How Indian Scammers Use Tether’s USDT to Funnel Funds Abroad
Indian scammers use Tether’s USDT to launder funds outside the country, raising serious concerns about financial crimes facilitated by stablecoins. Recent reports from Rajasthan, India, shed light on cybercriminal networks that have exploited USDT, a popular stablecoin, to transfer illicit funds internationally. Law enforcement officials in Rajasthan recently arrested multiple money mules who converted over INR 1 crore (approximately $115,546) into Tether (USDT). These funds, sourced from digital scams like “digital arrest” frauds, were then funneled to exchanges in Dubai and France, where masterminds behind these schemes are suspected to operate.
The scammers’ modus operandi involves acquiring bank accounts, ATM cards, mobile phones, and SIM cards from locals. Using these resources, they deposit fraudulent earnings into cryptocurrency, enabling a seamless transfer of funds across borders. During recent arrests, law enforcement recovered key evidence, including mobile phones and SIM cards tied to crypto laundering activities.
This is not the first time Indian scammers have exploited Tether’s USDT to launder funds outside the country. Earlier reports revealed a similar operation where 15 suspects were arrested for leveraging USDT to facilitate illegal financial transactions. USDT, known for its stability and pseudo-anonymity, has become a preferred tool for cybercriminals worldwide, often used to circumvent international regulations and sanctions.
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Tether, the issuer of USDT, has been under scrutiny for its role in enabling such activities. In response to criticism, the company has taken significant steps to address these concerns. In May 2024, Tether collaborated with Chainalysis to launch a transaction monitoring platform aimed at identifying suspicious transactions and tracking secondary market activity. Later, in September, Tether partnered with Tron and TRM Labs to establish the T3 Financial Crime Unit. This initiative focuses on monitoring illegal activities involving USDT on the Tron network, demonstrating Tether’s commitment to combating financial crimes.
The increasing use of USDT for illicit purposes highlights the urgent need for stricter regulatory frameworks and enhanced monitoring mechanisms. Authorities must work collaboratively with blockchain companies to ensure transparency and security in the crypto space. For India, combating the misuse of cryptocurrencies like Tether’s USDT is essential to maintaining financial integrity and preventing cybercrime networks from flourishing.
While cryptocurrencies like USDT offer many legitimate applications, their misuse for laundering funds poses a significant threat. The collaborative efforts between law enforcement, blockchain companies, and financial institutions are pivotal in curbing these activities and ensuring that digital assets contribute positively to the global financial ecosystem.
