Cryptocurrency has been hailed as the financial revolution of our time, but with great power comes great responsibility—or in some cases, great criminal ingenuity. Tether (USDT), a stablecoin pegged to the US dollar, has become a go-to tool for Mexican and Colombian drug cartels looking to launder millions of dollars, according to unsealed court records. Let’s unpack how a digital asset designed for transparency and stability found itself deep in the murky world of global narcotics.

In a notable advancement for the cryptocurrency community, Tether has integrated its US Dollar...