Tether’s USDT has been implicated in an alleged illegal foreign exchange scheme worth $2 billion in China, raising concerns about potential regulation. Chinese police in Sichuan province arrested suspects involved in an underground banking scheme that used USDT to evade national foreign exchange supervision. The operation led to the shutdown of a major scheme involved in smuggling operations worth $1.9 billion. Stablecoins like USDT are often exploited for their price stability and anonymity, making them attractive for illicit transactions. This recent arrest follows a similar event involving the arrest of Cartier’s heir, who allegedly used USDT for money laundering. The United Nations Office on Drugs and Crime has also highlighted USDT as a tool used by money launderers and fraudsters. Ripple CEO Brad Garlinghouse suggested that the US government is targeting Tether, fueling speculation about potential regulation. However, Tether CEO Paolo Ardoino defended the company, highlighting their collaboration with global law enforcement agencies to combat illicit activities. Tether has partnered with 24 agencies in over 40 countries and has frozen funds associated with phishing scams. They have also partnered with Chainalysis to develop monitoring and analysis tools. Despite the concerns and scrutiny, the US government’s regulation of Tether may be unfounded.
