Tether, the USDT stablecoin issuer, has gone public controversial a recent UN report highlighting the token’s alleged involvement in illegal activities, particularly in East and Southeast Asia. It states,
We are disappointed by the UN assessment that singles out the USDT, highlighting its involvement in illegal activity, while ignoring its role in supporting developing economies in emerging markets, completely neglected by the global financial world, simply because serving such communities would be unprofitable for them.
The UN report entitled “Casinos, Money Laundering, Underground Banking and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat”, in particular pointed out of USDT’s popularity in illegal online gambling platforms and its role in regional cyber fraud operations due to its stability and low transaction fees
In a staunch defense, Tether criticized the UN analysis for ignoring the traceability of USDT tokens and its history of cooperation with law enforcement agencies worldwide. The firm claims that the UN report ignores the positive impact of the USDT on developing economies in emerging markets, areas often overlooked by the global financial world due to unprofitability. Tether emphasized its commitment to cooperation in efforts to combat financial crimes, highlighting the recent freezing of over $300 million in USDT involved in illegal activities, including $225 million in November 2023 linked to a Southeast Asian human trafficking syndicate .
Tether CEO Paolo Ardoino responded to the UN assessment, saying the report did not recognize the positive impact of USDT on developing economies in emerging markets. Ardoino highlighted Tether’s cooperation with law enforcement and other stakeholders, including the United Nations. Despite the accusations, Tether claims that USDT transactions are traceable on the blockchain, making it an impractical choice for illegal activities. The company aims to allay concerns about the anonymity of USDT transactions by emphasizing the transparency and accountability enabled by blockchain technology.
The stablecoin issuer further emphasized its commitment to protecting the community by implementing security measures, including its cooperation with Chain analysis to develop tools to monitor secondary markets. Tether called on the UN to recognize these industry-leading security measures and its track record of cooperation with law enforcement.
As the UN report gained attention, concerns were raised about the potential impact on Tether’s reputation and the broader cryptocurrency market. Investors and industry participants are closely watching such developments as regulatory scrutiny continues to increase in the crypto space. Tether’s response reflects a broader industry trend in which cryptocurrency companies are actively engaging with regulators and law enforcement to address concerns about illegal activities.
In conclusion, Tether remains steadfast in its commitment to address the allegations raised in the UN report. The company’s response highlights the importance of considering USDT’s positive contribution to emerging markets and the traceability of transactions on the blockchain. As the cryptocurrency industry grapples with increasing regulatory challenges, Tether’s proactive approach to collaboration and transparency could set a precedent for responsible and accountable practices in the sector.
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