Controversy Unveiled: Tether's Alleged Involvement in Illicit Activities in East Asia Sparks Heated Response from Stablecoin Issuer
Tether, the entity behind the world's largest stablecoin, USDT, has expressed dissatisfaction with the recent report from the United Nations (UN), challenging the findings that link USDT to underground banking and money laundering activities in East Asia and Southeast Asia.
In response to the report issued by the UN Office on Drugs and Crime (UNODC), Tether conveyed its disappointment at the specific targeting of USDT. The company argued that the report overlooked the positive role played by USDT in supporting developing economies within emerging markets. Additionally, Tether highlighted its history of collaboration with law enforcement agencies, which the report failed to acknowledge.
The UNODC report raised concerns about online gambling platforms, particularly those operating illegally, being utilized as prominent channels for cryptocurrency-based money laundering. The focus of the report was on Tether and USDT on the TRON blockchain within the specified regions.
Tether has called for a collaborative dialogue with the UN, underscoring its active involvement with global law enforcement entities, including the Department of Justice (DOJ), Federal Bureau of Investigation (FBI), and the United States Secret Service (USSS). The company proudly noted the recent inclusion of USSS on the Tether platform and highlighted its cooperation with authorities, leading to the freezing of over $300 million in the past months.
While the UN report did recognize Tether's voluntary freeze of $225 million in USDT linked to a Southeast Asia-based human trafficking and pig butchering operation in November 2023, it also pointed out that regional authorities identified USDT as one of the preferred cryptocurrencies used by organized crime groups.
As on December 2023, Tether's USDT reached a record supply of nearly $90 billion. However, the stablecoin faced criticism from S&P Global Ratings, questioning its effectiveness compared to competitors in maintaining a value of $1. Tether's USDT is pegged to the U.S. dollar, but concerns persist about its ability to uphold this peg and whether its reserves genuinely consist of secure and actual dollars, sparking ongoing debates within the cryptocurrency community.