Drugs, ransomware, sanctions evasion and espionage – these are just some of the crimes uncovered by a global investigation into financial crimes and money laundering networks.
Operation Destabilize, led by Britain’s National Crime Agency (NCA), targeted large-scale money laundering networks with a focus on Russian-linked entities.
The Operation exposed two Russian networks, Smart Group and TGR Group, involved in laundering cash for cybercriminals, drug dealers and sanctioned oligarchs.
Operating in thirty countries from the UK to the Middle East and South America, they used Tether and other digital currencies to launder for criminal gangs that Kinahan cartelto help sanctioned Russian oligarchs circumvent restrictions and even assist the Russian state with espionage.
So far, 84 people, including Smart Group mastermind Ekaterina Zhdanovahave been arrested and 20 million pounds ($24.2 million) in digital currencies have been seized.
Tether – always in the room, but never guilty
While Tether has reaffirmed its commitment to work with law enforcement and surveillance to prevent illegal activity, it is not the first time offshore stablecoin the issuer has found itself at the heart of a large-scale criminal investigation.
In its decades-long history, Tether has been linked to many different crimes spanning the entire world. After researchers discovered it was being used to drive up the price of BTC in 2017, it was linked Crypto Capital Corpanother company linked to money laundering for drug cartels. The US Department of Justice (DOJ) has cited it in connection with terrorist financing, and other authorities have linked it to cartel operations in Mexico and sanctions evasion in North Korea and elsewhere.
While Tether, perhaps rightly, claims that it cannot control who uses its network and what they use it for, the company does not have a sparkling past of its own. After being prohibited in New York State for making misleading claims about its reserves, Tether has repeatedly refused to submit to a proper auditand it has paid quite a few fines to the New York Attorney General (NYAG), the Commodity Futures Trading Commission (CFTC) and other US regulators for numerous regulatory violations.
Tether always seems to be in the room when crime happens but is never guilty. At least that’s what its executives claim.
Concerned in EU, can Tether survive US stablecoin rules?
With such a questionable past, it’s not surprising that Tether recently suspended its EUR₮ stablecoin in Europe. of the European Union Crypto asset markets (MiCA) regulations impose strict requirements and responsibilities on stablecoin issuers, including obtaining e-money licenses and maintaining transparent reserves.
Citing the lack of regulatory support, Tether retired EUR₮ in November 2024which gives holders one year to redeem their holdings. Whether its USDT stablecoin will survive in the EU remains to be seen, but Coinbase Europe (NASDAQ: COIN) and several other exchanges already have removed it.
With the incoming Trump administration expected to bring regulatory clarity in the US, it is unclear how the potential Stablecoin Regulations may affect Tether. Although it is now a major holder of US Treasuries, a company that has been banned in New York, linked to the activities of widely despised Mexican drug cartels, and whose key product has been used by Russia and North Korea to evade sanctions is unlikely to. to be popular with President Trump or the people he appoints to run US agencies.
Should Tether be delisted from US exchanges, it would likely cause widespread panic in the digital currency markets. At press time, USDT’s 24-hour volume was 78 billion dollarsmaking it a key component of how digital currency markets work. A widespread delisting from US exchanges would most likely lead to a sharp drop in the prices of digital currencies.
Given Tether’s ties to Operation Destablise and many other criminal networks, its future is uncertain. Should it survive and work its way into the heart of the traditional financial system by buying even more US bonds and increase the price of BTC as it becomes intertwined in pension funds, exchange traded funds (ETFs) and other conventional financial instruments which should be of great concern to all. Such an outcome would be completely unthinkable in any rational world.
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