Feds: Tether has become a money laundering tool for Mexican drug trafficker | Hacker News Reader

Feds: Tether has become a money laundering tool for Mexican drug trafficker

404media.co

58 pointsSirLJ27 comments

Drop in the bucket compared to what HSBC alone (continues) to launder [1]. In fact, I'll go out on a limb and suggest the banks may have advised the use of Tether

[1] https://www.icij.org/investigations/fincen-files/hsbc-moved-...

That sounds like an argument to hold HSBC to account, *and* Tether as well. Or was this meant to be nothing more than a false equivalence?

It is a data point to suggest that Tether has another common property. For instance, it has been observed that oxygen is consumed by all living money launderers. If we could not produce evidence anyone but money launderers breathed, we may be able to assess cutting off oxygen might be a useful tool in surgically cutting out money laundering.

Knowing Tether and HSBC are both used for money laundering add a data point in finding surgical precision.

It’s a textbook whataboutism appeal.

HSBC actually paid significant fines, according to the linked article. Tether has not. So in this case Tether does not have moral equivalence despite how much the Tether proponents want everyone looking at everything except Tether.

It's a claim of selective enforcement. Which is rather different from actual "you need to eat your vegetables because there are starving children in Africa" whataboutism.

This is a report of only one type of laundering happening on Tether. I suspect it barely scratches the surface. As a percentage of Tether operations it’s rather significant

Regardless, HSBC paid fines. Tether should be held accountable too.

I have a feeling that the big international banks like HSBC will have an axe to grind with Tether (and cryptocurrencies in general) because it's eating into their highly lucrative business.

That isn't laundering. In fact I think its really bad for banks to be the judge whether customers are doing illegal work eg https://www.nytimes.com/2023/11/05/business/banks-accounts-c.... They shouldn't have that power, it should be up to the courts.

Due to the Patriot Act, a post-9/11 bill, banks are required to view every transaction, foreign and domestic, and find every possible trace of potential terrorist activity. This includes any and all forms of money laundering. They will treat even the most innocent transaction on hold if they find it suspicious, because the law requires it. It can even be indirectly tied to the recent cases of debanking, as internal bank departments are far harsher to legal but politically inconvenient speech than they had been.

And one must remember, the government knew, at minimum, that there was a major terror attack incoming for 3 years prior and even knew 4 of the 19 terrorists involved, even if scale and date was not known. I find it very telling that the bill that was drafted over the following month and a half, and was rushed into law in three days, had such major, calculated impacts on our freedoms.

It's a bad law and should be repealed/reworked as it was a rushed decision of "we need to answer somehow and show we've done something" behaviour.

However "the government (knew)" is just a lot of unconnected bureaucracies and it's expected they won't work very well together. Someone in the 100s of thousands of people knew something, but the decision makers were not aware or didn't know whom to trust.

It's the same problem Stalin had before the Hitler's invasion. Many reports that it'll start any day now, but these were reported repeatedly for 6 months beforehand. It's false positives that drown the real positives.

It would be great to repel the patriot act. But it wont happen. That's the one that allows the government to spy on its citizens. They aren't going to give that up.

If it's /seen/ as a laundering tool, it's no longer a laundering tool. So this is about money mules, not actual traffickers.

https://archive.is/LvAQa

Why would it be sold cheaper in Mexico when you can go on a dex and trade it for any number of tokens and cash it out. This just doesn’t make sense and im not signing up to read their stupid articles.

Likely this will be upvoted here though because it paints crypto in a negative light. Enjoy HN.

This is basically true of any useful means of exchanging currencies or value. Far, far, more mexican drug trafficker laundering has been, and is being done, at places like Wells Fargo.

Tether accounts can be frozen by the FBI. Not sure how it can be used by the cartels? What am I missing?

What if it can be frozen but in practice it isn't.

There's a pic floating around out there of Brock Pierce shaking Merrick Garland's hand at the White House.

Which accounts do you mean? Tether-denominated accounts could be at any cryptocurrency exchange or on a blockchain.

Tether also owns billions of dollars of US Government bonds. Does this mean they're more or less likely to be protected by US interests?

I don’t see why it would matter. The US treasury market value is more than $25 trillion.

In today’s breaking news: Money used to buy things.

So? The US dollar has funded terrorism in the Middle East for decades and we don't see the Feds becoming concerned about the way this currency works.

whereas the dollar is a decentralized currency that no one can fully control, tether is a centralized scam propped up by a handful of exchanges

Tether can and has frozen certain funds due illegal activity (at the request of 'authorities') - so I've heard at least - so it would appear that there's precedent. The fact that the Feds are calling this out is... interesting if they're not also actually making any attempt to freeze these funds.

Potential dog whistling.

I am 100% sure the United States Federal government has been very concerned about terrorism in the middle east. I am not certain your whataboutism works in this case.

I would offer a different point of view. On US soil they seem to be more concerned about it. When someone blows themselves up the US doesn't get involved. When terrorist/freedom fighters attack governments with unfriendly countries the US might be funding that.

The US cares about the overall goal of regional stability. They can use terrorism by funding groups with similar interests to advance their goals. When terrorism is used against them personally they care.

Reply on news.ycombinator.com