Tether stablecoin—a destination for scammed funds—tops $100B

The unregulated Tether stablecoin reached $100 billion in circulation this week amid rising demand for cryptocurrencies, Reuters reported.

Details: With roughly $142 billion in stablecoins in circulation, Tether far outpaces its competitors—without facing a single audit or examination. An academic paper released last week found “pig butchering” scams—in which victims invest increasing sums in supposedly legitimate virtual currency enterprises before being conned—has claimed $75 billion since January 2020, with scammers typically converting the funds into Tether.

FinCEN Alert: The Financial Crimes Enforcement Network last year issued an alert on pig butchering that explains the scam, provides red flags to help financial institutions identify and report related suspicious activity, and reminds financial institutions of their reporting requirements under the Bank Secrecy Act.

ICBA Advocacy: In a recent letter to FinCEN, ICBA noted that bad actors who engage in “pig butchering” scams increasingly use crypto mixers to obscure key details in crypto transactions. It called on FinCEN to do more to combat mixer-enabled crime, including considering the roles played by the wider crypto ecosystem.