$100 Million Cryptocurrency Scheme Uncovered in Myanmar – What’s Going On?

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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February 25, 2024 11:13 EST

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Chainalysis has unveiled a new case of fraud involving a single company operating from a compound in Myanmar, which 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. 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. 

Criminals Continue to Use Tether Despite Traceability

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.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. KK Park, located near Myanmar’s border with Thailand, is believed to house thousands of trafficked workers, many of whom are coerced into operating online scams.The ownership of KK Park remains unclear, and attempts to reach its operators for comment have been unsuccessful. These findings regarding KK Park are likely to increase pressure on Tether, which manages nearly $100 billion in assets, to take stronger action against the illicit use of its in-house currency. The UN’s office on drugs and crime recently warned that Tether had become a leading payment method for money launderers and fraudsters in Southeast Asia. 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. 

Tether Has Blacklisted 1,300 Crypto Wallets

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. Koven highlighted that many of these scams leverage Tether and Tron due to Tether’s price stability and Tron’s affordable transaction fees. Tron network founder Justin Sun faced charges by US regulators in March of the previous year for the alleged unregistered sale of securities and market manipulation, claims he dismissed as lacking merit.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.“This case illuminates how we can quantify the scale of the problem, identify other scams in the broader network, and discover more victims,” Koven said.