Crypto giant Tether promised careful vetting. Some early customers were later implicated in financial crimes.
During a two-month period in 2020, a Russian man named Nikita Krasnov purchased about $1.16 million worth of newly minted USDT — the widely used stablecoin made by the cryptocurrency company Tether. A little more than four years later, Krasnov was sanctioned by U.S. authorities for his role in an expansive sanctions evasion scheme catering to Russian elites.
It’s a story that repeats itself across Tether’s customer base. Tether’s USDT token, whose value is pegged 1-to-1 to the U.S. dollar, has become one of the most widely used types of cryptocurrency in illicit finance. But the 12-year-old company has long claimed that it does thorough due diligence on its primary customers — that is, the people and institutions who purchase USDT directly from Tether, rather than from secondary sources once the tokens are in general circulation. In a 2023 letter, Tether CEO Paolo Ardoino assured members of Congress that the company uses vetting practices that “you would see at sophisticated financial institutions,” such as reviewing customers’ sources of funds, sanctions lists and any other information that links them to illicit activity.
A set of Tether documents obtained by the International Consortium of Investigative Journalists suggests otherwise. The documents show who was buying USDT tokens from Tether during 2019 and 2020 — a key period of growth for the company, when its tokens in circulation rose from less than $2 billion to more than $20 billion.
Although several years old, the records give a rare look into exactly who was buying USDT from Tether. Among them were some possibly concerning clients. These included hundreds of millions of dollars in purchases by shell companies based in the Cayman Islands, British Virgin Islands, the Seychelles and Hong Kong. More significantly, ICIJ identified several actors later revealed to be involved with financial crimes who together bought tens of millions of tokens directly from Tether. Among them were firms later named as laundering vehicles for North Korean hackers and for the Sinaloa Cartel, which smuggles vast amounts of heroin and fentanyl into the United States.
https://www.icij.org/investigations/coin-laundry/the-200-billion-company-you-cant-look-inside/
CRYPTOCURRENCY The $200 billion company you can’t look inside Aug 07, 2026
Recommended reading CRYPTOCURRENCY Cryptocurrency giant Tether is wildly profitable. Can it do more to stop financial crime? Dec 01, 2025 CRYPTOCURRENCY The $200 billion company you can’t look inside Aug 07, 2026 CRYPTOCURRENCY Crypto giants moved billions linked to money launderers, drug traffickers and North Korean hackers Nov 17, 2025
Contact us Do you have more information? Send us a tip. Email the reporter
have been closed since” and that the regulatory actions had no bearing on the firm’s purchase of Tether tokens.
A company owned by Zhao Dong, a Chinese crypto trader and Bitfinex shareholder, received approximately $1.5 million worth of USDT over eight days in 2020. Chinese authorities later arrested him for suspected money laundering; he was convicted and spent several years in prison.
UKDE, which acquired roughly $867,000 worth of USDT, was the subject of a consumer warning from the U.K.’s financial regulatory authority in 2023 for providing unauthorized financial services. The company, which had raised at least $12 million in investment capital, has been liquidated, its phone number disconnected. If you go to its old website, ukde.com, you’ll be automatically forwarded to another site that reveals the fate of the former Tether client. It says: “This domain has been seized by the Bergen County Prosecutor’s Office, Financial Crimes Unit.”
