Risky flow of TRC20 USDT into OTC addresses


Blockchain analytics firm Bitrace has reported that over the past 24 months, more than 3.439 billion risky TRC20 USDT has flowed into OTC addresses. This includes 14.7% of online gambling-related USDT, 20.1% of scam industry-related USDT, and 19.4% of money laundering-related USDT.

Bitrace monitors the flow of funds to and from addresses of major illicit platforms in Southeast Asia, identifying cryptocurrency funds related to illegal activities such as online gambling, fraud, money laundering, theft, extortion, and terrorism. In 2022 alone, over $115 billion USDT flowed into addresses related to certain Southeast Asian platforms.

The risk of tainted addresses

Receiving USDT from such addresses and their associated addresses can contaminate the recipient’s address. This makes the address funds more susceptible to risk control by centralized platforms and could even expose investors to investigations by law enforcement agencies.

In 2022, more than $14.64 billion USDT was contaminated, flowing directly or indirectly into centralized trading platforms from known Southeast Asian entity-associated addresses. This includes $7.71 billion USDT in online gambling funds, $4.86 billion USDT in money laundering funds, $1.88 billion USDT in other illegal activity funds, and a small amount of USDT ($190 million) related to fraud.

Risk transfer to several addresses

The flow of USDT has transferred risks to more addresses and platforms, making them passively associated with transactions on illegal platforms. This situation raises concerns for investors who interact with these platforms.

Investors are advised to exercise extreme caution when dealing with these platforms, especially when it comes to withdrawals and deposits. Regulatory bodies are likely to take this incident into account as they ramp up efforts to bring more transparency and security to the crypto market.

In conclusion, the findings by Bitrace highlight the multi-dimensional risks involved in crypto investments. It is not just the volatility of assets but also the integrity of platforms that investors must scrutinize.


Author: Kamma

Kamma is passionate about the prospects of blockchain and the freedom cryptocurrencies afford people across borders. He holds small amounts of bitcoin and tether.