Olympic snowboarder used Tether in cocaine trafficking murder scheme, feds say

The federal government has filed criminal charges against an Olympic snowboarder for his alleged role in a cocaine trafficking gang, which used the stablecoin. Tether (USDT) as a key part of its billion-dollar operation.

A U.S. Department of Justice (DOJ) indictment filed Thursday alleged that former professional snowboarder Ryan James Wedding and 15 other defendants ran a drug trafficking syndicate, shipping cocaine from Colombia through Mexico and to the United States and Canada.

The criminal gang committed several murders as part of its operation, US authorities claimed, and used cryptography to try to evade cops.

“Defendant Bonilla allegedly made payment to Defendants Wedding and Clark via cryptocurrency payment service Tether for two kilograms of cocaine,” the indictment states. He added that QR codes were sent to drug traffickers in order to receive payment in USDT.

The DOJ said it seized more than $3.2 million in cryptocurrency, as well as more than a ton of cocaine, three firearms, dozens of rounds of ammunition and $255,400 as part of the investigation.

The marriage is now underway, authorities said. The FBI is now offering a $50,000 reward for information leading to the arrest and extradition of Wedding, the 47-year-old who represented Canada at the 2002 Winter Olympics and recently in Mexico.

His Olympic biography said that the athlete “was convicted of attempting to purchase cocaine from a US government agent” in 2008 and was sentenced to four years in prison as a result.

“As the indictment alleges, an Olympic athlete turned drug lord is now accused of leading a transnational organized crime group that engaged in cocaine trafficking and murder, including of innocent civilians.” U.S. Attorney Martin Estrada said in a statement.

USDT is the third largest cryptocurrency by market capitalization and one of the most traded digital assets, with the second highest 24-hour trading volume after Bitcoin.

The token is important to the crypto ecosystem because it is used by traders to quickly enter and exit trades and to convert crypto to fiat through a traditional bank.

But cryptocurrency and the company that issues it are controversial: Tether was slow to provide documentation proving that US dollars repay USDT; U.S. regulators took issue with the fact that the entity was also not independently audited.

In 2021, Tether agreed to no longer do business in New York after a two-year investigation by the state’s attorney general found she “made false statements about supporting” her stablecoin.

However, the company regularly cites quarterly attestations and transparency reports as proof of its compliance, and has been work closely together with law enforcement to freeze funds suspected of being used by criminals.

Edited by Andrew Hayward