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Chainalysis, Crypto Scam, Myanmar, News, Tether

A joint investigation by Chainalysis, a crypto analytics firm, and International Justice Mission (IJM), an anti-slavery group, has uncovered a disturbing crypto scam operating out of Myanmar. The investigation alleges that a single company in Myanmar raked in a staggering $100 million over two years through a scheme known as “pig butchering,” the Financial Times reported. This revelation has reignited concerns over the use of Tether tokens, a major cryptocurrency platform, in facilitating illicit activities.

Tether Tokens Used In Crypto Scam The scam involves building trust with victims online, often through romantic relationships, before manipulating them into investing in fraudulent schemes. According to the investigation, payments for these scams were made using Tether tokens, one of the largest global cryptocurrency platforms. These payments were reportedly sent to a company located at a known human trafficking compound called KK Park in eastern Myanmar.

The probe highlights the potential for Tether tokens to be misused for criminal activities. Tether, which manages nearly $100 billion in assets, has previously faced scrutiny for its lack of transparency regarding its reserves backing its tokens. This latest revelation adds fuel to the fire, raising concerns about the platform’s ability to prevent its tokens from being used for illicit purposes.

Bitcoin is currently trading at $51.322. Chart: TradingView.com Tether Under Pressure To Address Illicit Use The findings of the investigation are expected to intensify pressure on Tether to implement stricter measures to prevent its platform from being exploited by criminals. Last month, the UN’s Office on Drugs and Crime warned that Tether had become a popular payment system used by money launderers and fraudsters in Southeast Asia.

Eric Heintz, a global analyst at IJM, stated that the scams based on blockchain have been widely acknowledged for quite some time. However, it’s the initial instance where they have successfully linked it to a particular location and a recognized compound.

Tether, in response to the allegations, stated that it was collaborating with global regulatory authorities and had frozen $276 million used in “pig butchering”-related scams. However, experts remain cautious, emphasizing the need for independent verification of Tether’s actions and advocating for stricter regulations across the cryptocurrency industry.

The Broader Concerns Of Crypto And Black Markets The investigation also highlights a broader concern regarding the use of cryptocurrencies in facilitating black market activities. The report mentions a single Chinese company accumulating over $100 million in cryptocurrency, potentially showcasing the potential for malicious actors to exploit the anonymity and rapid transaction nature of cryptocurrencies for illegal activities.

Furthermore, the investigation points to the human cost associated with these scams. IJM noted that KK Park, near the Thailand-Myanmar border, housed possibly thousands of enslaved laborers, potentially forced into online scamming to facilitate the fraudulent scheme.

Featured image from Pexels, chart from TradingView

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Christian Encila Christian, a journalist and editor with leadership roles in Philippine and Canadian media, is fueled by his love for writing and cryptocurrency. Off-screen, he’s a cook and cinephile who’s constantly intrigued by the size of the universe.

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