Consumer Group Alerts Public to Cryptocurrency Used by Drug Cartels and Terrorists

Americans should exercise caution when using the cryptocurrency Tether due to its association with terrorists and drug cartels, according to a new multimillion-dollar campaign by a consumer advocacy group. Consumers’ Research, an independent education organization for consumers, launched a comprehensive media campaign on Tuesday to highlight the potential risks of using Tether.

Key Points:

• Suspicious Practices: The campaign alleges that Tether has engaged in suspicious business practices, including a refusal to undergo audits and frequent use by criminals.

• Media Campaign: Consumers’ Research has initiated a national television campaign, a digital billboard in Times Square, and a website named “Tethered Corruption” to disseminate its warnings.

• Global Criminal Use: Reports indicate that Tether is used by Hamas, Chinese fentanyl suppliers, and North Korea's nuclear program. In 2020, the Justice Department charged six international drug ring members for using Tether to bribe a government official.

“We are shining a light on Tether for their suspicious business practices, including a decade-long refusal to perform an audit and the routine use of the product by terrorists and traffickers of drugs and humans,” stated Consumers’ Research Executive Director Will Hild.

The campaign poses the question, “Is Tether the next FTX?” referencing the infamous collapse of the cryptocurrency exchange FTX in 2022, which resulted in over $10 billion in customer losses. The campaign claims that Tether is “chronically under investigation” and a favored currency for illicit activities.

• Widespread Illicit Transactions: In 2023, it is estimated that approximately $19.3 billion in illicit transactions involved Tether. The cryptocurrency has also been utilized by countries like Russia and Venezuela to circumvent sanctions.

Despite these allegations, Tether has defended itself, arguing that the estimates of illicit activity are overstated and asserting its cooperation with law enforcement agencies worldwide. “We have always assisted law enforcement when called upon to act, and we remain fully committed to continuing to work proactively with agencies globally,” the company said in a December 2023 statement.

• Consumer Advocacy: Consumers’ Research insists that Tether has evaded accountability, likening its situation to the collapse of FTX. Hild expressed concerns that Tether might face a similar downfall, cautioning consumers about the risks associated with Tether and other stablecoins that lack proper asset certification.

“Given these warning signs, we fear that Tether may very well be the next FTX,” Hild warned. “Consumers should be wary of any so-called stablecoin that refuses to properly certify that they actually hold the assets they claim.”

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