In Rajasthan, India, law enforcement has discovered a major cryptocurrency laundering scheme involving stablecoins like Tether (USDT).
Several individuals have been arrested for converting over ₹ one crore (about $115,546) into USDT and transferring the funds to international cybercriminal networks.
According to a local report, The superintendent of Police, Arshad Ali, revealed that illicit funds were gathered through fraudulent digital scams, including “digital arrest” schemes. The money was transferred through local intermediaries to cryptocurrency exchanges in Dubai and France. Ali suggested that the masterminds behind these operations are likely in those countries.
“Some of these mules have already been arrested by police in some districts and Special Operations Group (SOG),”
a senior police official said.
“During interrogations, it emerged that these mules played a critical role in converting Indian currency into Tether (USDT) and transferring it to foreign cybercriminal networks,”
he added.
Suspects gained access to local bank accounts, ATM cards, mobile phones, and SIM cards from unaware individuals, allowing them to deposit stolen funds into cryptocurrency exchanges. Police recovered four mobile phones and eight SIM cards during recent arrests related to the money laundering scheme.
Tether, the company behind USDT, has faced criticism for facilitating illicit financial activities but has taken steps to address these concerns. In May 2024, Tether partnered with blockchain analytics firm Chainalysis to establish a monitoring platform for tracking transactions and identifying suspicious activities.
Notably, In September, Tether partnered with Tron and TRM Labs to establish the T3 Financial Crime Unit to combat illegal activities involving USDT on the Tron network. TRM Labs highlighted that USDT is increasingly used for terrorist financing, while USD Coin (USDC) had significantly fewer illicit transactions ($428.9 million). The report revealed that TRON accounted for 45% of all illicit crypto transactions in 2023, an increase from 41% in the previous year, while Ethereum and Bitcoin made up 24% and 18%, respectively.
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