Indian Cybercriminals Use USDT for Cross-Border Money Laundering
Cybercriminals in India are increasingly using blockchain technology for cross-border money laundering, notably utilizing USDT. The stablecoin's attributes, such as ease of transfer and pseudo-anonymity, make it attractive for illicit activities.
- Authorities in Rajasthan arrested several individuals involved in converting over INR 1 crore (about $115,546) into USDT for cybercrime networks abroad.
- Scammers recruit local "money mules" to facilitate fund transfers, using their bank accounts and mobile devices to deposit stolen funds.
- Funds are converted into USDT via local exchanges and transferred to offshore wallets, complicating recovery efforts.
- Multiple mobile devices and SIM cards were seized during the arrests, highlighting the operational methods of these criminals.
India’s Response to Crypto Scams
- Indian law enforcement is actively addressing crypto-based money laundering; a prior operation led to the arrest of 15 suspects linked to USDT transactions.
- In December 2024, India's Enforcement Directorate arrested individuals involved in laundering cybercrime funds through cryptocurrencies, seizing INR 47 lakh in cash and INR 1.36 crore in crypto assets.
- The Delhi Police, in partnership with Binance, uncovered another scheme involving the transfer of over 100,000 USDT.
Regulatory Actions and Challenges
- The rise of USDT in financial crimes has prompted scrutiny from global regulators.
- Tether is collaborating with Chainalysis to develop transaction monitoring tools to detect suspicious activities.
- In September, Tether partnered with Tron and TRM Labs to form the T3 Financial Crime Unit for monitoring illicit transactions.
- Despite these efforts, the decentralized nature of blockchain presents ongoing challenges for law enforcement in combating money laundering.
With increased scrutiny on cyber fraud, Indian authorities are expected to enhance surveillance and work with global crypto firms to monitor illicit fund flows.