Chainalysis has revealed a fresh case of fraud involving a single company operating from a compound in Myanmar that stole more than $100 million from victims in less than two years.
The firm, in partnership with the US anti-slavery organization International Justice Mission, undertook an investigation that identified digital tokens created by Tether, one of the world’s largest cryptocurrencycurrency platforms, and used in “pig butchering” schemes.
According to Chainalysis, Tether tokens were also used to pay a company in eastern Myanmar’s KK Park compound.
These payments were made by the families of trafficking workers who were forced to pay ransoms to be released.
The investigation also indicated that a single Chinese corporation was able to accumulate more than $100 million in cryptocurrencycurrencies using only two digital wallets.
Tether’s tokens, which are supposed to track the value of the US dollar, have historically been used by criminal organizations as a cross-border payment method.
Criminals Still Use Tether Despite Traceability
According to Chainalysis’s head of cyber threat intelligence, Jackie Koven, this case is an example of a wider pattern of criminal activity involving digital assets.
It’s a worrying trend that criminals are still using Tether tokens despite their traceability.
Chainalysis and the International Justice Mission decided not to reveal the identity of the Chinese company involved in the frauds in order to protect the victims of human trafficking who were employed by it.
The two cryptocurrencycurrency wallets that the business used to receive illegal cash were disclosed to International Justice Mission by former employees who took part in pig slaughtering schemes.
It is estimated that thousands of trafficked laborers reside in KK Park, which is close to Myanmar’s border with Thailand. Many of these individuals are forced to run online frauds.
It is still unclear who owns KK Park, and attempts to get in touch with its management to get a response have not been effective.
These KK Park discoveries will probably put more pressure on Tether, which oversees assets valued at close to $100 billion, to take more aggressive measures to prevent the misuse of its internal currency.
Tether has emerged as a popular payment option for Southeast Asian scammers and money launderers, according to a new warning from the UN office on drugs and crime.
According to Tether, $276 million connected to pig slaughtering frauds has been frozen and the company is working with law enforcement across the globe to stop the unauthorized usage of its token.
Tether Has blocked 1,300 Crypto Wallets
According to CCData, Tether has blacklisted around 1,300 cryptocurrencycurrency wallets, with the number increasing since November, when the business offered access to its platform to US authorities, including the FBI.
The majority of the $100 million in bitcoin tracked by KK Park was exchanged on the Tron blockchain, which has grown to be one of the industry’s largest networks with minimal transaction fees.
Koven emphasized that many of these schemes use Tether and Tron because of their price stability and low transaction costs.
Justin Sun, the founder of the Tron network, was charged by US regulators in March of the previous year with alleged unregistered securities sales and market manipulation, which he denied.
While pig slaughtering scams may not always use cryptocurrencycurrencies for payment, the speed and complexity of blockchain transactions make them more difficult for law enforcement to follow.
Koven stated that the usage of Tether and Tron, which can frequently be tracked back to a public ledger, provides a potential for law enforcement to stop criminal activity, but global coordination is essential.
“This case illuminates how we can quantify the scale of the problem, identify other scams in the broader network, and discover more victims,” he said.
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