Tether Challenges UN Report on USDT’s Use in Illicit Activity
Tether, a major stablecoin firm, has challenged a recent United Nations (UN) report that implicates its stablecoin, USDT, in illicit activities. The report, issued by Southeast Asia and the Pacific division of the UN Office for Drugs and Crime (UNODC), is titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat.”
The UNODC report alleges that USDT, particularly on the Tron blockchain, has become a preferred choice for regional cyber fraud operations and money launderers due to its stability, ease, anonymity, and low transaction fees. The report also highlights the use of USDT in underground romantic scams known as “pig butchering”.
In response, Tether issued a statement on January 15, 2024, challenging the UN’s study. The firm emphasized that the agency’s analysis has “ignored the traceability” of USDT and disregarded its proven record of collaborating with law enforcement worldwide. Tether asserts that through partnerships with it, global law enforcement gains the capability to freeze illicit transactions, providing an added deterrent against the misuse of cryptocurrencies.
Tether expressed disappointment in the UN’s assessment, stating that it singles out USDT’s involvement in illicit activity while ignoring its role in helping developing economies in emerging markets. The firm also highlighted that the tracking of Tether tokens through collaboration with global law enforcement ensures “unparalleled monitoring, surpassing traditional banking systems”.
The UN report comes amid increasing scrutiny of Tether from authorities around the world. In China, the world’s second-largest economy where cryptocurrency trades are banned, the Supreme People’s Procuratorate, the nation’s highest prosecutorial authority, has warned the public against the use of USDT. In the U.S., lawmakers introduced a bill in November that would essentially prohibit government officials from iFinex.
Despite these challenges, Tether continues to grow. Over the course of 2023, Tether saw its share of global stablecoin supply grow from 50% to 71%. As of today, USDT is the world’s largest stablecoin, with a market capitalization of $95 billion.
Tether’s CEO, Paolo Ardoino, has stated that the company will continue to collaborate with law enforcement and other parties, including the UN. In December, Ardoino announced that the company had onboarded the U.S. Secret Service and Federal Bureau of Investigation onto its platform.
The United Nations (UN) report implicating Tether’s stablecoin, USDT, in illicit activities, could have significant implications for Tether’s reputation. The report alleges that USDT is being used for money laundering and scams, particularly in Southeast Asia. This could potentially damage Tether’s image as a reliable and secure stablecoin and may raise concerns among users and potential investors about the safety and legality of using USDT.
The UN report and Tether’s response highlight the ongoing debate about the role of cryptocurrencies in illicit activities and the need for robust regulations. As this debate continues, the role of stablecoins like USDT in the global financial system is likely to remain under scrutiny.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information