“Myanmar Scandal: $100M Cryptocurrency Scheme Exposed – Details Revealed!”


Last updated: February 25, 2024 13:00 EST | 2 min read

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

Source: Midjourney

The digital currency platform Chainalysis has uncovered a $100 million cryptocurrency scheme in Myanmar. The company, in collaboration with the US anti-slavery group International Justice Mission, analyzed transactions made with Tether, a major cryptocurrency platform, and traced them to a company operating from a compound in Myanmar. The company used the digital coins in what is known as “pig butchering” scams, which involved swindling victims through fake investments.

Tether’s tokens, which are designed to track the value of the US dollar, have previously been used by criminal groups for cross-border payments. In this case, Tether tokens were also used to pay ransoms to a company located in a compound called KK Park in eastern Myanmar. The analysis revealed that this single Chinese company had accumulated over $100 million in cryptocurrency within just two digital wallets.

Despite the traceability of Tether tokens, criminals continue to use them, which is a concerning trend. In an effort to protect the victims of human trafficking who were forced to work for the company involved in the scams, Chainalysis and International Justice Mission have chosen not to disclose the company’s identity.

Former workers who participated 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, located near Myanmar’s border with Thailand, is believed to house thousands of trafficked workers who 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 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.

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.

Jackie Koven, head of cyber threat intelligence at Chainalysis, highlighted that many of these scams leverage Tether and the Tron network 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 highlights how we can quantify the scale of the problem, identify other scams in the broader network, and discover more victims,” Koven said.

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