Key takeaways
- Tether has responded to a report by the UN that purportedly showed their stablecoin’s involvement in illegal activities.
- The UNODC released a report which discussed the use of cryptocurrency in illicit operations and underground banking.
A prominent stablecoin company, Tether, has responded to a report by the United Nations (UN) that purportedly showed their stablecoin’s involvement in illegal activities.
The UN Office for Drugs and Crime (UNODC) division for Southeast Asia and the Pacific released a report on January 15, which discussed the use of cryptocurrency in illicit operations and underground banking.
According to the research, one of the leading platforms used in the area for money laundering is the USDT stablecoin. Particularly mentioned in the study was the growing acceptance of USDT, which is based on the Tron blockchain. The UNODC study said:
“USDT on the Tron blockchain has become a preferred choice for regional cyber fraud operations and money launderers alike due to its stability and the ease, anonymity, and low fees of its transactions,”
Tether, who criticized the UN report on January 15, said that the agency’s findings “ignored the traceability” of USDT and dismissed its track record of working with law enforcement around the globe.
Tether stated that the UN needs to discuss how centralized stablecoins may strengthen efforts to combat financial crime and that the company is dedicated to working with other organizations on these issues.
Tether stated that within the previous few months, it had frozen over $300 million in USDT linked to illegal activity, including $225 million frozen in November 2023 as part of an American investigation into a human trafficking organization operating in Southeast Asia. Tether said:
“The UN’s assessment singles out USDT highlighting its involvement in illicit activity while ignoring its role in helping developing economies in emerging markets, completely neglected by the global financial world simply because servicing such communities would be unprofitable for them.”
Tether continued by stating that tracking Tether tokens in conjunction with international law enforcement guarantees unmatched oversight, outperforming conventional banking systems that have been used for decades as a means of money laundering large amounts of money.
In order to better combat financial crimes, the stablecoin company urged the UN and the international community to work together and raise knowledge of blockchain technology.
The announcement follows Tether’s announcement in mid-December 2023 that it aspires to be a world-class partner to the United States following a request from US lawmakers for the Department of Justice to take action on the criminal usage of USDT.
Financial crimes and money laundering are two key concerns associated with cryptocurrencies such as Bitcoin, according to international regulators. Nevertheless, several reports claimed that, in recent years, criminals have begun using other cryptocurrencies or fiat money like the US dollar for illegal operations.
