Report Highlights USDT’s Role in the Underground Economy of Cambodia

A recent report from the South China Morning Post (SCMP) explains the enabling role that Tether’s USDT has on the underground Chinese-linked economy of Cambodia. The stablecoin is allegedly used in different activities like sidestepping capital controls for Chinese nationals, who can use it as an exchange device to acquire tools to facilitate online scams.

Tether’s USDT Present In Shadow Economy of Cambodia

A recent article published by the South China Morning Post (SCMP) has revealed the role that USDT, the largest dollar-pegged stablecoin in the cryptocurrency market, plays in enabling underground activities in Cambodia. According to SCMP, the cryptocurrency is widely available in exchanges targeting the Chinese expat community that lives in Cambodia.

Huione Pay, a Cambodia-approved financial platform, hosts a series of Telegram groups providing exchange services for cryptocurrency assets, including USDT. According to SCMP’s investigation, some of these groups offer tools to facilitate scam operations involving international SIM cards and data on Chinese citizens overseas.

Also, the report detected operators advertising bank cards that can be used to receive money from scam victims, criminal background checks, company records, and bank statements. The operators allegedly accept USDT for these services. Cambodia has banned cryptocurrency since 2017.

Jeremy Douglas, the United Nations Office on Drugs and Crime’s regional representative, explained that using cryptocurrency has overwhelmed local authorities that have been unable to keep up with the tech.

He stressed:

The capacity of criminal groups running online gaming, scams, money-laundering operations and underground banks is far more advanced than most enforcement agencies in Southeast Asia.

Tether has recently stepped up its compliance efforts, cooperating with the U.S. by proactively freezing all funds in addresses part of the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons list (SDN List). Also, the company revealed the extent of its collaboration with U.S. government agencies, stating it had “onboarded” the U.S. Secret Service on its platform and was in the process of doing the same with the Federal Bureau of Investigation (FBI).

What do you think about Tether’s alleged role in the Cambodian shadow economy? Tell us in the comments section below.

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