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UNODC Report Highlights USDT’s Role in Money Laundering and Cyberfraud in Southeast Asia

UNODC Report Highlights USDT’s Role in Money Laundering and Cyberfraud in Southeast Asia

Cyber Security

UNODC Report Highlights USDT’s Role in Money Laundering and Cyberfraud in Southeast Asia

In a significant revelation, the United Nations Office of Drugs and Crime (UNODC) has released a comprehensive report detailing how USDT, a stablecoin issued by Tether, has become a key facilitator of money laundering and various scams in Southeast Asia. The report, titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat,” sheds light on the growing use of illegal online gambling platforms for cryptocurrency-based money laundering activities, with USDT being the preferred medium.

Key Findings of the Report

  • Online Gambling as a Laundering Vehicle: Illegal online gambling platforms have emerged as popular venues for cryptocurrency-based money laundering. These platforms, particularly those using USDT on the TRON blockchain, are significantly contributing to the growth of Southeast Asia’s illicit digital economy, including the region’s expanding cyberfraud industry.
  • Laundering Mechanisms: The report describes a method where funds are transferred to online gambling platforms or affiliate agents involved in money laundering networks. The laundered funds are then converted into in-game points, cashed out, or used in bets, often in collusion with affiliates, to legalize them and integrate them into the formal economy.

TRM Labs’ Insights on TRON and USDT Usage

  • Rising Use in Illicit Activities: According to TRM Labs’ Illicit Crypto Ecosystem Report, there has been a marked increase in the use of the Tron blockchain by terrorist groups and other illicit actors, with some exclusively using it. Data shows a 240% increase in USDT use among terrorist financing entities in 2022, compared to a 78% increase in BTC usage. Trends from 2023 and into 2024 indicate a continuing rise in this pattern.

Cryptocurrency in the Context of Traditional Money Laundering

  • A Piece of a Larger Puzzle: The UNODC report emphasizes that cryptocurrency laundering is part of a broader money laundering landscape. Organized crime groups have long used casinos for money laundering, a practice depicted in popular culture through films like “The Godfather” and podcasts like “Lazarus Heist.” The report highlights how criminal entities, both historical and modern, utilize casinos as a means to legitimize their illicit earnings.

Implications and Global Impact The UNODC’s findings present a pressing challenge to law enforcement agencies, regulatory bodies, and the global financial community. As cryptocurrency becomes increasingly intertwined with traditional money laundering methods, the need for robust regulatory frameworks and international cooperation to combat these illicit activities becomes more urgent. The report serves as a crucial wake-up call, drawing attention to the sophisticated methods employed by criminal organizations and the evolving landscape of global financial crime.

unodc.org/roseap/uploads/documents/Publications/2024/Casino_Underground_Banking_Report_2024.pdf

UNODC Report Highlights USDT’s Role in Money Laundering and Cyberfraud in Southeast Asia