Tether and Tron Responded to the UN Critique

A recent study from the United Nations Office on Drugs and Crime (UNODC) asserts a correlation between cryptocurrency and criminal activity in some parts of Asia. Today, we will examine the UNODC's claims, look into the responses from major crypto entities like Tether and Tron, and assess the validity of the organization's allegations. 

The UNOCD report

On January 15, 2024, the UN’s organ dealing with international crime, UNODC, published a report which contends that illegal casinos and the crypto sphere have evolved into integral elements of the clandestine money laundering network in Asia. 

The organization suggests a link between the popularity of illegal online casinos, e-junkets, as well as cryptocurrency exchanges, which are all contributing to the increase in international crime. 

UNODC contends that the increase in inadequately regulated online gambling platforms and cryptocurrency exchanges has changed the landscape of underground banking. This transformation enables quicker, anonymous transactions and opens up new opportunities for organized criminal activities. The study emphasizes the rise in criminal activities in Southeast Asia, accelerated by the adoption of scalable, digitized solutions in the casino and cryptocurrency sectors.

The report highlighted the suspected involvement of the stablecoin USDT in the expansion of illicit activities within the region. According to UNODC, this cryptocurrency is actively employed in money laundering and cyberfraud. The organization argues that the digital asset's suitability for such purposes is attributed to its features of anonymity, price stability, and rapid transaction speed.

Tether’s response

In a statement made in response to the allegations made by the organization, Tether, the issuer of USDT, expressed dissatisfaction with the UN's evaluation of the coin. The company pointed out that it is unfair from the UNODC to focus on the alleged involvement of USDT in illicit activities, asserting that the positive impact of the stablecoin on regions and countries with developing economies has been overlooked. Tether further argued that global financial institutions tend to disregard these communities due to perceived unprofitability. 

Additionally, the statement underscored Tether's collaborative efforts with law enforcement agencies, e.g. the Federal Bureau of Investigation, putting emphasis on the implementation of rigorous monitoring measures that are in many ways superior to the systems that more traditional banking players have in place.

The company drew the public's attention to the fact that using public blockchains is more of a deterrent for illicit activities, because they are all recorded, which is “impractical” for criminals. As evidence of this statement, Tether made a point that they froze over $300 million in recent months because of the possible links to illegal activities. 

Despite calling out the organization, the USDT issuer finished the statement by offering a collaborative dialogue and emphasized the company’s commitment to transparency.

Tron’s response

Another official response that the UN’s report got, came from crypto company Tron, which was also briefly mentioned in the report as the blockchain frequently used for illicit  USDT transfers.

Tron unequivocally endorses the UN's stance against nefarious entities in the blockchain realm, particularly those leveraging stablecoins like Tether's USDT. However, Tron challenges the assertion that USDT transactions on TRC-20 represent a preferred choice for malicious actors, emphasizing TRC-20's distinction as the world's most widely used on-chain settlement protocol for USDT circulation. 

What is more, Tron underscores its active collaboration with on-chain forensic partners and its unwavering commitment to leading advancements in the blockchain industry. The statement emphasizes Tron's acknowledgment of its decentralized nature, clarifying that it cannot dictate the actions of independent third parties, including Tether, while wholeheartedly supporting the UN's initiatives against illicit activities within the blockchain sector.

In conclusion, while cryptocurrencies in general, and USDT in particular, do have a potential for being used for criminal activity due to their anonymous nature, we cannot blindly claim that the blockchain technology is inherently evil: it holds great significance for the economy of developing countries and unbanked populations as well as technological progress overall. In the future, the negative aspects of crypto usage can be mitigated by better systems of detecting criminal activity and cooperation with the authorities (as exemplified by Tether), and not putting blame on the entire sphere.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.