A new report from the Global Initiative Against Transnational Organized Crime has shed light on how criminal networks involved in illegal gold mining in the Amazon are increasingly turning to cryptocurrency like USDT to settle payments.
According to the report, the stablecoin Tether (USDT) is being used in some transactions connected to illicit gold trade flowing through Venezuela.
Illegal mining is a common issue in the Amazon rainforest region. In these remote areas, criminal organizations are involved in illegal mining, especially for gold, without the involvement of the government, which has caused harm to the environment.
The extracted gold is then passed through a network of traders, smugglers, and others before it is laundered into the mainstream markets.
USDT becomes new way for settling illegal trade
The latest findings suggest that Venezuela has increasingly become an important destination for gold coming from illegal mining operations in the Amazon region.
Over the past two years, investigators say more shipments of illicit gold have been routed into the country, where buyers are willing to pay competitive prices for the precious metal.
Part of this trade also involves gold originating from Guyana. According to the report, some of these transactions are now being settled locally using USDT rather than traditional payment methods.
In simple terms, instead of paying in cash or using bank transfers, traders exchange gold for digital tokens pegged to the U.S. dollar.
Why USDT for illegal trade?
For those who are involved in the trade, stablecoins have a number of benefits.For example, cryptocurrencies can be used as a means of payment, which can take a short time and often across international borders. All this is done without the use of banks, which can identify suspicious transactions.
Venezuela’s economic situation is a contributing factor to the use of crypto in illegal trade. The country has experienced economic instability, hyperinflation, and sanctions, which have affected the access of its citizens to foreign currency as well as the banking system.
Gold is a major contributor to the economy of Venezuela. According to the report, the gold industry in the country was estimated to have generated around $2.2 billion in revenue last year, which shows how valuable the gold industry is to the country.
However, the gold industry in Venezuela is not without its problems, as a portion of the gold trade is believed to come from illegal mines operated by criminals.
For investigators, the report reveals a major problem. The illegal mining and smuggling of resources are increasingly being linked to modern financial technology.
As cryptocurrencies become more common in global trade, authorities worry that they could also make it easier for organized crime networks to move and disguise the profits generated from environmental exploitation.