Tether, the company behind the prominent stablecoin USDT, has issued a strong response to a recent United Nations (UN) report that linked the digital currency to illegal activities.
The United Nations report, delivered by Southeast Asia and the Pacific division of the UN Office for Drugs and Crime (UNODC) on January 15th, focused on cryptocurrency usage in underground banking and other illicit activities, specifically naming USDT as a key instrument for money laundering in East and Southeast Asia.
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According to the UNODC report, the rising popularity of USDT, particularly on the Tron blockchain, has made it a favored choice for cybercriminal operations and money launderers due to its stable value and anonymity, efficiency, and low cost of its transactions.
In a rebuttal on the same day, Tether contested the conclusions of the UN study, arguing that the report failed to consider the traceability of USDT transactions and overlooked Tether's established track record of cooperating with global law enforcement agencies.
Tether pointed out that the report should have also addressed how centralized stablecoins like USDT can aid in combating financial crimes. The company reiterated its dedication to engaging in such efforts, citing instances where it had frozen over $300 million in USDT tied to illegal activities, including a significant freeze in November 2023 related to a US probe into a human trafficking ring in Southeast Asia.
Moreover, Tether highlighted its collaborative efforts with law enforcement for tracking USDT tokens, asserting that this partnership results in more effective monitoring than traditional banking systems, which have historically been channels for large-scale money laundering.
Tether called for increased cooperation and understanding of blockchain technology among the global community and the UN to better combat financial crimes.
Tether's rebuttal to the UNODC report highlights a critical discourse in the cryptocurrency sector, emphasizing the need for nuanced understanding and regulation of digital currencies. It underscores the delicate balance between fostering innovation and ensuring financial security in the evolving landscape of global finance.
