A detailed new report reveals the prevalence of USDT stablecoin in illegal transactions. In just three years, illegal wallets have accumulated a huge amount of funds of up to $11 billion.

Findings from blockchain analytics firm Elliptic indicate that Tether was particularly active on the Huione Guarantee platform, which provides trading services to cybercriminals and their client base.

The report mentioned that some businesses openly claimed to be able to provide money laundering services, especially for illegal proceeds obtained through so-called "pig killing" scams. In addition, some businesses offered to help process the proceeds of sextortion scams.

The so-called “pig killing” scam involves scammers building a trusting relationship to trick unsuspecting individuals into investing their entire savings into a fake, seemingly profitable cryptocurrency project.

The Huione Guarantee platform provides a service that allows scammers to hire people to create dedicated websites for their scam activities and use "AI face-changing" software to communicate with their prey to enhance persuasiveness.

Billions of dollars have been lost to these scams. However, what is often overlooked is that the people carrying out these crimes may actually be victims themselves. They are lured to Southeast Asian countries such as Cambodia and Myanmar in the hope of finding high-paying jobs, only to end up imprisoned and have their passports confiscated.

Even more chilling is that Huione Guarantee also sells goods used to abuse workers, including electric shock shackles and batons. Elliptic's investigation warned that some people who were forced to work chose to commit suicide in despair, and some lost their lives under suspicious circumstances.

Illegal market players proliferate

Elliptic's report states that there is ample evidence that the Huione Guarantee platform actually acts as an illegal trading market. Even more disturbing is that the platform appears to be linked to a large Cambodian conglomerate with interests in a wide range of areas, from aviation to real estate, and one of the group's executives has close ties to the Cambodian prime minister.

Although Tether’s use in illegal transactions is worrisome, Elliptic points out that one advantage of crypto payments is the transparency of blockchain technology. This allows regulators to monitor and freeze USDT’s fund flows, depriving scammers of their source of income.

It is reported that Elliptic has used its tools to mark hundreds of cryptocurrency addresses controlled by Huione, as well as addresses used by merchants operating on the Huione Guarantee platform, providing important clues for combating these illegal activities.

Tether’s role in criminal activity

Although cryptocurrencies are banned in China, there is growing evidence that Tether (USDT) is being used by criminals in China to support domestic criminal activities. In May this year, the police successfully dismantled a large underground gang that was suspected of helping individuals bypass foreign exchange controls and illegally transfer funds overseas, involving an amount of up to $1.9 billion.

The United Nations also disclosed this issue in January this year, when it alleged that Tether (USDT) has become the preferred tool for online fraud and money laundering activities on the TRON blockchain led by Justin Sun due to its stability, ease of operation, anonymity and low transaction costs.

At the same time, the illegal use of Tether has even extended to kidnapping and extortion cases. For example, in a kidnapping case in Hong Kong, the kidnappers demanded $640,000 worth of Tether as ransom. Although the kidnappers were eventually arrested, such incidents highlight the convenience of Tether in illegal transactions.

TRM Labs' latest report further pointed out that Tether's use in illegal transactions far exceeds that of other stablecoins, with about 1.63% of Tether transactions related to criminal activities, while the relevant proportion of USDC is only 0.05%. In addition, Tether's use in terrorist financing activities is also increasing, especially on the TRON blockchain.

In response to these allegations, a Tether spokesperson said that the figures for illegal transactions are often exaggerated due to a misunderstanding of the data. They believe that even if only a small portion of the funds in the service are illegal, it does not mean that the funds in the entire service are illegal. This view exaggerates the actual scale of Tether's use in illegal transactions. #Tether #稳定币 #非法交易 #Elliptic

Conclusion:

Tether (USDT) is increasingly used in illegal transactions, and its use in criminal activities, from online fraud to kidnapping and extortion, is on the rise. The report by Elliptic and TRM Labs reveals this phenomenon and highlights the potential of blockchain technology in regulating and combating crime. Although Tether has defended the scale of illegal transactions, the transparency of cryptocurrencies makes it possible to track illegal funds, and regulators need smarter technology and stricter laws to meet this challenge.

In the face of Tether's use in terrorist financing and other serious crimes, we must rethink the regulatory framework for cryptocurrencies. This is not only a technical issue, but also a social issue that requires international cooperation and innovative regulatory strategies to balance privacy protection and fighting crime. Technology itself is neutral, but the way it is used has a profound impact on society, and we have a responsibility to ensure that its development meets ethical and legal standards, protects everyone's interests, and maintains social security.