India Nabs Scammers Using USDT to Move Stolen Funds Abroad

A recent report from local media revealed that the Rajasthan state police in India have arrested cybercriminals involved in crypto scams. These individuals were arrested for using Tether’s stablecoin, USDT, to transfer stolen funds outside the country.

Indian Local Criminals Liaise with International Cyber Gangs

Several case investigations revealed that cyber gangs from other nations rely on local criminals in Rajasthan to convert money received from digital scams into crypto. Superintendent of Police Arshad Ali explained that the cryptocurrencies were sent to exchanges based in Dubai and France. As a result, Ali speculated that the masterminds behind the cyber scams are likely operating from these countries.

According to the report, the local criminals converted approximately $115,546 into USDT. A senior police official said some criminals were arrested by district police and the Special Operations Group (SOG).

How the Cyber Criminals Operate

These online criminals usually get locals’ bank accounts, ATM cards, SIM cards, and cell phones. They eventually use these items to deposit illegal money into local crypto exchanges. Subsequently, they transfer the cryptocurrencies, particularly USDT, to international accounts, making the funds difficult to trace.

The police recovered four mobile phones and eight SIM cards linked to crypto laundering activities from the suspects during a recent raid. 

Additionally, the SOG arrested 15 people on December 14 for related cyber crimes. Some provided direct bank accounts for stolen funds, while others were currency exchangers. 

The Growing Adoption of USDT for Criminal Activities

Digital asset scammers worldwide have persistently used USDT for their illicit activities. These criminals prefer USDT due to its stability, liquidity, and pseudo-anonymity.

Consequently, Tether has received criticism for facilitating illegal activities. In some cases, the firm has been accused of assisting in circumventing international sanctions. 

In May 2024, Tether partnered with Chainalysis to combat online fraud. Tether said it plans to leverage the partnership to develop a transaction monitoring platform to identify suspicious transactions and track secondary market activity.

Tether Maintaining Relevance

Despite recent security criticism and challenges, Tether has continued to show resilience in the blockchain space. 

Tether’s CEO Paolo Ardoino recently announced expansion plans in the US. However, he maintained that the move depends on the regulatory framework that emerged after Donald Trump’s inauguration.