UN Says Tether Plays Major Role in Illicit Activity in East Asia; Stablecoin Issuer Hits Back

Tether said it was "disappointed" that the report had singled out its stablecoin, USDT.

AccessTimeIconJan 16, 2024 at 11:25 a.m. UTC
Updated Mar 8, 2024 at 8:00 p.m. UTC

Tether, the issuer of the world’s largest stablecoin USDT, has challenged the United Nations' (UN) report on the role of USDT in underground banking and money laundering infrastructure in East Asia and Southeast Asia.

Tether said it was “disappointed” that the report had singled out its stablecoin and ignored the role it played in helping developing economies in emerging markets, and its record of collaborating with law enforcement.

The report by the UN Office on Drugs and Crime (UNODC) said that “Online gambling platforms, and especially those that are operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether or USDT on the TRON blockchain” in the region.

Tether asked the UN to engage in collaborative dialogue and touted its “collaboration with global law enforcement including the DOJ, FBI, and the United States Secret Service (USSS).” The company blog said USSS was also recently onboarded on the Tether platform. The firm also highlighted its work with authorities, including the freezing of more than $300 million in the last few months.

The UN report does mention that Tether voluntarily froze $225 million in USDT connected to a Southeast Asia-based human trafficking and pig butchering in Nov. 2023, while saying that authorities in the region reported USDT among the most popular cryptocurrencies used by organized crime groups.

Tether’s USDT rose to an all-time high supply of nearly $90 billion in December 2023 but was critiqued by S&P Global Ratings for being worse than rivals at doing its core task: being valued at $1. Tether’s USDT is pegged to the U.S. dollar, but whether it can maintain that status or whether its reserves are safe and actual dollars has been the subject of contention.

Edited by Parikshit Mishra.


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Amitoj Singh

Amitoj Singh is a CoinDesk reporter.