Tether, the issuer of the USDT stablecoin, has publicly disputed a recent United Nations report that highlighted the token’s alleged involvement in illicit activities, particularly in East and Southeast Asia. It states,
We are disappointed in the UN’s assessment that singles out USDT highlighting its involvement in illicit activity while ignoring its role in helping developing economies in emerging markets, completely neglected by the global financial world simply because servicing such communities would be unprofitable for them.
The UN report, titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat,” specifically pointed to USDT’s popularity on illegal online gambling platforms and its role in regional cyber fraud operations, due to its stability and low transaction fees.
In a robust defense, Tether criticized the UN’s analysis for ignoring the traceability of USDT tokens and its history of collaboration with law enforcement globally. The firm argued that the UN report neglected the positive impact of USDT on developing economies in emerging markets, areas often overlooked by the global financial world due to unprofitability. Tether emphasized its commitment to collaboration on anti-financial crime efforts, highlighting the recent freezing of over $300 million in USDT involved in illicit activities, including $225 million in November 2023 linked to a Southeast Asian human trafficking syndicate.
Tether’s CEO Paolo Ardoino responded to the UN’s assessment, stating that the report failed to acknowledge the positive impact of USDT on developing economies in emerging markets. Ardoino emphasized Tether’s collaboration with law enforcement agencies and other stakeholders, including the UN. Despite the allegations, Tether asserted that USDT transactions are traceable on the blockchain, making it an impractical choice for illicit activities. The company aims to dispel concerns about the anonymity of USDT transactions by highlighting the transparency and accountability enabled by blockchain technology.
The stablecoin issuer further emphasized its dedication to community protection by implementing security measures, including its collaboration with Chainalysis to develop tools for monitoring secondary markets. Tether urged the UN to acknowledge these industry-leading security measures and its track record of collaboration 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 closely monitor such developments, as regulatory scrutiny continues to increase in the crypto space. Tether’s response reflects a broader industry trend where cryptocurrency companies are actively engaging with regulators and law enforcement agencies to address concerns related to illicit activities.
In conclusion, Tether remains steadfast in its commitment to addressing the allegations raised by the UN report. The company’s response emphasizes the importance of considering the positive contributions of USDT to emerging markets and the traceability of transactions on the blockchain. As the cryptocurrency industry navigates increasing regulatory challenges, Tether’s proactive approach towards collaboration and transparency may set a precedent for responsible and accountable practices within the sector.
Image source: Shutterstock