USDT money laundering: a US sentence and amounts that must be distinguished

A sentence announced on 21 October

On 21 October 2026, the US Attorney's Office for the Southern District of New York announced a 160-month prison sentence for Leonardo de Jesus Zuluaga Duque, known as Rey. Its release describes a Colombia-based cryptocurrency broker with a supervisory role in a laundering network. The account draws on charging documents, statements made in court and public court filings.

The origin of this account matters when assessing precisely what the information establishes and how far its conclusions can legitimately be extended. The release reports a judicial decision concerning identified people and operations. It does not measure the proportion of stablecoin transfers that are unlawful. Moving from an individual case to a conclusion about all users would require a different set of data.

Two financial scopes that must not be added together

According to prosecutors, operations involving Zuluaga Duque and several accomplices concerned approximately $14.5 million in Tether derived from drug trafficking between May and November 2023. Proceeds were converted into tokens, transferred to an intermediary and converted back into dollars. US and Colombian shell companies subsequently participated in returning funds to Colombia.

The release separately mentions Maximilien de Hoop Cartier, who operated an unlicensed money-transmitting business. He had previously received an eight-year prison sentence for conduct including fraud against US banks and transmission of more than $470 million in illicit proceeds. This total covers his wider operations: it must not be attributed in its entirety to Zuluaga Duque.

A chain still connected with banks

The case combines crypto accounts, currency conversions and traditional companies. Moving a token on a blockchain therefore does not erase the other stages of the journey. The digital transfer, its conversion into dollars and the final payment in local currency are distinct operations involving different participants.

It would nevertheless be incorrect to infer that every service using a stablecoin escapes identity checks. The release describes an unauthorised business and schemes directed against the banking system. It does not establish a general exemption for platforms or issuers. Applicable obligations depend on the activity undertaken and the jurisdiction concerned.

Sentencing, forfeiture and restitution are different

In addition to imprisonment, prosecutors announce five years of supervised release and a forfeiture obligation of $14,751,846. They also mention tokens previously contained in four addresses controlled by the defendant. A court-imposed obligation and the assets actually recovered do not necessarily represent the same amount on the same date.

Nor should these elements be presented as reimbursement already distributed to victims. Forfeiture follows its own process; its destination cannot be inferred simply from the amount announced. The useful reading keeps together the date, person concerned, scope of operations and nature of each decision. The case documents an identified criminal use of USDT without turning that example into a statistic about the entire market.

Keeping the two defendants' financial scopes separate is equally necessary when describing the amounts mentioned by the authorities. An announcement about a judgment establishes what was ordered, rather than independently establishing that every sum ordered has already been collected or returned.