Indian Scammers Use Tether (USDT) For Laundering Illegal Funds

In Rajasthan, India, cybercriminals were caught using Tether (USDT) for the laundering of illegal funds. It has become more evident that stablecoins are becoming increasingly popular in digital scams.

Cybercriminals in Rajasthan, India, have been caught using Tether (USDT) to launder illegal funds, highlighting the increasing use of stablecoins in digital scams.

Local authorities apprehended some money mules who were involved in converting more than INR 1 crore (around $115,546) into USDT before sending it abroad to cybercriminals in Dubai and France.

The scammers earned money through “digital arrest” scams, where they tricked unsuspecting people into sending money, said Superintendent of Police Arshad Ali. The local mules were then responsible for converting the scam money into USDT and transferring them to international crypto exchanges.

In the latest development, three active participants, identified as Nitesh, Divanshu, and Ankush, were arrested by Hanumangarh cyber police for their involvement in the money laundering process. The police arrested them with some mobile phones and SIM cards.

According to the authority, this trio helped launder almost ₹1 crore into Tether (USDT), making the stolen money nearly impossible to trace.

Mobile phones and SIM cards were confiscated by the police during arrests. The gangsters, in fact, have been using the resources available in the locality like ATM cards, mobile phones, and bank accounts to further the scheme. Authorities suspect that the masterminds of this cross-border operation are based in Dubai and France.

Tether, the biggest stablecoin, has become a favorite coin of criminals due to its liquidity, stability, and pseudo-anonymity. The stablecoin will face higher-level scrutiny and regulation when users use it to launder money. Recently, Tether stepped up its mechanism against money laundering.

In May 2024, Tether announced a partnership with Chainalysis to monitor secondary market activities and identify suspicious transactions. Tether also partnered with TRM Labs and the blockchain network Tron to establish the T3 Financial Crime Unit, which monitors illegal activities involving USDT on the Tron network.

Such increased utilization of Tether for cybercrime becomes pretty difficult for law enforcement agencies who look forward to cracking down on cryptocurrency fraud. Moreover, the case also brings about tighter regulatory and supervision standards in the crypt space that may cut down on malpractices.