The U.S. Department of Justice (DOJ) has charged a Venezuelan national, 59-year old Jorge Figueira, with laundering around $1 billion of illicit funds on behalf of criminals. Figueira is alleged to have used multiple bank accounts, crypto exchange accounts, crypto wallets, and shell companies to conduct his money laundering operation.
“The FBI has identified approximately a billion dollars’ worth of cryptocurrency that was passed through crypto wallets utilized by Figueira and his laundering operation to individuals and businesses throughout the world,” said FBI Special Agent Reid Davis according to a DOJ press release.
Court documents say Figueira mainly conducted his crypto activities in the stablecoin issued by Tether, known as USDT, on the Tron blockchain. A recent report released by blockchain analysis firm Chainalysis found that stablecoins are becoming increasingly used in illicit crypto transactions, now accounting for 84% of such transactions after only amounting to roughly 12% of that activity in 2020. The report also indicated last year’s record year of $154 billion in illicit crypto transfers was mostly due to use by nation states, such as Iran and Venezuela, to avoid sanctions.
According to a report in DL News, Figueira is quoted touting the benefits of using USDT for money laundering on a phone call cited in court documents. “Let me be clear with you, [USDT] is used a lot for laundering money,” Figueira is quoted as saying.
Notably, Tron is also the crypto network founded by Justin Sun, who is at the heart of pay-to-play allegations made by House Democrats against the SEC due to Sun’s involvement with multiple crypto projects linked to President Trump. Tron is generally viewed as a more centralized little brother to Ethereum; however, it is widely used for USDT transfers due to offering faster and cheaper transactions.
In addition to the $1 billion in illicit crypto processing identified by the DOJ, court documents indicate Figueira was also bragging about processing up to $700 million worth of illicit funds on a monthly basis. The Venezuelan man faces a maximum of 20 years in prison related to the charges.
The heavy use of crypto in Venezuela by both the regime and its citizens is well-documented. Roughly a week ago, Tether froze $182 million worth of USDT around the same time a detailed report on Venezuela’s use of the stablecoin to avoid economic sanctions was released in The Wall Street Journal.
Crypto can be a double-edged sword for authoritarian regimes, as another recent report pointed to the massive increase in withdrawals from centralized crypto exchanges to the non-custodial Bitcoin network in Iran are a sign people are opting out of the traditional financial system in an effort to avoid the devaluation of the Iranian rial and potential capital controls amid nationwide protests. In other words, authoritarian regimes use crypto to avoid restrictions imposed by other nations (namely the United States), and the people living under those regimes use crypto to avoid restrictions imposed locally on them.
The crypto industry has become increasingly centralized around stablecoins like USDT, despite their growing use for illicit purposes. The GENIUS Act created a regulatory structure for these dollar-pegged tokens in the United States last year, and the Trump-affiliated World Liberty Financial has its own stablecoin, USD1, which is at the center of another pay-for-play allegation associated with the pardon of the former CEO of crypto exchange Binance.
Everyone from large tech giants to traditional banks are now interested in launching stablecoins, but whether they’ll be allowed to move around freely despite continued criminal use remains to be seen. Then again, legal action like that taken against Figueira indicates there are plenty of eyes tracking the movement of stablecoins on the blockchain anyway, and Tether has made it clear that it’s actively working with many law enforcement agencies around the world on a regular basis to guard against criminal activity.
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