Reports have shown that Tether, a stablecoin worth billions of dollars, is being used for criminal activities such as pig butchering and sextortion scams. The blockchain analytics firm Elliptic revealed that over $11 billion has been sent to illicit wallets over the past three years, with Tether being the primary payment method on a platform called Huione Guarantee.
Huione Guarantee facilitates transactions for cybercriminals and their customers, offering services for money laundering and dealing with the proceeds of scams. Victims of pig butchering scams are often coerced into investing their life savings into fake crypto opportunities, leading to significant financial losses. These victims, who are often forced to work in harsh conditions, may resort to suicide or die under suspicious circumstances.
The investigation by Elliptic found that Huione Guarantee acts as an illicit marketplace, with ties to a large Cambodian firm and connections to high-ranking officials. Despite these criminal activities, the transparency of the blockchain allows for the monitoring and freezing of funds to prevent scammers from profiting.
In addition to the use of Tether in pig butchering scams, there have been instances of the stablecoin being used for criminal activities in China, where cryptocurrencies are banned. The United Nations has also highlighted the use of USDT in cyberfraud and money laundering operations.
Furthermore, Tether has been demanded as ransom by kidnappers, highlighting the darker side of its use in criminal activities. A report by TRM Labs found that Tether had the highest volume of illicit transactions compared to other stablecoins, with a significant portion linked to criminal activity.
While crypto exchanges and payment processors have taken steps to combat illicit use of Tether, it remains popular among those involved in terror financing campaigns. Despite these allegations, a Tether spokesperson emphasized that transactional figures may be exaggerated and that not all funds on a platform are illicit.
Overall, the misuse of Tether in criminal activities underscores the need for increased oversight and regulation in the digital currency space to prevent further exploitation and harm to victims. The blockchain technology offers transparency, but it also poses challenges in tracing and monitoring illicit transactions effectively. It is crucial for authorities and industry stakeholders to work together to address these issues and safeguard against criminal misuse of cryptocurrencies like Tether.