A recent report by the United Nations Office on Drugs and Crime (UNODC) has warned that Tether, one of the world’s most traded cryptocurrencies, has become a key tool for criminals, money launderers and scammers in East and Southeast Asia.

The report claims that Tether’s stability, ease of use, anonymity and low transaction fees have made it the preferred choice for fraudsters and money launderers alike and that its popularity is illustrated by the surging volume of cyber fraud, money laundering and underground banking cases involving the stablecoin.

However, some crypto enthusiasts and experts have challenged the validity and accuracy of the UN report, arguing that it is based on flawed assumptions, incomplete data and biased analysis. They contend that Tether is not the most preferred currency for illicit activities, that it is not as anonymous and untraceable as the report suggests, and that bad actors can use other cryptocurrencies and techniques to evade detection and regulation.

In this article, I will examine both sides of the debate and offer my own opinion on the matter.

What is Tether, and why is it popular?

Tether is a company that runs a blockchain platform and issues digital tokens pegged to real-world currencies with the backing of its own financial reserves, most notably USDT, or tether, which is tied to the US dollar one-for-one. Tether claims that its tokens are fully backed by fiat currency and other assets and that they provide a stable and transparent alternative to volatile and unpredictable cryptocurrencies.

Also Read: From potential to prosperity: Blockchain’s role in reshaping Southeast Asian economies

Tether’s main appeal lies in its ability to bridge the gap between the traditional and the crypto worlds, offering users the benefits of both. Tether users can enjoy the speed, security, low cost and global reach of blockchain transactions while also maintaining the stability, liquidity and familiarity of fiat currencies.

Tether also enables users to access various crypto platforms and services, such as exchanges, wallets, lending, gaming and gambling, without having to deal with the complexities and risks of converting between different currencies and tokens.

According to CoinMarketCap, Tether is the world’s third-largest cryptocurrency by market capitalisation, behind only Bitcoin and Ethereum, with a market cap of over US$95 billion as of January 16, 2024.

Tether also has the highest daily trading volume of any cryptocurrency, surpassing even Bitcoin, with an average of over US$100 billion traded per day. Tether is widely accepted and supported by hundreds of crypto platforms and service providers, as well as some regulated entities, such as banks and payment processors.

What are the allegations against Tether?

Despite its popularity and success, Tether has also been plagued by controversies and criticisms, ranging from its lack of transparency and accountability to its involvement in market manipulation and fraud to its vulnerability to hacking and theft. Tether has faced several lawsuits, investigations and regulatory actions from various authorities and stakeholders, both in the US and abroad, over its business practices, operations and compliance.

The most recent and alarming accusation against Tether comes from the UNODC report, which alleges that Tether has quickly become the platform of choice for money laundering and fraud operations across East and Southeast Asia.

The report cites intelligence from law enforcement and financial authorities in the region, who report that Tether ranks among the most popular cryptocurrencies used by organised crime groups, especially those operating online casinos, which have emerged as among the most popular vehicles for cryptocurrency-based money launderers.

The report also details how Tether is used to facilitate various schemes, such as “sextortion”, a form of blackmail threatening to post sexual content or information about a person, and “pig butchering”, a socially engineered romance designed to “fatten up” targets before extracting money. It claims that Tether’s appeal to criminals lies in its speedy and irreversible transactions, its low detection and traceability, and its ability to bypass regulatory and legal barriers.

Also Read: Understanding the role of fintech, blockchain in transitioning to net zero

The same report also highlights the role of “motorcades”, which are sophisticated, high-speed money laundering teams that specialise in Tether transactions. These teams advertise their services on social media platforms, such as Facebook, TikTok and Telegram, and offer to exchange Tether for fiat currency or other cryptocurrencies for a percentage of the total laundered and transferred funds. It says that these teams have seen a rapid uptick in recent years and that they pose a serious challenge to law enforcement and financial authorities.

What are the counterarguments to the UN report?

In my humble opinion, the UN report has been met with scepticism and criticism, and some other experts also question its methodology, data, and conclusions. They argue that the report is based on anecdotal evidence, selective cases and biased sources and that it does not provide a comprehensive and accurate picture of the crypto landscape and the role of Tether in it. I want to also point out the flaws and limitations of the report and offer alternative explanations and perspectives on the issue.

One of the main counterarguments to the UN report is that Tether is not the most preferred currency for illicit activities and that other cryptocurrencies, such as Bitcoin, Ethereum, and BNB, are perhaps more widely used and more suitable for such purposes.

It is cited in various studies and reports that show that the majority of crypto transactions are legitimate and legal and that only a small fraction of them, around one per cent, is associated with criminal and illicit activities.

I would also argue that Tether is not as anonymous and untraceable as the report suggests and that it is possible to track and monitor Tether transactions using blockchain analysis tools and techniques. They point out that Tether transactions are recorded on public ledgers, such as the Bitcoin, Ethereum and Tron blockchains, and that they can be linked to real-world identities and entities using various methods, such as IP addresses, wallet addresses, exchange accounts, KYC information and network activity.

It also contends that bad actors can use other cryptocurrencies and techniques to evade detection and regulation and that Tether is not the only or the best option for them. They mention the use of privacy coins, such as Monero and Zcash, which offer enhanced anonymity and obfuscation features, such as stealth addresses, ring signatures, zero-knowledge proofs and confidential transactions.

They also mention the use of crypto mixers, such as Tornado Cash and Wasabi, which offer decentralised and trustless solutions for mixing and tumbling coins, making it harder to trace their origin and destination.

What is my opinion on the matter?

Based on my research and analysis, I think that the UN report has some merit and validity, but it also has some flaws and limitations. I think that Tether is indeed a popular and convenient tool for some criminals, money launderers and scammers, especially in East and Southeast Asia, where there is a high demand and supply for crypto services and products and where there is a lack of effective and consistent regulation and enforcement.

I think that Tether’s features and benefits, such as its stability, ease of use, low cost and global reach, also make it attractive and useful for such actors, who can exploit its loopholes and weaknesses to their advantage.

However, I also think that the UN report is not conclusive and definitive and that it does not capture the whole and true picture of the crypto landscape and the role of Tether in it. I think that Tether is not the only or the most preferred currency for illicit activities and that other cryptocurrencies and techniques are more widely used and more suitable for such purposes.

I think that Tether is not as anonymous and untraceable as the report suggests and that it is possible to track and monitor Tether transactions using blockchain analysis tools and techniques. I think that the UN report is based on anecdotal evidence, selective cases and biased sources and that it does not provide comprehensive and accurate data and analysis on the issue.

To stay within my argument, here is some food for thought — Tether has conducted the biggest-ever USDT freeze of US$225 million linked to a human trafficking syndicate. They worked hand in hand on this occasion with leading crypto exchanges, OKX and DOJ. This shows Tether’s willingness to help the industry and, to a certain extent, stay accountable and transparent.

Therefore, my opinion is that it is not fair or accurate to label it as the crypto of choice for criminals. I think that Tether has a legitimate and valuable role and function in the crypto ecosystem and that it provides a stable and transparent alternative to volatile and unpredictable cryptocurrencies.

I think that Tether also has a lot of room and potential for improvement and innovation and that it can address and resolve its controversies and criticisms by enhancing its transparency and accountability, complying with relevant laws and regulations, and cooperating with authorities and stakeholders.

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A year ago, we highlighted the importance of businesses focusing on managing cloud costs for better profitability and sustained unit economics. Recently, we surveyed over one hundred customers and noticed a growing awareness of FinOps.

This mirrors the increased availability of literature, tools, and services in the market. Notably, Google Cloud introduced its FinOps hub, and early-stage FinOps startups globally raised over US$200 million to support growth.

At Searce, we’ve experienced a rise in demand for our FinOps services, managing cloud spending exceeding US$300 million as part of our managed services portfolio. Through our consulting services, we’ve noticed some emerging trends, and we’re excited to share them in this article.

In the above quadrant, marked in blue and orange, FinOps 101 addressed both low and high-effort, along with low savings areas:

• Achieving these often involves one-time activities and consulting, but we’ve identified a gap in sustaining overall estate optimisation.
• Our recommendations include implementing automated triggers, custom dashboards, or utilising tools like CoreStack and Ternary to ensure ongoing compliance.
• Additionally, the infographic above effectively addresses the need to enable a culture of cost consciousness throughout the solution creation process.

Application modernisation

Companies often migrate to the cloud without adapting their applications to be cloud-native, which results in them missing out on huge benefits. To unlock high-impact savings, a prime focus should be modernising application architecture. This involves an initial investment and requires a thorough discovery process with a solid business case.

Also Read: Debunking misconceptions about FinOps and cloud spending reduction

The option here can be:

• Refactoring: making small to medium-level application architecture changes using the current code base (e.g., transitioning from monolith to microservices, adopting a cloud-native API gateway, or utilising modern stacks like Firestore and Supabase).
• Redevelopment: Sometimes, the business case supports the redevelopment of the entire application due to a change in business requirements or technical debt accumulated. While this requires high upfront investment, it drives the best outcomes and can be done in phases. For example — we redeveloped a customer-facing application for a large telco, leading to an 80 per cent reduction in cloud storage cost.
• Challenges in modernising legacy applications arise because they rely on third-party vendors. There is an opportunity here involving pushing the vendor for updates or considering better cloud-native alternatives.

Automation: Infrastructure, deployment, testing, platform

Did you know that 60 per cent of any organisation’s IT budget goes into paying people and service vendors to get the work done? Surprisingly, when companies look into exploring FinOps, they often overlook this critical component in their cost structure. While digital native companies excel in this due to their cloud-native application development, enterprises find it challenging.

This can be curbed by using:

• Using Terraform to reduce infrastructure deployment time, making time to market faster.
• DevOps automation to bridge the gap between the development and infrastructure management teams. This means more releases, fewer weekend toils for developers, and lower costs for issue resolution.
• Testing automation to speed up the testing process with improved accuracy, reliability and overall quality. Testing automation reduces the time to run repetitive tests from days to hours, which translates directly into significant cost savings. Another major advantage includes an early identification of issues to avoid last-minute surprises. Overall, this helps reduce the time to market for any new or updated services in an optimised way.
• Platform and DevTooling — In large enterprises, tech teams often spend a lot of time developing components that other teams in different units have already developed.

The problem? Low reusability of code and tools. But, with cloud technology, platform engineering steps in to maximise business value. This reduces redundancy in development, enhances the developer experience, and handles overall technology debt. Take Spotify, for instance, which has developed Backstage.io, an open-sourced platform engineering approach for anyone to adopt easily.

It’s clear from our observations that mastering FinOps isn’t a destination. It’s a transformation journey powered by modernised applications and automated processes. Embrace continuous optimisation, unlock hidden savings, and watch your cloud become a cost-cutting superpower, propelling you to new heights of profitability and agility.

This article has been co-authored by Varun Mahajan, Marketing Business Partner at Searce. 

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Genetic Design and Manufacturing Corporation (GDMC), a design and manufacturing organisation focusing on next-generation advanced genetic therapies, has secured US$21 million in Series A funding.

Asian private equity firm Celadon Partners led the round, which also saw participation from WI Harper Group, SEEDS Capital, and NSG Ventures.

The funds will be used to accelerate novel technology and process efficiency improvements to drive greater manufacturing cost reductions for partners who aim to advance medicines through clinical trials and towards commercialisation.

Also Read: How NSG BioLabs aims to nurture biotech innovation in Singapore and beyond

CEO and Co-Founder Michael Koeris said: “With our recent funding, we aspire to cultivate stronger collaborations with more partners in the US and APAC region, working hand in hand to improve the state of healthcare and treatment for patients.”

Established in 2021 by Koeris, GDMC focuses on manufacturing advanced therapy modalities, including customised mRNA, plasmid DNA, AAV and Lentiviral Vectors. It has developed a Partnership for Drug Manufacturing Organisation model, offering support to companies, including startups, from drug design to being the one-stop shop for innovators from design and manufacturing to quality assurance and regulatory support for eventual market entry.

It has initiated construction on a 155,000 sq ft pre-clinical, clinical, and commercial facility supporting Cell, Gene, and Nucleic Acid Therapies (CGNT). It can help generate purpose-developed technologies to accelerate next-generation medicine design tools while leveraging Machine Learning to generate novel toolkits to overcome current challenges in manufacturing.

Also Read: Biotech is set to push new frontiers in precision oncology therapeutics

GDMC’s partnership approach is centred on improving genetic medicine design and development through synthetic biology and focusing on three market-relevant pillars: success-based partnerships with sponsors, technical innovation, and significantly lower cost of goods.

The team has already signed its first clients and is taking reservations for the clinical and commercial facilities expected to open in a staggered format from 2024 to 2027.

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X marks Echelon. Join us at Singapore EXPO on May 15-16 for the 10th edition of Asia’s leading tech and startup conference. Enjoy 2 days of building connections with potential investors, partners, and customers, exploring innovation, and sharing insights with 8,000+ key decision-makers of Asia’s tech ecosystem. Get your tickets here.

Want more from your Echelon experience? Be an Echelon X sponsor or exhibitor. Send enquiry here.

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As Indonesia stands on the precipice of the crucial presidential and parliamentary elections on February 14, 2024, safeguarding our democratic process is not just about securing ballot boxes but also about protecting our digital landscape.

In an era dominated by technology, the looming threat of cyberattacks poses a significant challenge, demanding our attention and collective vigilance. This article aims to unravel the intricacies of cyber threats, shedding light on potential risks, sharing real-life examples, and offering practical tips to fortify our digital democracy.

Demystifying a spectrum of cyber threats

Digital disinformation campaigns

Beyond spreading false narratives, cyber attackers may orchestrate sophisticated disinformation campaigns to sway public opinion. Manipulative content can surface across various online platforms, making it essential for citizens to critically evaluate information and distinguish fact from fiction.

Phishing expeditions

Phishing attacks extend beyond deceitful emails to include fraudulent websites and malicious messages. As the election season unfolds, cybercriminals may exploit the excitement, sending phishing lures that mimic official communication. Vigilance and scepticism are crucial to thwart these digital fishing expeditions.

Ransomware strikes

The threat of ransomware is not confined to encrypting files; it extends to disrupting critical systems integral to the election process. A well-timed ransomware attack could cripple election infrastructure, highlighting the importance of robust cybersecurity measures to ensure the integrity of the electoral system.

Deepfake manipulation

Deepfake technology allows malicious actors to create realistic yet entirely fabricated audio and video content. During the election, politicians and public figures could be targeted with manipulated media, leading to misinformation and potential reputational damage. Awareness and media literacy are vital defences against this evolving threat.

Denial-of-Service (DDoS) attacks

Imagine a traffic jam on the digital highway. DDoS attacks can overwhelm online platforms, rendering them inaccessible. Political party websites, news outlets, or election commission portals may become targets, disrupting the flow of information. Ensuring the resilience of digital infrastructure is essential to counter these virtual traffic jams.

Also Read: Two decades of digital defence: Why cybersecurity must remain a top concern for everyone

Real stories, real lessons

The social media storm (2016 US election)

The 2016 US presidential election showcased the potency of disinformation campaigns on social media platforms. Understanding the impact of such campaigns emphasizes the need for a digitally literate electorate.

NotPetya’s ripple effect (2017)

The NotPetya ransomware attack in Ukraine demonstrated the interconnected nature of cyberspace. It underscored the importance of securing critical infrastructure against ransomware threats to protect national interests.

Practical steps for digital democracy

Media literacy education

Equip citizens with the skills to critically evaluate information, identify manipulated content, and discern the credibility of sources. Media literacy is a powerful tool against the spread of disinformation.

Enhanced cyber hygiene

Elevate cybersecurity practices by regularly updating software, employing robust antivirus solutions, and securing networks. A well-protected digital environment is more resilient against various cyber threats.

Multi-Factor Authentication (MFA)

Implement MFA across platforms to add an additional layer of protection against unauthorised access. This simple step can significantly enhance the security of personal and official accounts.

Collaborative threat intelligence

Foster collaboration between government agencies, political entities, and cybersecurity experts to share threat intelligence. Proactive information sharing can strengthen defences against evolving cyber threats.

Final thoughts

In the delicate dance between democracy and technology, comprehending the spectrum of cyber threats is imperative. By promoting digital awareness, enhancing cybersecurity practices, and fostering a resilient and vigilant digital community, Indonesia can navigate the cyber seas with confidence.

Let the 2024 elections stand as a testament to our commitment to a fair, transparent, and secure democratic process, both in the physical and virtual realms. Together, let’s fortify the heart of our democracy.

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In April this year, novice investors experienced the first crypto scare of their lives as prices of the biggest altcoins fell from the sky. Ether, the flagship token of the Ethereum platform, was down more than 56 per cent from its all-time high of nearly US$4,400 just earlier in the month.

This recent scare has spooked seasoned and amateur investors alike and sparked furious speculation on whether the price decline sign that digital currency has entered the bear market prematurely.

While many market gurus agree that the incident is a “healthy correction” and have expressed unwavering confidence in the continuous upward trend of the crypto market, amateur investors like myself are still understandably nervous.

What can we do better to cushion ourselves from violent swings like this in future?

Diversification is key when it comes to altcoins

You’ve probably heard of the saying, “Never put all of your eggs in one basket”. This simple nugget of wisdom was born from acknowledging the concept of risk in everyday life.

Just like how humans can never predict events in this world with a hundred per cent certainty, all investments, no matter how “stable” or “legitimate” they are, cannot be divorced from risk. Diversification is a simple strategy that seeks to mitigate risk by balancing your investment portfolio across different assets.

Also Read: Bitcoin vs Altcoins: Which is the better investment?

The fundamental logic of diversification applies to every level of your investment portfolio. First and foremost, it is only wise to spread your investments across different asset categories, such as stocks, bonds, cryptocurrency, and cash. The specific asset mix that works for you is highly personal, depending on your risk appetite and time horizon.

To determine your mix, it is best to consult investing materials online and maintain an organised Excel sheet to get a good view of your current investments.

Are you diversifying?

Once you have balanced your investment portfolio across asset categories, the same must be done within each category. This is especially critical for cryptocurrencies because of their greater market volatility.

A quick search on YouTube will return tons of “how-to” videos teaching novice investors how to balance their crypto portfolios across bigger coins like ETH and altcoins, which require careful management.

These gurus claim that by investing in 10 different coins, you diversify your investments and reduce the risk of completely wiping out your portfolio from an unexpected market dip.

The recent incident should have poked holes into this investing tip. Across the board, prices for most coins fell drastically. My portfolio, which I believed was “diversified” across six different coins, lost more than thirty per cent of its value overnight.

While the coins varied in their percentage dips, spreading my investments across different coins did little to cushion the impact.

With an almost dizzying array of cryptocurrencies running on different blockchain networks and boasting various capabilities, it’s normal to think that these currencies are starkly other than one another. However, even though these coins grow at different rates, analysts have found that prices of the top 30 cryptocurrencies are strongly correlated with one another.

Also Read: Mobee launches crypto exchange in Indonesia, secures funding

There is also evidence that some lower-ranked altcoins are affected by the prices of larger coins. This means that when the price of one coin increases (especially the big ones), it is highly likely that the price of other coins will increase as well.

Sadly, the opposite is true, so you are not diversifying if most of your portfolio is only spread across the top coins.

If even buying altcoins does not work, does this mean we must make a foray into the world of “shitcoins” to diversify our portfolio truly?

DeFi investment projects

Fortunately, there is a smarter way to go about this. Rather than taking considerable risks to buy “shitcoins” that may or may not be fake, the recent explosion of decentralised finance (DeFi) projects present many exciting opportunities to diversify and grow your crypto portfolio.

Some of these projects are excellent candidates for diversification because they are stable and generally unaffected by the crypto market. Let’s take a closer look at one such durable DeFi investment product — real-world asset-based loans.

A real asset-based loan is a loan offered to the borrower based on their tangible assets’ values. Assets that businesses can use as loan collateral include equipment, inventories, and account receivables.

In case of a loan default, loaners will liquidate these assets to recover the loans they provided.

Because asset-based lending is based on the value of collateralised assets, asset values are usually stable and do not respond to market swings, even throughout fluctuating economic cycles.

Since interest rates are generated from real-world businesses and assets, investors in such DeFi projects can receive fixed-rate interest from their investments independent of market changes in the crypto world.

Traditionally, real-asset based lending is mostly available exclusively for hedge funds or private equity firms. However, DeFi technology has now made real asset-based loans available as an attractive option to investors who wish to reduce the risk of overexposing their portfolios due to market volatility in the crypto space.

#Tokenizetheworld

When it comes to investing, maintaining a diversified portfolio is half the battle won. Unfortunately, many of us fall into the trap of believing that our portfolios are diversified simply because of our different bear names’ cryptocurrencies.

It is essential that we do our homework and read more widely to rebalance our investment portfolio from time to time.

If you’re not careful, a single tweet from Elon Musk could wipe out your hard-earned investments just like that.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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This article was first published on December 1, 2021.

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