Tether's USDT Stablecoin Linked to Multiple Financial Crimes
Tether's USDT stablecoin has become one of the most widely used types of cryptocurrency in illicit finance. The company claims to do thorough due diligence on its primary customers, but a set of documents obtained by ICIJ suggests otherwise.
The documents show who was buying USDT tokens from Tether during 2019 and 2020, a key period of growth for the company. Among them were some possibly concerning clients, including hundreds of millions of dollars in purchases by shell companies based in various tax havens.
The records also list several actors later revealed to be involved with financial crimes who together bought tens of millions of tokens directly from Tether. This includes firms named as laundering vehicles for North Korean hackers and the Sinaloa Cartel, which smuggles vast amounts of heroin and fentanyl into the United States.
Tether sold tokens to these customers years before their alleged crimes came to light publicly, raising questions about how closely Tether scrutinized the buyers. Experts say thorough customer vetting aims to understand customers' sources of wealth and the nature of their business in order to detect fishy activity.