Tron-Linked Terrorist Financing Skyrockets, Tether Usage Rife

The use of Tron blockchain for terrorist financing activities surged in 2023, with a 125% increase in Tether (USDT) addresses associated with such activities. Despite a decline in overall illicit crypto funds, Tron's transaction volume involving illicit activities quadrupled, with Bitcoin remaining popular for drug sales and USDT on Tron becoming the preferred currency for terrorist financing. Tron's low transaction fees and high speed, along with the availability of USDT, contribute to its popularity among illicit actors.

Tron-Linked Terrorist Financing Activities Surge, Tether Use Prevalent

A recent report has revealed a significant increase in the number of blockchain addresses associated with terrorist financing activities on the Tron network that have received the stablecoin Tether (USDT). According to TRM Labs, a leading provider of blockchain intelligence, the number of such addresses surged by 125% in 2023. Notably, Tether remains the most prevalent stablecoin utilized in illicit operations.

While Bitcoin still dominates the crypto sphere for drug transactions, the transaction volume on the Tron blockchain has experienced a substantial rise, exceeding a fourfold increase since the previous year. Additionally, Tron's native token, TRX, has witnessed a remarkable growth in illicit transactions, with a nearly tenfold increase in volume.

Experts attribute Tron's popularity among illicit actors to several factors, including its low transaction fees and high speed, which facilitate efficient and cost-effective money laundering operations. Furthermore, the availability of stablecoins like USDT on the Tron blockchain provides an added layer of convenience for criminals. USDT on Tron has emerged as the preferred currency for terrorist financing entities.

Tron and Tether have not yet responded to requests for comment on the findings. However, both entities have faced increasing scrutiny in recent years. Tron's founder, Justin Sun, and the company have drawn controversy due to allegations of unregistered sales of crypto assets and market manipulation.

Circle, the operator of the second-largest stablecoin, USDC, recently announced its decision to discontinue support for the Tron blockchain due to risk management considerations.

Despite the surge in illicit activities on Tron, the overall proportion of illegal funds in the crypto ecosystem has diminished by 9% in 2023, with the total volume decreasing by approximately one-third. TRM Labs attributes this decline to heightened enforcement efforts by governments and increased sanctions against individuals and entities involved in crypto-related crimes.