Major stablecoin firm Tether has responded to the United Nations’ report highlighting the alleged involvement of the Tether stablecoin (USDT) in illicit activity.
The Southeast Asia and the Pacific division of the UN Office for Drugs and Crime (UNODC) on Jan. 15 issued a report devoted to issues of the use of cryptocurrencies in illegal activities and underground banking.
Titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat,” the report referred to the USDT stablecoin as one of major vehicles for money laundering in the region. The report specifically referred to the rising popularity of USDT based on the Tron blockchain.
“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,” the UNODC report stated.
Tether Challenges UN Report and Calls for Blockchain Education
Read more ⬇️https://t.co/RM474wIiqo
— Tether (@Tether_to) January 15, 2024
Challenging the UN’s study on Jan. 15, Tether emphasized that the agency’s analysis has “ignored the traceability” of USDT as well as disregarded its proven record of collaborating with law enforcement worldwide. “The UN should also discuss how centralized stablecoins can improve anti-financial crime efforts,” Tether said, adding that the firm is committed to collaboration on such matters.
Tether mentioned that it froze more than $300 million in USDT involved in illicit activities over the past few months, including $225 million frozen in November 2023 as part of a United States investigation into a Southeast Asian human trafficking syndicate. Tether stated:
“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 went on to say that the tracking Tether tokens through collaboration with global law enforcement ensures “unparalleled monitoring, surpassing traditional banking systems that for decades have been the vessel for laundering substantial sums.” The stablecoin firm called on the global community and the UN to cooperate and expand awareness of the blockchain technology in order to better respond to financial crimes.
The news comes shortly after Tether declared that it wants to be a “world class partner to the U.S.” in mid-December 2023 after U.S. lawmakers requested for the Department of Justice action over illicit use of USDT.
Financial crimes and money laundering issues have long been seen by global regulators as a major issue of cryptocurrencies like Bitcoin (BTC). However, some reports suggested that criminals have been opting for fiat currencies like the U.S. dollar or other cryptocurrencies for illicit transactions in the past few years.