Tether, the cryptocurrency that has been backed by the US dollar for years, has been touted for links to terrorists and human traffickers.
The crypto company — which costs one token per one dollar — is touting itself as a “stablecoin” that doesn’t fluctuate in price, also making it a popular currency among bad actors looking for traceless payments, according to conservative nonprofit Consumers’ Research.
The consumer advocacy group is running a multi-million dollar advertising campaign highlighting Tether’s alleged ties to the Chinese and Russian governments, terrorist groups, human trafficking organizations and Hamas.
Tether is a ‘Ponzi scheme’ that threatens to become the next crypto disaster, as FTX Consumers’ Research Executive Director Will Hild told DailyMail.com exclusively.
“It’s been used by Russia to avoid monetary sanctions, it’s been used by countries like Venezuela, and then it appears to be used by human traffickers.”
Tether, which started in 2014, was co-founded by former Disney child star Brock Pierce, 43. However, he is no longer associated with the coin.
Consumers’ Research launched a multimillion-dollar ad campaign against the stablecoin Tether due to its connections to crime, China, Russia, Hamas and human trafficking
Pierce’s circle of contacts included Steve Bannon, with whom he ran an internet gaming company, and pedophile Jeffrey Epstein, with whom he consulted on cryptocurrency.
Hild went on to say that Teher was the “most used” stablecoin for criminal activity in 2023, “so it seems to be kind of a go-to coin for people looking to avoid US sanctions or break the law.”
Tether “can’t even undergo an audit to ensure they are fully supported,” Hild added.
The consumer company is most concerned about the crypto’s refusal to undergo an audit to ensure that the tokens are indeed reassured on a one-to-one basis, from coin to dollar.
“Similar to FTX’s illegal activities, (Tether) is kind of a fellow traveler with the Ponzi scheme aspect of it.”
“FTX is about (surrounding) the assets they claimed to have on behalf of their clients. That’s parallel number one. You have parallel number two, they are both outside the United States.”
Currently, the company – with a market capitalization of over $112 billion – is based in the British Virgin Islands.
The disastrous crypto exchange FTX, whose founder eventually went to prison for illegally spending billions in user funds, was based in the Bahamas.
“However, all Tether tokens are pegged 1-to-1 to a matching fiat currency and are 100% backed by Tether’s reserves,” the crypto company said on its site.
“Not only has the repeated criticism of Tether’s reserves been thoroughly refuted, but the company has also led the industry in its commitment to combat the illegal use of stablecoin technology,” a Tether spokesperson told DailyMail.com.
“Notably, Tether has integrated the FBI and U.S. Secret Service into its platform to increase efforts against criminal activity involving stablecoins,” the spokesperson continued. “To date, Tether has blocked or frozen more than $1.3 billion in USDT related to illegal activities.”
Yet cryptocurrency in general also has clear applications for terrorism – and more than 100 accounts on platforms like Binance were found to have funneled money to Hamas as it waged war against Israel.
View of the Consumers’ Research ad blitz in New York’s Times Square
The group also points to Tether’s ties to drug trafficking
About $800,000 was frozen in an effort in October to prevent money from flowing to terrorism.
North Korea has even used crypto to fund its nuclear programs to avoid sanctions on traditional trading assets, the Wall Street Journal reported.
“Tether is known for its nefarious ties to criminal activities,” Hild told DailyMail.com.
“Last year, Tether was linked to nearly $20 billion in illegal transactions. Tether has also been used by Hamas, Al Qaeda, ISIS and others, with known terrorist financial transactions in the millions.”
And Cyprus is linked to Russian efforts to undermine sanctions created as a result of the invasion of Ukraine.
Tether specifically has also been involved in human and drug smuggling operations, Hild told DailyMail.com.
In November 2023, Tether announced that it had frozen nearly $225 million in funds tied to a human trafficking ring following a Secret Service investigation.
The coins were “linked to an international human trafficking syndicate in Southeast Asia responsible for a global ‘pig slaughter’ romance scam,” Tether said.
Tether is also a preferred payment method for Chinese nationals producing fentanyl in Mexico, the WJ.
The cryptocurrency has several features that make tracing payments more difficult for authorities.
The stablecoin is known to help fentanyl and human traffickers access non-traditional payment methods, Hild said
“We are shining a light on Tether for their questionable business practices, including a decade-long refusal to conduct an audit and the product’s routine use by terrorists and drug and human traffickers,” Hild said.
“Given these warning signs, we fear that Tether could very well be the next FTX.”
“Consumers should be weary of any so-called stablecoin that refuses to properly certify that they actually own the assets they claim.”
Consumers’ Research’s TV ad buys will be seen in Washington, DC and New York. The company will also run anti-Tether ads in New York’s Times Square.
Brock Pierce, 43, is a former child actor who starred in the Mighty Ducks films before reinventing himself as a cryptocurrency cult leader. In 2014, he invented the highly controversial Tether coin, which experts fear could collapse the digital currency system. He says he has not been affiliated with the company since 2015.
Tether co-founder and former Disney actor and child star Brock Pierce