- Investigators connect flood control corruption funds to cryptocurrency laundering through Tether (USDT).
- Pogo-linked syndicates are suspected of using digital assets to obscure illicit financial transactions.
- The Philippine Anti-Money Laundering Council is focusing on crypto exchanges to curb illicit fund flows.
Investigators in the Philippines have discovered a link between the country’s massive flood control corruption scandal and cryptocurrency laundering schemes. Funds meant for flood control projects were allegedly funneled into cryptocurrency exchanges. The money trail appears to involve individuals connected to Philippine offshore gaming operators (Pogos) banned by the government last year.
According to a report by South China Morning Post, cybercrime authorities have reported finding digital assets tied to the flood control scandal linked to cryptocurrency scams. These funds were converted into digital assets, including Tether (USDT), a popular stablecoin. Investigators revealed that large sums of money, ranging from 50 million to 100 million pesos, were being moved into digital currencies.
Tether Used for Laundering Corrupt Funds
The use of Tether in the flood control scandal comes as no surprise. Tether (USDT) is widely used across Southeast Asia for crypto transactions. Luis Buenaventura, head of crypto at GCash, explained that USDT’s liquidity makes it ideal for large-scale transactions in the region.
Tether transactions in the Philippines have become a common method for laundering illicit funds. Investigators found that the funds linked to the corruption scandal were being funneled through multiple accounts. These accounts are believed to be operated by Pogo-linked syndicates, which have been involved in various illegal activities.
The Philippine Anti-Money Laundering Council has frozen accounts linked to these transactions. The council has focused on Tether and other digital currencies, highlighting their role in money laundering schemes. Renato Paraiso, acting executive director of the Cybercrime Investigation and Coordinating Centre, stated, “There’s a definite link between these transactions and the people involved in the corruption scandal.”
Crypto Channels Used for Corruption and Criminal Activities
Authorities have found that digital currencies are being increasingly used for illegal purposes. Cryptocurrency transactions have become the preferred method for laundering funds linked to crimes such as kidnapping and drug trafficking. Paraiso noted that launderers have been routing the money through various wallets and exchanges to obscure the trail.
Investigators also believe that casino junket operators are playing a role in the laundering process. Public works officials tied to the flood control corruption scheme have reportedly used casinos to convert their kickbacks into cryptocurrency. After cashing out the casino chips, the proceeds were deposited as winnings.
The trending use of cryptocurrencies for transferring illicit funds is presented through these methods. The situation is still under the watchful eyes of the authorities, but the non-regulation in the Philippines makes it hard to follow all the transactions. The crypto market in the country is still governed by loose regulations, which is a plus for criminals as they can take advantage of the system’s weaknesses.