TRON Teams Up with Tether to Combat Illegal USDT Transactions
Date: 2024-09-11 Author: Gabriel Deangelo Categories: BUSINESS
TRON, the issuer of the Tether stablecoin, and blockchain analytics firm TRM Labs announced a strategic partnership on September 10 to launch the T3 Financial Crime Unit (FCU), which is aimed at combating illegal USDT transactions on the TRON blockchain.
The collaboration leverages cutting-edge technology and law enforcement efforts to identify and disrupt criminal networks that use USDT for illicit purposes.
TRON, TRM Labs, and Tether FCU’s Mission to Combat Financial Crimes
According to the press release, the T3 Financial Crime Unit (FCU) is designed to combat criminal activity using real-world data and advanced analytics to track illicit USDT flows.
TRON founder Justin Sun said, “Through our collaboration with TRM Labs and Tether, TRON is ensuring that blockchain technology benefits society while clearly showing that illegal activity will not be tolerated.”
TRON’s vast ecosystem, with over 240 million users and 8.4 billion transactions, plays a key role in preventing the platform from becoming a hub for illegal activity.
While TRON’s low fees and stability are beneficial to legitimate users, it has also attracted the attention of criminals such as terrorists, money launderers, and scammers.
According to a Cryptonews report in March, USDT was involved in over $19 billion in illicit funds in 2023, surpassing other stablecoins due to its popularity in terrorist financing. TRON accounts for 45% of all illicit crypto transactions, up from 41% the previous year.
Tether USDT is currently the preferred stablecoin for terrorist financing, ahead of USD Coin (USDC), which has seen $428.9 million in illicit transactions.
The increase in illicit USDT transactions has led to the creation of the T3 FCU. The unit has already frozen over $12 million in USDT linked to fraudulent schemes, including extortion and fraud.
Global law enforcement agencies from the UK, US, and Australia are working with the unit, which has identified 11 victims, with more expected to be uncovered as investigations continue.
USDC Risks on TRON and Tether Dominance Despite Challenges
In another development, USDC issuer Circle announced earlier this year that it would stop issuing USDC on the TRON blockchain.
Circle cited risk management concerns, consistent with heightened regulatory scrutiny over TRON’s alleged involvement in money laundering schemes.
The non-profit Campaign for Accountability sent a letter to U.S. Senators Elizabeth Warren and Sherrod Brown accusing Circle of facilitating terrorist financing, specifically citing transactions conducted on the TRON blockchain.
Despite these concerns, TRON continues to play a leading role in the stablecoin market, with Tether actively issuing USDT on the network.
In August, Tether issued an additional $1 billion in USDT on the TRON blockchain, further cementing its role in the global stablecoin circulation.
This brings Tether’s total USDT issuance in 2024 to $33 billion, with $19 billion issued on TRON and $14 billion on Ethereum.
A fixed transaction fee of $1 has made TRON the leading blockchain for USDT transactions, with a circulating supply of $60 billion on the network.
