The stablecoin is fuelling a global shadow economy. And it’s never been more respectable

(Excerpt shown below. To read full report, go to: https://www.economist.com/1843/2025/07/04/how-tether-became-money-launderers-dream-currency OR https://archive.ph/RGqy6)

Reported by Oliver Bullough

What may be the most consequential cryptocurrency investigation in recent times began on a November evening in 2021 in a defiantly offline location: the southbound carriageway of Britain’s m1 motorway. Metropolitan Police officers suspected a driver was carrying illicit cash, and pulled him over as he approached London.

Bodycam footage shows the driver, Fawad Saiedi, sitting in the backseat of an unmarked police vehicle, his hands cuffed in his lap, a slightly sullen look on his face, while two officers search the boot of his car. Their tip-off had been accurate. The officers found more than £250,000 ($340,000) in cash, each bundle of notes wrapped with the denomination it contained – mostly tens and twenties, with a few fifties thrown in.

Police officers were pleased with the haul, but well aware that it was only a small victory in their campaign against organised criminals. The drugs trade in Britain generates £10bn a year, so this bust didn’t even amount to 1% of a single day’s takings.

It was what they found on Saiedi’s phone that transformed his arrest from another footnote in the never-ending war on drugs. “We inadvertently turned over a stone, and went down the deepest, darkest hole for three years,” said William Lyne, head of cyber-intelligence at the National Crime Agency (nca).

Drug gangs all over the world face the same problem: how to make use of their cash. They can’t just deposit notes in a bank, owing to rules against money-laundering, so they need to find someone to take the money off their hands and render it clean. Police officers knew that Saiedi would be part of a bigger organisation tasked with moving dirty money back into the legitimate economy. But when they discovered who he was working with, they were astonished.

Ekaterina Zhdanova is a Russian businesswoman, originally from Siberia. A glamorous socialite, she promoted her own luxury watch brand, and was reported to have the personal motto: “Love yourself. Appreciate yourself. Look only forward and dream”.

To worldwide law-enforcement authorities, however, she was becoming known as someone who helped computer-hackers spend their money. When ransomware gangs extort money, they are typically paid in cryptocurrencies such as bitcoin. Bitcoin has a publicly available ledger, which means anyone can track the path of money from one digital wallet to another, even though they may not know the real-world identities of recipients. This makes it hard for successful hackers to enjoy their loot below the radar of law-enforcement. Theoretically, they could cash out their tokens at an official crypto-exchange, but large sums would draw unwelcome attention.