Nearly half of all illicit cryptocurrency transactions in 2023 were conducted on the TRON (TRX-USD) network, according to a recent report by TRM Labs. This highlights a growing concern over the use of digital currencies in illegal activities. This revelation puts the TRON blockchain, founded by Justin Sun, at the center of the so-called “dirty crypto” economy, with a 45% share of illicit transactions, marking an increase from the previous year.
The TRM Labs study “The Illicit Crypto Economy” outlines a worrying trend: TRON’s share of illicit transactions rose from 41% in 2022 to 45% in 2023. This puts it ahead of Ethereum (ETH-USD) and Bitcoin (BTC-USD), which accounted for 24% and 18% of illegal activities, respectively.
The report identifies Tether (USDT-USD) as the stablecoin most associated with illicit volumes, pointing out that USDT transactions on TRON are particularly favored by those involved in terrorism financing and by hackers, especially those linked to North Korea.
The Role of Tether in Illicit Transactions
Tether has been pinpointed as the stablecoin of choice for illegal transactions, with over $19 billion of its volume implicated in illicit activities. In contrast, USD Coin (USDC-USD) saw a significantly lower amount of $428.9 million involved in such transactions. Additionally, while Circle did not highlight reasons why, it did suspend support for USDC on TRON in early February 2024.
In response to these challenges, the report highlights efforts by governments and law enforcement agencies worldwide to clamp down on illegal crypto activities, leading to a decline in the volume of hacked and sanctions-exposed funds.
Tether, for its part, has reiterated its commitment to anti-money laundering (AML) regulations and has detailed its cooperation with U.S. authorities, including the IRS, DOJ, Secret Service, and FBI, in efforts to combat global terrorism and other criminal uses of cryptocurrency.
The Bigger Picture of Crypto Crime
Despite the concerning figures related to TRON and USDT, the TRM Labs report also notes a 9% reduction in overall illicit crypto volumes from 2022 to 2023. However, certain areas, such as the sale of illicit drugs on darknet marketplaces, have seen an increase.
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