The UN has warned that Tether is increasingly being used by money launderers as a preferred payment method.
Tether, a well-known cryptocurrency with a token of the same name, is causing concern due to its activities in Southeast Asia, where it serves as a type of digital currency aiming to maintain an equivalent value to the US dollar.
The UN’s Office for Drugs and Crime has outlined how criminals are deceiving individuals through romance scams, leading to “pig butchering” – a term used to describe the misled and enticed victims who are promised lucrative returns before having their funds taken away, as reported by The Financial Times.
In December, law enforcement in the United States seized approximately $500,000 worth of digital currency from an account linked to a Chinese businessman.
What is the UN saying about Tether?
UN spokesman Jeremy Douglas stated, “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.”
Tether has been singled out due to its instant, irreversible form of transactions.
This was corroborated by Erin West, a California-based criminal prosecutor and cybercrime expert, who emphasized, “Tether is the mechanism of choice, it’s fast and transactions cannot be retracted. Once the money is moved, it’s moved. You can’t pull it back.”
West added, “You’re creating a situation where victims are blinded by love, coupled with the opportunity to get rich quickly. They’re being asked to buy something that they’re not familiar with, and prior to cryptocurrency there weren’t many opportunities to do that.”
Tether’s digital token, also known as Tether, is a stablecoin, a crypto asset that typically mirrors a hard currency to maintain its price. The platform allows traders to move in and out of trades as, unlike others such as Bitcoin, it is pegged to the US dollar.
Despite intensified efforts by US law enforcement to crack down on digital assets domestically and internationally, criminals are still utilizing Tether as an effective means of transferring money.
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