained city.”

Read more: Hong Kong investment manager loses $1.5M inheritance in crypto scam

UN has warned about USDT before

Last month, a United Nations (UN) report revealed that Tether and USDT are at the heart of a “parallel banking system” created by organized crime and making use of new technologies.

The report, published by the UN’s Office on Drugs and Crime, detailed how USDT has become a popular payment method for criminal gangs, particularly those in the gambling industry, operating in Southeast Asia.

Read more: UN report links crypto scams to Southeast Asia slave trade

According to the report, “Online gambling platforms, and especially those that are operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether or USDT on the TRON25 blockchain, while also fueling the intensification of Southeast Asia’s rapidly growing illicit digital economy, and particularly the regional cyberfraud industry.”

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