Tether has countered a United Nations (UN) report that highlighted the alleged use of its USDT stablecoin in illicit activities in East and Southeast Asia.
The report by the UN Office on Drugs and Crime (UNODC) titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat,” identified USDT, particularly on the Tron blockchain, as a primary vehicle for money laundering in the region.
In response, Tether challenged the UNODC’s findings, highlighting the traceability of USDT and its history of cooperation with law enforcement globally. Tether criticized the report for overlooking the stablecoin’s role in supporting developing economies and argued for the recognition of how centralized stablecoins could bolster anti-financial crime efforts.
Tether also shed light on its proactive measures in combating illicit use of its token, mentioning that it had frozen over $300 million in USDT linked to illegal activities in recent months. This included $225 million frozen in November 2023 as part of a U.S. investigation into a Southeast Asian human trafficking syndicate. The company asserted that tracking Tether tokens through collaboration with law enforcement ensures superior monitoring capabilities compared to traditional banking systems, which have historically been used for money laundering activities.
In addition to addressing the UNODC report, Tether received a vote of confidence regarding its financial stability from Howard Lutnick, CEO, and majority owner of Cantor Fitzgerald. In an interview with Bloomberg Television at the World Economic Forum in Davos, Lutnick confirmed that Tether has the funds it claims, based on his firm’s role as a custodian for Tether’s assets. He stated, “From what we’ve seen, and we did a lot of work, they have the money.”
This statement was in reference to Tether’s attestation report published in October, which declared about $86 billion worth of assets to back $83 billion worth of its USDT stablecoin. Lutnick’s remarks are important as Cantor Fitzgerald has been serving as a Tether custodian since late 2021.
Tether’s CEO Paolo Ardoino welcomed Lutnick’s comments, which come amid prolonged speculation and scrutiny over reserves, including allegations in the past that it lacked one-to-one backing for USDT.
In 2021, Tether settled with the New York Attorney General and paid $18.5 million in penalties, addressing claims that for a period in 2017, USDT stablecoins were not backed ‘1-to-1’ by USD in a bank account.
