The focus is again drawn to Tether, the largest stablecoin issuer in terms of market capitalization. This comes after Consumers’ Research, a non-profit organization, started a crusade to expose what they allege as Tether’s complicity in terror financing human trafficking and interacting with the Chinese and Russian governments.
Will Hild, the Executive Director of Consumers’ Research, has said that countries like Russia have used cryptocurrency to dodge various penalties. He also stressed that Tether has been linked to the support of various financial transactions for terrorists such as Hamas, Al Qaeda, and ISIS, with reported figures running to millions of dollars. In addition, the stablecoin has been associated with $20 billion in criminal activities in the last year and is also known to have been used by certain countries, including Venezuela.
The problem with Tether has become more topical after the recent attack of Hamas on Israel on October 7th and the subsequent freezing of about 100 accounts by the Israeli government on Binance. Tether also decided to freeze assets worth $800,000 as a result of Binance’s actions. That is why there are certain concerns and fears despite the actions taken by Tether to eliminate possible connections with illegitimate operations.
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Consumers’ Research has gone a step further and placed a billboard in one of the most strategic areas and visibility, Times Square, with the message ‘Tetheredtocorruption’. It is a theatrical strategy to draw attention to the fact that Tether is corrupt. It has been accused of not putting the company through an audit that would prove its assertion that each coin has at least a dollar equivalent in US dollars. Using the FTX case, Consumers’ Research tries to explain possible dangers connected with the investment in Tether.
Tether has dismissed these claims vehemently and continues to affirm that all the assets it holds are backed fully. They have also highlighted their efforts in curbing illicit activities connected to their stablecoins, including collaboration with well-known law enforcement bodies, including the FBI and the US Secret Service.
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These are the indications of the ongoing challenges and scrutiny that the cryptocurrency sector is experiencing today, including the use of stablecoins like Tether to bypass government restrictions and finance criminal activities. As authorities and institutions continue to regulate and monitor the world of cryptocurrency, there is still controversy regarding the legitimacy and security of cryptocurrencies.
