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Chainalysis Uncovers $100 Million Fraud Case
Chainalysis has revealed a new case of fraud involving a single company operating from a compound in Myanmar. The company swindled a sum of over $100 million from victims in less than two years. The firm, in collaboration with the US anti-slavery group International Justice Mission, conducted an analysis that traced digital coins issued by Tether, one of the world’s largest cryptocurrency platforms, used in what are known as “pig butchering” scams.
Utilization of Tether Tokens in Criminal Activities
According to Chainalysis, Tether tokens were also employed to make payments to a company located in a compound called KK Park in eastern Myanmar. These payments were made by families of trafficked workers who had been forced to pay ransoms for their release. The analysis further revealed that a single Chinese company managed to accumulate over $100 million in cryptocurrency within just two digital wallets. Tether’s tokens, designed to track the value of the US dollar, have previously been utilized by criminal groups as a cross-border payment tool.
Continued Use of Tether Tokens by Criminals
Jackie Koven, head of cyber threat intelligence at Chainalysis, expressed that this case exemplifies a larger trend of criminal activity involving digital assets. Despite the traceability of Tether tokens, criminals continue to use them, which is a concerning development.
Protecting Victims and Tether’s Response
To protect the victims of human trafficking who were working at the Chinese company involved in the scams, Chainalysis and International Justice Mission decided not to disclose the company’s identity. Former workers who participated in pig butchering scams provided information to International Justice Mission regarding the two crypto wallets used by the company to receive illicit funds. Tether has stated that it is collaborating with authorities worldwide to prevent the illicit use of its token and has frozen $276 million associated with pig butchering scams.
Blacklisting of Crypto Wallets and Tron Network
Data provider CCData reports that Tether has blacklisted almost 1,300 crypto wallets, with the numbers surging since November when the company granted access to its platform to US authorities, including the FBI. Most of the tracked $100 million in cryptocurrency associated with the company in KK Park was traded on the Tron blockchain, which has become one of the industry’s largest networks, offering low transaction fees.
Challenges and Opportunities for Law Enforcement
While pig butchering scams do not exclusively rely on cryptocurrency for payments, the speed and complexity of blockchain transactions make them more challenging for law enforcement agencies to track. Koven noted that the use of Tether and Tron, which can often be traced on a public ledger, presents an opportunity for law enforcement to disrupt illegal activities, but global coordination is required.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
