Is Tether Linked to Money Laundering? TruthLabs Reports Shocking Findings

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Recent investigations by TruthLabs have unveiled disquieting links between Tether, one of the largest stablecoins in the cryptocurrency market, and illicit activities, including money laundering and ties to terrorist groups. These findings come in addition to results dealing with Crypto Israel Aid and a preferred crypto exchange of Hamas, Cex.io.

TruthLabs’ Initial Findings on Tether

Eight months ago, TruthLabs dug through a report by the Department of Justice detailing Tether addresses that were somehow connected to money laundering and terrorist financing. The inquiry illuminated that the report did not include certain major addresses connected to such activities. 

It seemed off to TruthLabs that “a few of the addresses that were not only money launderers but also massive rug artists and protocol exploiters directly connected to these terrorist groups on-chain weren’t included.”

Such an omission raises questions about how complete and transparent the report is. TruthLabs underlined:

“The blockchain is the Truth. The addresses that they didn’t include were 10x if not 10,000x bigger perpetrators than the ones they did include in the report and blacklisted.”

Connections between Cex.io and Hamas

TruthLabs researched Crypto Israel Aid’s funding addresses, finding a disturbing pattern. The original funding addresses were linked to the same addresses identified in the DOJ report but not blacklisted. TruthLabs questions the impartiality of US regulatory agencies:

“So when you tell me that Israel runs the US government and its agencies, I kind of have a hard time not believing it.”

TruthLabs’ post of October 11, 2023, showed that one of the favored crypto exchanges for Hamas is Cex.io. Among the list of exchanges within the Silvergate Bank network is Cex.io. It was tied to Capital Financial Plus. CFP was involved in widespread PPP loan fraud, giving loans to fake people while denying that to legitimate small business owners.

TruthLabs pointed out, “CFP was one of the largest PPP fraud-ridden banks, handing out tons of loans to fake people and denying the loans of real small business owners.”

Further, CFP had access to a risk-free government home loan program, $125M, which added to this misused money scheme. TruthLabs pointed out the broader implications of these findings as the money printing during COVID-19 is highly substantial and the borders are open:

“Oh, and we printed like 50 years worth of money during COVID, and our borders are wide open.”

Forbes and UNODC Reports on Tether

The concerns expressed by TruthLabs are consistent with warnings from other authorities. In January 2024, Forbes reported on a UNODC warning about Tether’s becoming a preferred platform for money laundering and fraud, particularly in East and Southeast Asia. The report said that Tether’s stability, ease of use, anonymity, and low transaction fees were key factors in its attraction to criminals. 

The UNODC highlighted the “surging volume” of cyber fraud, money laundering, and underground banking cases involving Tether. Specific schemes included “sextortion” and “pig butchering,” which exploit social engineering to extract money from victims.

Online gambling platforms have also been identified as major vehicles for Tether-based money laundering, contributing to the rapid growth of the illicit digital economy in the region.

In Brief….

Taken together with the warnings of international bodies, TruthLabs’ revelations indeed portray a very critical picture of Tether’s involvement in illicit activities. The connections to terror groups, money laundering, and fraud underpin the requirement for enhanced scrutiny and transparency in the cryptocurrency market.