Almost half of last year’s illegal cryptocurrency trading volume occurred on Justin Sun’s Tron, according to report

Although the total volume of illicit cryptocurrency transactions around the world fell last year, crime-linked funds are increasingly favoring Chinese crypto tycoon Justin Sun’s Tron blockchain, a new report finds.

In 2023, the Tron blockchain will host 45% of all illegal cryptocurrency transaction volume, up from 41% in 2022, according to a research report released by blockchain analysis firm TRM Labs on Wednesday.

The company said Tron’s use has become more prominent in both drug sales and terrorist financing.

The number of blockchain addresses associated with terrorist financing activities on Tron that received stablecoin Tether (USDT) increased by 125 percent in 2023, according to the report. According to TRM Labs, Tether remains the most used stablecoin in criminal activity.

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According to the company, while Bitcoin remains dominant in pharmaceutical sales, the volume of transactions using the TRON blockchain has “more than quadrupled” compared to the year before last.

Bitcoin also remains the most popular cryptocurrency choice for online fentanyl sellers, but the TRON token TRX recorded the highest growth, with trading volumes increasing nearly 10 times, TRM Institute also said.

There are many factors that lead illegal actors to choose blockchain, but TRM’s popularity is likely due to its low transaction fees and high speed, which “allows money laundering to be done cheaply and quickly,” TRM said. said Angela Ang, senior policy advisor at the institute. Post by email.

She said the availability of stablecoins like USDT on the Tron blockchain could be another factor, saying USDT on Tron is the currency of choice for terrorist financing groups. It pointed out.

Tron and Tether did not respond to requests for comment.

Tron, launched by Chinese cryptocurrency entrepreneur Justin Sun in 2017 just before the Chinese government banned new coin offerings, has become increasingly controversial in recent years along with its founder.

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Last year, the U.S. Securities and Exchange Commission announced charges against his companies, including Sun and the Tron Foundation, including unregistered offerings and sales of crypto-asset securities and manipulation of the TRX secondary market through wash trading.

Circle, which operates the world’s second-largest stablecoin USDC, announced last month that it would discontinue support for the Tron blockchain due to risk management considerations.

TRM Labs noted that in 2023 as a whole, the proportion of total illicit funds in the cryptocurrency ecosystem shrank by 9% year-on-year, with the total volume decreasing by one-third. The company said the decline in illegal trading volume is related to increased government enforcement and an increase in the number of crypto-related entities and individuals sanctioned by the U.S. government last year.