The United Nations has highlighted Tether stablecoin's increasing use in money laundering and scams across Southeast Asia.

According to the Financial Times, the UN report identifies online gambling platforms, particularly those operating illicitly, as major conduits for cryptocurrency-based money laundering, with Tether being a preferred choice.

Facilitating Fraud

The report points out that Tether has been extensively utilized in underground fraud schemes, including the notorious "pig butchering" romantic scams.

Tether's involvement in combating such activities was acknowledged in November when it assisted the U.S. Department of Justice in freezing approximately $225 million in USDT linked to an international human trafficking group responsible for a pig-butchering scam in Southeast Asia.

Law enforcement efforts have successfully disrupted various money laundering networks dealing with illicit Tether funds.

In August 2023, Singaporean authorities successfully dismantled one such network, recovering approximately $735 million in both cash and cryptocurrency.

Stopping Criminal Activity

Despite these problems, Tether appears committed to employing transparency and security through regular audits of its accounts.

In a recent move in December, Tether proactively froze 41 wallets associated with individuals listed on the Office of Foreign Assets Control's (OFAC) Specially Designated Nationals (SDN) List.

Some of these wallets were found to have engaged with the coin-mixing service Tornado Cash over the past six months, and one was implicated in the $625 million Ronin Bridge attack, attributed to the Lazarus Group, a North Korean hacking organization.