Tether: The Controversial Cryptocurrency Linked to Criminal Activity

Tether is a cryptocurrency known as a stablecoin, backed one-to-one by real assets like the US dollar. However, it has gained notoriety for its alleged involvement in illicit activities, including terrorism financing, drug trafficking, and money laundering.

Connections to Sa'id al-Jamal

In 2021, the US Treasury Department accused Sa'id al-Jamal, a financier of the Houthi rebels in Yemen, of using Tether wallets to move over $300 million. Despite US sanctions against al-Jamal, he was able to circumvent them using Tether.

Criminal Underworld

Tether has become a preferred currency for criminal organizations, including North Korean hackers, Mexican drug cartels, and Southeast Asian human traffickers. Deputy Treasury Secretary Wally Adeyemo warned of Russia's use of Tether to evade sanctions during the Ukraine conflict.

Howard Lutnick and Cantor Fitzgerald

Howard Lutnick, CEO of Cantor Fitzgerald LP, has been a prominent supporter of Tether and serves as the custodian of most of its US Treasury bonds. His firm has earned millions of dollars from its relationship with Tether, raising concerns about a conflict of interest.

Concerns About Regulation

Regulators, including the Treasury Department's Financial Stability Oversight Council, have repeatedly raised alarms about Tether's risks. US prosecutors are reportedly investigating the company, which it has denied.

Criticism from Congress

Senator Elizabeth Warren and Senator Cynthia Lummis have criticized Tether for facilitating illicit activities. Lummis has called for the company to face legal repercussions.

Global Expansion and Controversy

Tether has recently announced plans to relocate to El Salvador, citing concerns about US regulations. However, it is considering a US presence, raising questions about its commitment to addressing illicit activity.

Challenges for Law Enforcement

Tether's ability to freeze accounts and seize funds is limited. Additionally, criminals can easily open new wallets, making it difficult for law enforcement to track and disrupt illicit activity.

Conclusion

Tether's involvement in criminal activity and its ties to individuals under sanction raise serious concerns about the regulation of cryptocurrencies. The relationship between Lutnick and Tether, as well as the company's plans for expansion, highlight the need for increased oversight and enforcement to prevent the abuse of stablecoins.