Chainalysis has revealed a recent case of fraud involving a lone company operating from a compound in Myanmar, which managed to deceive victims out of more than $100 million in less than two years.
In collaboration with the US anti-slavery group International Justice Mission, the firm conducted an analysis that traced digital coins issued by Tether, one of the world’s largest cryptocurrency platforms, which were used in what are commonly referred to as “pig butchering” scams.
According to Chainalysis, Tether tokens were also utilized to make payments to a company situated in a compound known as KK Park in eastern Myanmar. These payments were made by families of trafficked workers who had been coerced into paying ransoms for their release.
Further analysis revealed that a single Chinese company managed to amass over $100 million in cryptocurrency within just two digital wallets.
Tether’s tokens, designed to mirror the value of the US dollar, have been previously exploited by criminal organizations as a method of cross-border payment.
Despite the traceability of Tether, criminals persist in using it:
Jackie Koven, head of cyber threat intelligence at Chainalysis, highlighted that this case underscores a broader trend of criminal activity involving digital assets.
Despite the fact that Tether tokens are traceable, criminals persist in using them, marking a troubling trend.
To safeguard the victims of human trafficking who were employed by the Chinese company involved in the scams, Chainalysis and International Justice Mission opted not to reveal the identity of the company.
Former employees who were involved in the pig butchering scams provided information to International Justice Mission about the two crypto wallets used by the company to receive illicit funds.
KK Park, situated near Myanmar’s border with Thailand, is suspected to accommodate thousands of trafficked workers, many of whom are coerced into engaging in online scams.
The ownership of KK Park remains unclear, and attempts to contact its operators for comment have been unsuccessful.
These revelations regarding KK Park are likely to increase pressure on Tether, which manages nearly $100 billion in assets, to take more decisive action against the illicit use of its proprietary currency.
The UN’s office on drugs and crime recently cautioned that Tether had become a preferred payment method for money launderers and fraudsters in Southeast Asia.
Tether has announced that it is collaborating with authorities worldwide to curb the illicit use of its token and has frozen $276 million linked to pig butchering scams.
Tether Has Blacklisted 1,300 Crypto Wallets According to data provider CCData, Tether has blacklisted nearly 1,300 crypto wallets, with the numbers escalating since November when the company provided access to its platform to US authorities, including the FBI.
A significant portion of the monitored $100 million in cryptocurrency associated with the company in KK Park was traded on the Tron blockchain, which has emerged as one of the industry’s largest networks, offering minimal transaction fees.
Koven emphasized that many of these scams exploit Tether and Tron due to Tether’s price stability and Tron’s low transaction fees.
Tron network founder Justin Sun was charged by US regulators in March of the previous year for the alleged unregistered sale of securities and market manipulation, allegations he refuted as lacking merit.
While pig butchering scams do not exclusively rely on cryptocurrency for payments, the speed and intricacy of blockchain transactions make them more difficult for law enforcement agencies to trace.
Koven noted that the utilization of Tether and Tron, which can often be tracked on a public ledger, presents an opportunity for law enforcement to disrupt illegal activities, but global coordination is essential.
This instance demonstrates our ability to gauge the magnitude of the issue, pinpoint additional scams within the wider network, and uncover more victims.
Jackie Koven, head of cyber threat intelligence at Chainalysis
