Tether: The World's Most Traded Cryptocurrency Is Also a Top Choice for Criminals

These are interesting times for Tether. The world's most traded cryptocurrency has also become the top choice of international criminals and others looking to make cross-border transactions out of sight of the mainstream global financial system.

As the world's most traded cryptocurrency, Tether (USDT) has become the go-to choice for criminals looking to make cross-border transactions under the radar of the mainstream global financial system.

This preference by bad actors is largely due to the relative anonymity of Tether transactions, especially when compared to Bitcoin and other cryptocurrencies. While most crypto transactions are recorded on public blockchains and can be traced back to users (given enough resources and expertise), Tether transactions typically take place on exchanges or platforms with less stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance. This creates opportunities for illicit transactions to slip through the cracks.

According to a UN report from January 2024, USDT has emerged as a "preferred choice" for crime syndicates, allegedly facilitating some $17 billion in illegal trades. Drug cartels, sanctioned entities, and even terrorist organizations have reportedly used USDT to evade financial controls.

Together with a recent report by blockchain analytics firm Chainalysis, which found that criminal activity now accounts for 0.15% of all cryptocurrency transaction volume, these findings highlight the use of cryptocurrencies for both legal and illegal purposes.

However, the large majority of Tether transactions are used for legitimate applications such as facilitating cryptocurrency and token trading, providing liquidity, and offering a stable store of digital value. This activity drives Tether's rapid adoption across global markets and its integration into mainstream financial channels.

Despite its clear legitimate uses, Tether has come under increasing regulatory scrutiny. The stablecoin can also allow bad actors to move money around surreptitiously.