Tether has become the coin of choice for money laundering and fraud operations across East and Southeast Asia, the United Nations Office on Drugs and Crime (UNODC) warned in a report on organised crime and illicit banking in the region.
The report claimed that Tether is among the most preferred cryptocurrencies used by organised crime groups, engaging in activities such as sextortion and pig butchering scams.
The report cited Tether’s stability, ease of use, anonymity and low transaction fees behind its becoming a "preferred choice" for fraudsters and money launderers.
The UN report cited data from blockchain analytics firms that indicated "less than 1%" of all cryptocurrency payments are illicit.
Tether is a form of cryptocurrency known as a stablecoin. While the value of traditional crypto assets can fluctuate wildly for little or no reason, stablecoins are pegged to other assets, notably to fiat money like the dollar, tangible assets like gold through an algorithm.
Stablecoins are considered to be a hedge against volatility in the otherwise unpredictable crypto market
"Online gambling platforms, especially those operating illegally, have emerged as the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether," the UN report said.
It said that criminals are promoting their services on various social media platforms such as Facebook, TikTok, and Telegram.
The report also highlighted instances where law enforcement agencies intervened to break up several money laundering networks engaged in the movement of unlawful Tether funds in the past few years.
In August last year, for instance, authorities in Singapore carried out an operation that resulted in the dismantling of one of these networks, leading to the retrieval of approximately $735 million in both cash and cryptocurrency.
Despite the popularity of Tether among criminals, the report mentions that less than 1 per cent of all cryptocurrency payments are illicit.
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