United Nations reports USDT used for money laundering across SE Asia
Tether (USDT) is at the heart of a “parallel banking system” created by organized crime and making use of new technologies, according to a new United Nations (UN) report.
As reported by the Financial Times, the report, published on Monday by the UN’s Office on Drugs and Crime, details how USDT has become a popular payment method for criminal gangs, particularly those in the gambling industry, operating in Southeast Asia.
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.”
USDT is also among the currencies of choice for criminals operating so-called ‘pig butchering’ or romance scams. These scams involve criminals gaining a victim’s trust, even hinting at possible future romance, before convincing them to transfer large amounts of their own money.
According to UN regional representative Jeremy Douglas, “Organised 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.”
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UN has warned about USDT before
This report is far from the first UN document to warn of USDT’s growing use in Southeast Asia’s criminal underground. In August last year, the organization detailed how hundreds of thousands of people are being trafficked by organized criminal gangs and made to carry out crypto scams and online fraud in the region.
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These online scams rely heavily on crypto, specifically USDT with gangs reportedly selling slaves in exchange for the stablecoin while scammers are told to encourage their victims to deposit the currency as it is “untraceable.”
As part of its findings, the UN called for governments in Southeast Asia to enact a human rights response and for banks and crypto exchanges to adopt a holistic approach that would see them cooperating in line with international human rights to stop traffickers from converting their illicit crypto into fiat.
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