Topic: Tether Cryptocurrency Becoming ‘Preferred Choice’ Among Money Launderers (Read 879 times)

https://www.spglobal.com/ratings/en/research/articles/240423-your-three-minutes-in-digital-assets-new-rules-could-boost-u-s-stablecoin-adoption-13083275

"Regulatory clarity should encourage banks into the stablecoin market.  Assuming the bill is approved, and that relevant banking regulation follows, the new rules may offer banks a competitive advantage by limiting institutions without a banking license to a maximum issuance of $10 billion. The bill is unlikely to significantly affect stablecoins already regulated by the New York Department of Financial Services (NYDFS), including PayPal USD, Gemini USD, and Paxos USD, as they are well-below the $10 billion threshold and because it is otherwise broadly consistent with NYDFS guidance."

The old story continues..
https://www.bloomberg.com/news/articles/2024-03-27/tether-usdt-is-most-used-stablecoin-in-illicit-crypto-flows-trm-says
"Tether Is the Most Used Stablecoin in Illicit Crypto Flows, TRM Says
About 1.6% of Tether volume linked to illicit activity in 2023
Sanctions cut the value of criminal transactions using Tether"

https://www.msn.com/en-us/money/markets/tether-and-tron-continue-to-dominate-criminal-financing-as-overall-illicit-funding-decreases-according-to-new-trm-labs-report/ar-BB1kDcub
"Tether and Tron continue to dominate criminal financing as overall illicit funding decreases, according to new TRM Labs Report"

bbc.peпopтep, my theory on this issue is conspiracy theoretic. Sam Bankman-Fried had political connections in the USA, CZ is the main partner who helped develop the project, most likely in contact with politicians from the USA.
The official reason is clear to everyone, but the real reason in my opinion was that CZ realized that Sam Bankman-Fried was playing an even more dangerous game than Binance.

@zasad@. If CZ helped or did not help Sam Bankman Fried create FTX, this does not change the argument that CZ does not have political connections in America.

On FTX, CZ was an early investor in the exchange, however, on 2021 Sam bought back the shares and this ended their relationship. This was also when Binance was being asked many questions from different regulators around the world including the SEC.



Binance, the world’s largest crypto exchange by volume, was an early investor in crypto exchange FTX, which 29-year-old Sam Bankman-Fried founded in 2019. This week, the investment relationship suddenly ended. In an extensive interview with Decrypt, Bankman-Fried discussed why.

“We recently repurchased shares from Binance to buy them out of our cap table,” Bankman-Fried said. “I think it just makes sense given the role that our businesses are playing in the space. It can also give us more flexibility going forward.”

On Tuesday, FTX announced a $900 million raise from 60 high-profile investors including Sequoia, Paradigm, Softbank, Paul Tudor Jones, and NFL quarterback Tom Brady and supermodel Gisele Bündchen. It was the largest ever funding round for a crypto exchange, valuing FTX at a cool $18 billion.

Source https://decrypt.co/76584/ftx-ceo-sam-bankman-fried-why-bought-out-binance-investment-shares-exit



I predicted FTX to be the Binance killer, however, it appears that CZ killed FTX hehehehe.

My conspiracy theory is that CZ helped create the FTX exchange in the US. It was thanks to CZ's experience and his help that this exchange very quickly became famous in the USA.
In the United States, there is a big struggle among the political establishment before the new presidential elections, so no one needs unnecessary scandals.

@zasad@. Did what? Dump FTT on everyone's heads with mouths open to kill FTX? This is a survival tactic. CZ needed to kill FTX before it can kill Binance because Sam was beginning to use his political connections and he was also talking to regulators already.

Pay the US treasury department $4 billion?  This is a very expensive settlement with uncertain conditions. If CZ had political connections in America this would only be a slap on the wrist.

I corrected the quote, it was probably a copying error.
You say that CZ went to the USA without political connections, but why do you think he did it? Is he really relying on luck?
It’s not just American politicians who are manage peace, and before CZ’s trip to the USA, I heard that Chinese politicians had solved this problem with their American partners. (conspiracy theory)
The verdict will be handed down on April 30, and I think that the decision will be lenient.

I also heard that FTX can pay off debts, but there is a big question at what asset prices this debt will be repaid, and the case with FTX will not be closed in 1 year

Why did you change the quote from CZ to SBF? I said it was CZ who paid the American government $4 billion to settle his case, however, after settlement it does not appear to be settled hehehe. CZ's passport was confiscated and he has a sentencing to attend. This is a person who clearly does not have any political connections under the American jurisdiction.

In any case, I agree that CZ needed to dump FTT to kill FTX. If he did not do this, Sam would become more powerful and he would have certainly killed Binance using his exchange as competition and his political connections. According to the latest articles it appears that the FTX estate can pay all of the creditors in full which implies that FTX's problems were only liquidity and cashflow problems.

I don’t believe the rumors and there are a lot of victims in the SBF case, so even if he is released from prison under house arrest, he will still spend many years in the courts.
CZ is as cunning as SBF and he realized what SBF and his team were doing and decided to kill two birds with one stone.

@zasad@. I disagree. CZ had a settlement with the American government and paid $4 billion and yet he cannot get out of the country because he is a flight risk? If he had proper connections he would remain to be the CEO of Binance. Also, dumping of FTT might be CZ's tactic to kill FTX. If he did not do this, FTX would continue becoming bigger and Sam with his political connections would become more powerful.

If you also want to witness political connections in use, observe Sam Bankman Fried's case. It is being rumored that he will get out of prison within 5 or 6 months.

bbc.peпopтep, CZ turned out to be much smarter that he got rid of FTT and Sam in time.
If CZ gets off with just a fine or gets a short prison sentence in the best US prison, where he will live better than the citizens of this country, then he has the necessary connections.

@zasad@. On CZ's political connections, if he has them, they are not in America. It was Sam Bankman Fried who had the connections with the Democrats because of his donations and her mother who is rumored to be very close to Hillary Clinton.

Also, before the dump of FTT by CZ, Sam was also jeering CZ on social media because he did not any political connections in America. This was when Sam was invited in congress to speak about regulations and the cryptospace. It was also during this time when Sam was bad mouthing CZ in front of the regulators and other government officials.



The Justice Department was investigating his crypto exchange, Binance, for possible money laundering. And he suspected that Sam Bankman-Fried, the cofounder of another crypto exchange, FTX, had been spreading rumors about Binance with US regulators and the media.

“It’s just not a smart thing to do, to bad-mouth anybody. Especially a bigger competitor,” CZ told me recently.

Source https://www.vanityfair.com/news/2023/09/binance-founder-cz-says-sbfs-decision-to-bad-mouth-him-to-us-authorities-was-not-smart

bbc.peпopтep,If you look at it very pragmatically, you can steal 10 billion, but only pay a fine of 5 billion. Then you are a successful businessman. Below you will find how to use the remaining money more legally and safely.
CZ has vast invaluable experience and political connections that are very valuable.

@zasad@. Agreed! The dirty laundry also from the side of the banking system in America and how the American government only gave them a slap on the wrist. I speculate that it was only CZ that wanted to fight the case under American jurisdiction, however, his team might have expressed against this decision to save Binance and the cryptospace from another dump. This meme is real hehehehe.



A congressional investigation into the 2016 U.S. presidential election has unearthed evidence that major banks processed $2 trillion in transactions despite suspecting they were connected to illegal activity.

So-called suspicious activity reports, filed by banks with government regulators, indicate the banks were concerned the transactions would help suspected terrorists, drug dealers, corrupt foreign officials and other bad actors move trillions of dollars around the world, as well as perpetuate investment frauds. The private reports, which covered 1999 through 2017, were obtained by BuzzFeed News and shared with the nonprofit International Consortium of Investigative Journalists.

In its report, BuzzFeed said the documents show "how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats and drug kingpins."

Source https://www.cbsnews.com/news/bank-scandal-2020-2-trillion-transaction-suspected-illegal-activity-money-laundering/



Why are the people responsible not in jail like CZ? No political connections in America.

In any case, I reckon if Sam supported CZ with his political connections, CZ would not have caused the liquidity problem within FTX because of CZ's dump of all FTT in Binance's treasury.

I am only assuming that FTX's problem was only a liquidity problem because the creditors of FTX will be paid 100% of their money according to some articles.

Personally, I have no doubt that CZ violated many American laws and would have no chance of winning in court. But if you use all due process against CZ, you'll have a lot of dirty laundry to unearth, and the US government probably isn't interested. The latest major cryptocurrency cases tell us that the US government makes deals with lawbreakers if they pay huge fines.

I was only speculating and I speculate that CZ's payment in exchange for a short time in prison for some charges but no charges of being a terrorist might have been part of the deal in the settlement. Also, you tell me that I can say this easily, however, you say that the American government would easily make CZ a terrorist without due process. I reckon it would be more difficult for CZ and the government if they went to court for this.

Are you really saying this so easily or is it just me?
In my opinion, CZ has already paid a very high price and his fate has not yet been decided.
There is no point in putting CZ in jail if he paid a large fine and signed all the agreements with the US government.

It appears that we are arguing about different situations. If the American government will use everything in their playbook to make anyone a terrorist, a rapist, a thief or any type of criminal then I agree with the argument.

However, on the present situation on the case against CZ, I reckon it has been settled already. He will pay the American government $4 billion and resign as CEO. His sentence might be a few years in prison without any charges of being a terrorist. This decision has also caused the American government to stop cracking down on Binance.

I have already said that you and I think differently. You are right that in order to charge CZ it will be necessary to prove that he knew that his exchange was being used for illegal purposes.

I give a past famous example of SBF and Caroline Ellison
Look how quickly concepts are replaced, not a fraudster but a star witness

Now back to the harsh reality in which CZ and his team broke a lot of laws. So, for the prosecution, you need to find several weak links in his team, who will become a star witness instead of the accused and will not be prosecuted.
And these star witnesses will tell everything the prosecutors need, including that CZ knew that he was providing services to terrorist organizations.

@BlackBoss_. Criminals will certainly use all stablecoins with differenent amounts that will depend on liquidity. Why would they take the risk of using only one stablecoin? Unless they are stupid, they should use all the available tokens with high volume and usage to hide their activities.

These comments on criminals will use only Tether is very headshaking and this implies many people have not more strongly thought about this.

If stable coins are used for money laundering, I am sure criminals will more favorite to use Tether USD than other stable coins because it is a biggest stable coin.

Tether USD marketcap is $97B and a second biggest stable coin is USDC has only $28B in marketcap. The third biggest stable coin is DAI with only $5B in marketcap. These numbers show domination of Tether USD in stablecoin area.

https://coinmarketcap.com/view/stablecoin/

Tether like other stable coins, can be froze in your wallets.
PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets
USDT banned addresses.

@zasad@. If the information is true and if proven that CZ knows this or if he is directly involved on these occurrences on Binance then he can be sentenced for assisting terrorist groups on moving funds. However, the argument I was making is different. I am arguing more about the stablecoins being illegaly used for crime and terrorism or if an exchange CEO can be charged for terrorism if he has no knowledge of these occurrences.

Will Tether and Circle be complicit if terrorists uses USDT and USDC to move their money? Would it make the issuer of the dollar complicit if they used American dollars? Will Apple be complicit if they used iphones for terrorism?

What do you think of this argument?
This is very easily done by the wrong hands in order to get a reason to impose sanctions on any company or even country.

https://abc7chicago.com/israel-hostages-binance-crypto/14378652/
The lawsuit accused Binance of processing numerous transactions for Hamas between 2017 and 2023, "providing a clandestine financing tool that Binance deliberately hid from U.S. regulators."

@zasad@. I very much disagree that CZ and Binance can easily be declared as terrorists and can also easily be proven in court. That is a very head shaking argument.

In any case, if it was easy and if sentenced in court as terrorists, this would certainly create a very dangerous precedent on who else will easily be proven as terrorists in court. Everyone can and will easily a terrorist including car companies, mobile phone companies, banks and many other companies' products and service that were used by terrorists and drug cartels would be under investigation.

I understand the problem, I think in Russian and write in English, and over many years I have become convinced that Russian-speaking and English-speaking people have completely different logic.
Read our conversation with stompix
https://bitcointalk.org/index.php?topic=5439961.120
CZ and Binance are not terrorists, but they can easily be accused of this and this can even be proven in court.
After my last argument, our dialogue ended.

There are 2 major stablecoin issuers in the world: Circle and Tether.
Coinbase owns shares of Circle, Coinbase has very close ties to Blackrock and other large American banks and they have their own interests.
And Tether is an extra company in this market, which is not under US jurisdiction.

There is nothing personal here, this is a business where the main goal is to defeat competitors.
Tether may be accused of having links to terrorist financing. And then all its assets in the United States will be frozen or confiscated, and the stablecoin may lose its peg to the dollar. The trial will take a long time, and during this time the company will go bankrupt and lose its reputation in the market.

And it is more profitable for the US government to block more assets, so it is more profitable for them to have a larger capitalization of Tether.
Another interesting fact was told to me by an international lawyer that USDT is very popular in Russia (I fully confirm this), Asia, and Europe, and USDC is popular in the USA.
If I were the United States, I would ruin Tether, causing a big loss to competitors from other countries and adding hundreds of billions to my budget, completely legally

@zasad@. It would certainly be head scratching to call Tether terrorists because they are not terrorists. If the terrorists use American dollars, are the issuers of the dollar terrorists? If the terrorists used a certain brand of cell phone to activate their bombs, is the cell phone company a terrorist?

In any case, what are you implying on Tether's capitalization and being called a terrorist? Is the when the American government waits for a company to reach a certain size before the takedown hehehehe.

The capitalization of Tether USDT is currently about 98 billion dollars. I think it’s too early to call them terrorists.
Tether is backed by American bonds, meaning they have already given most of their money to the American economy, and for this they received an unofficial work permit. When Tether's capitalization reaches several trillion dollars, they can be called terrorists and their assets as collateral taken away.

The fud against Tether is very head shaking and it appears it is becoming very clear who might be responsible and where this is coming from. I speculate that this is coming from the American government and with the help of Tether's biggest competitor Circle hehehe. It would not be shocking if the new mayor of bitcoin is helping also.

Caroline Hill of Circle have made their position very clear when she begged the lawmakers in congress to give the treasury department the authority to crackdown on Tether.


Mayor of Bitcoin

In a February 15 Congressional hearing, Caroline Hill, Senior Director for Global Policy and Regulatory Strategy at Circle, has called on Congress to grant the Treasury Department the authority to go after Tether and its banking partner Cantor Fitzgerald. Hill said that the US Treasury Department should have the authority to take action given “Tether’s reputation” as well as available data that “they are contributing to terrorist financing and other malign activities.”

Read in full https://www.blockzeit.com/circles-caroline-hill-asks-congress-to-go-after-tether/

Any inadequate tax regime always causes a shadow market. I have cited Moscow and St. Petersburg many times as examples of the largest shadow markets in the world.
But these shadow exchanges have branches in many countries and are constantly expanding. If you close them, then many other small exchangers will open in their place, which will work much more secretly.
All information on https://www.bestchange.ru/ and https://kurs.expert/

The banking system is one of the worst systems humans have created to loot humans. What the banks advertise is the biggest fraud, they say that every bank user needs to save money and invest in the banking system while on the contrary they take that money and invest in business to make more money. They are using a user's money to earn profits and when they are asked to share the profit they only pay peanuts.

The status of banking in my country is so bad that if you keep money in your bank account you would hardly earn any interest. If you invest in any banking-based schemes the amount of interest you get is very less. That was the primary reason why the middle class in my country invested in stocks and now they are investing in crypto. The government does not like it and that is why they implemented the highest tax slab for crypto trading.

And the crisis of the banking system in the world is prompting people to assume that cryptocurrencies will occupy a certain share in the global financial market. All states print money. Cash hodlers lose 7-15% per year in countries with good economies and bank interest does not even compensate for these losses, but only slightly reduces the losses.

You are making an important point here that I also agree cryptocurrency will win when we stop exchanging it for fiat. It took a lot of years to let go of gold and adopt a paper and it will take some years for your statement to come true. It is very clear that now Monero is more acceptable than Bitcoin currently as I went for a small ride into the zone of the darknet. The sellers are the same but now most of them are asking for Monero and there are very few who are now asking for Bitcoin. Understandably the congestion and the fee are the main concerns.

Monero is more secure for anonymous payments, has lower fees and does not require mixers.
There are no big problems with exchanges either, and Ratimov made a very useful guide, which he later deleted.
https://web.archive.org/web/20231108171939/https://bitcointalk.org/index.php?topic=5461917.0
Cryptocurrency will win when there is no need to exchange coins for cash and it will be possible to pay with cryptocurrencies for goods and services.

Earlier it was mostly Bitcoin that was accepted as a mode of payment in the Darknet. With mixers getting seized and authorities focusing more on Bitcoin they started accepting Monero side by side with Bitcoin. Now, almost all darknet websites are asking for Monero as a payment method and it will go on until they face issues with Monero. I mean if you focus on the basic necessity of money laundering it was always meant for converting black money to white. Now, with cryptocurrencies and before the implementation of the tax it was easy for them, it was the best way to convert black to white. With harsh taxation policy and regulations, it is still a favorite way, but I feel they are now using DEX rather than CEX as it requires mandatory KYC.

I saw some darknet sites, and they mainly use Bitcoin and Monero. Centralized stablecoins are not as popular.
Criminal activity when money is stolen and settlements between people, which will then not be declared to the tax authorities, are different options. And the second option is more common in business relationships.

I understand and I agree to what you are saying but what about the perception. Criminals know that USDT is pegged to USD, would they dug deep to find about DAI. No, they will not as once an order of payment is set in the criminal world they rarely shift to any other mode unless, they get scrutinized by the authorities. I agree that Tether can be frozen, by the time it gets frozen as the government is involved the amount gets shifted to another wallet and gets cashed out. It is still a convenient way to operate in countries that have local exchanges as it is acceptable in most countries in their local exchanges. The point is to get USD pegged currency, convert it to local currency and utilise it for illegal activities.

DAI has huge liquidity for exchange for the most popular stablecoins USDT and USDC
https://app.uniswap.org/tokens/ethereum/0x6b175474e89094c44da98b954eedeac495271d0f
DAI is backed by a large amount of USDC
If the tokens are criminal, then a loss of 1-2% on the exchange will not be critical, because cashing out costs much more.

I agree with both of you that DAI should be preferred over USDT by those who participate in money laundering. But, the question is how is DAI pegged and how is USDT pegged? Criminals want USD and not a stable coin which is not pegged 1:1 with USDT. That can be one of the reasons why they do not go for DAI and the other issue could be converting DAI to USD as USDT is available for conversion on most P2P exchanges whereas DAI is not. Another thing that came to my mind is that these are criminals who are not interested in understanding the concept of DAI. Their perception of USDT as it was the first stablecoin is that it is backed by USD and it might be the only way these criminal organizations deal in cryptocurrency.

It is true, but if they can freeze the account due to authorities report, then if regulatory pressure increases, they will do so through administrative decisions, then reports from the local police. Tether relies primarily on its bank accounts to maintain the stability of the currency, and a single decision can threaten its existence if the authorities decide to freeze their bank accounts Or impose restrictions on treasury bonds that are used to support currency stability.

DAI has wider options in the event that pressure is imposed on it.

DAI is free from blocking, but criminals use USDT because they are aware of the complex procedures that the police must follow to get USDT blocked. And as a rule, these tokens can change several addresses, the winner will be the lucky one who sends the tokens to a centralized crypto exchange and receives a block.

It is true that Tether does not freeze an address without a report from the authorities, but they can that. If I were a person who wanted to use the money for illegal activities, I would be careful not to possess large amounts of USDT, or at least transfer it as quickly as possible before it is frozen or^[1].
In general, I do not expect Tether to take measures against regulations. As Tether works, it is easy to impose measures on it, such as forcing users to perform identity verification or forcing users to send to a specific address. These deposits cannot be accepted until after AML procedures


[1]

I think they're not aware about centralization, so they choose the popular or highest volume stable coin. Now why SEC or OFAC didn't sue USDT for being irresponsible?

It's always "Bitcoin" as the victim when it comes to anything that illegal.

They should use DAI instead.

XMR is not stable and is not pegged to the global currency which is USD that is why USDT is being used for illicit activities. Tether can freeze USDT only when authorities report it. Without any reporting, they don't freeze USDT and those criminals who are into money laundering are not some small-time thugs. They know that Tether provides greater anonymity than Fiat, has far lesser transaction fees than Fiat, and is easy to use. As the UN is the mouthpiece of five countries I am assuming money laundering using USDT has grown in those five countries. Globally USD is still a preferred way of laundering money and financing terrorism.

I wanted to say this too. If Tether is used in a crime, why aren't the coins frozen?
Tether cooperates with all law enforcement agencies

https://getblock.net/en/news/tether-has-filed-applications-with-rospatent-for-trademark-registration
"Tether has applied to the Federal Intellectual Property Service of the Russian Federation for trademark registration. The company intends to register four product names: ALLOY BY TETHER, AUSDT, TETHER ALLOY, and TETHER USDT, RBC reports with reference to the Rospatent bulletin."

That's quite surprising! USDT is a centralized cryptocurrency where the issuers have the power to block any transactions or wallets. They have done it multiple times before and they can do it again. So it's surprising to see that a centralized crypto is being used for illicit transactions. Ideally cryptos like XMR are supposed to be used for such transactions the way it happens in the black markets. Is USDT knowingly allowing such transactions to happen using their network?

I read about this few days ago, but to back that, Chainanalysis has released their own 2024 crypto crime report and it states that stablecoins are used more for illicit transactions. USDT is the most traded stablecoins and it will have the highest traded in volume, also for illicit transactions.

You can see how stablecoins are taking it from bitcoin year after the other

https://www.forbes.com/sites/roberthart/2024/01/15/tether-cryptocurrency-becoming-preferred-choice-among-money-launderers-and-scammers-un-warns/?sh=553fd7ef6385
Tether Cryptocurrency Becoming ‘Preferred Choice’ Among Money Launderers And Scammers, UN Warns
"Tether, one of the world’s most traded cryptocurrencies, has become a key tool for criminals, money launderers and scammers, according to a United Nations report published Monday, amid intensifying legal and regulatory scrutiny over how digital assets are being used to aid illicit activity."
__
A new attack on Tether has begun anew across many major news resources.