- UN report reveals Tether
’s growing popularity among money launderers and scammers.
- The ability for fast, irreversible transactions makes Tether appealing for illicit activities.
- Lack of cryptocurrency regulations is a driving factor behind Tether’s misuse, according to experts.
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A United Nations report warns of Tether’s emerging role as a go-to currency for criminal activities, highlighting the challenges posed by the lack of robust cryptocurrency regulations.
UN Report: Tether’s Growing Use in Money Laundering
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The United Nations Office on Drugs and Crime’s report indicates that Tether (USDT), a popular stablecoin, is increasingly being used by money launderers and fraudsters, especially in Southeast Asia. With its market capitalization exceeding $94 billion, Tether’s role in the expanding landscape of scams is becoming more central. The report points out Tether’s growing use in high-speed, sophisticated money laundering schemes.
Tether’s Appeal for Criminal Transactions
Criminals favor Tether due to its capability to facilitate speedy and irreversible transactions on the blockchain. Erin West, a criminal prosecutor and cybercrime expert, explains that once money is moved through Tether, it cannot be retracted, making it a preferred mechanism for illicit transfers.
The Impact of Inadequate Cryptocurrency Regulations
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Jeremy Douglas from the UN’s Office on Drugs and Crime attributes the criminal preference for Tether to the absence of comprehensive cryptocurrency regulations. He highlights how organized crime groups exploit regulatory gaps and weaknesses. The report also mentions an incident where Tether froze $225 million worth of tokens linked to a human trafficking syndicate.
Tether’s Initiatives to Combat Illicit Activities
In response to these concerns, Tether has announced initiatives to safeguard the crypto ecosystem, including a wallet-freezing policy and collaboration with U.S. authorities to mitigate illicit token use.
The UN report underscores the urgent need for stronger cryptocurrency regulations to combat the misuse of digital currencies like Tether for criminal activities. As Tether steps up its security measures, the broader crypto industry faces the challenge of balancing innovation with the imperative of preventing illegal transactions.