The United Nations is involved in crypto due to the rise of illegal economies in Southeast Asia
A report released by the United Nations Office on Drugs and Crime has warned that cryptocurrency is being misused in emerging illicit economies in East and Southeast Asia. As organized crime poses new complex challenges for law enforcement, crypto is becoming increasingly intertwined with the latest technological innovations, according to the report.
Poorly regulated or illegal casinos and “pork” romance scams have seen rapid growth in the Mekong region, the report said. These new economic models are more sophisticated:
“Recently, chatbots based on large-scale language modeling, advanced counterfeiting technology and automation have created sophisticated and harmful cyber fraud schemes that pose a major threat to individuals and the conventional banking industry.
Another tactic used by criminals is to locate illegal gambling and fraud operations in unregulated special economic zones and areas controlled by independent armed groups. A unique travel industry has sprung up around casinos. So-called junket operators do more than offer travel and accommodation.
“Junket operators have been able to serve as international bank-like entities, using a variety of underground financial services including lending, currency exchange and multi-currency payment and settlement solutions, money transfers and illegal debt collection methods. in organized crime”.
The report uses the Tether (USDT) stablecoin on the Tron blockchain, which is the most popular among the region's financial bad actors due to its stability, ease of use, reputation and low fees.
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Domestic crypto exchanges can also play a role in money laundering, with “significant gaps in blockchain prosecution, reports generated by crypto exchanges, and the proliferation of laundromats that increase crypto transaction volume and reduce the number of transactions identified as illegal.”
The report contains a long list of recommendations to improve awareness and policies to combat financial irregularities in the region.
Casinos, junkets and #crypto: the main drivers of #money laundering, underground banking and #cyberfraud in East and Southeast Asia. New policy brief #organizedcrime #Mekong #ASEAN pic.twitter.com/Oeunz54fUZ
— UNODC SEAsia-Pacific (@UNODC_SEAP) January 15, 2024
A non-profit group has filed similar charges against Circle's USD Coin (USDC) used on Tron. A Reuters investigation also linked Tron to illegal financing in the Middle East. China cracked down on the use of the US dollar as a foreign currency in December. Tether, the largest stablecoin with a market capitalization of nearly $95 billion, has been proactive in its efforts to cooperate with US law enforcement.
Stablecoins have proven useful in a growing number of applications related to foreign exchange and decentralized finance. Their use is growing rapidly as more governments regulate them.
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