The volume of illegal transactions with the asset amounted to $19,3 billion

TRM Labs: 1,6% of USDT volume was linked to criminal activity in 2023

28.03.2024 - 09:45

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4 min

What’s new? USDT from the issuer Tether in 2023 was the most frequently used in criminal activity stablecoin. The asset ranks third in the overall cryptocurrency ranking and leads the stablecoin segment with a record $104,64 billion capitalization in its history. According to a report by blockchain analytics firm TRM Labs, USDT, issued on the TRON blockchain created by Justin Sun, head of HTX and Poloniex crypto exchanges, “cemented its position as the currency of choice for use by terrorist financing entities”

Material by Bloomberg

What else is known? In the past year, USDT was involved in illegal transactions worth $19,3 billion, compared to the previous year, this amount decreased by $5,4 billion. During the same period, Circle’s USDC, which is the second most capitalized stablecoin, amounted to $428,9 million.

Overall, about 1,6% of USDT volume in 2023 was related to criminal activity, for USDC the figure was only 0,05%.

In March this year, the volume of USDT in circulation crossed the $100 billion mark for the first time, over the year the asset’s capitalization grew by 255%. According to DefiLlama, the share of USDT in the stablecoin sector, which is generally estimated at $150 billion, is about 70%.

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A Tether representative said in a Bloomberg commentary that the data taken for the report could have been misinterpreted and overstated. According to him, the analysts could have mistakenly considered all the funds in a particular service illegal, even if in reality they were only a small part, which has happened many times before.

Earlier, the US authorities accused Tether of involvement in the collection of funds for Hamas, referring to data on the volume of transactions, cited by WSJ journalists with reference to analysts at Elliptic. Elliptic itself said that the journalists distorted their data, and Tether made a similar statement.

Later, the UN in its report called USDT one of the most popular tools for money laundering in Southeast Asia. In response, Tether offered to cooperate in developing measures to combat financial crimes, adding that the UN staff did not know the principles of blockchain technology.

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Also late last year, analysts pointed to the growing popularity of TRON among terrorists, with USDT being the dominant asset on the blockchain. According to a new report from TRM Labs, TRON accounted for 45% of total criminal cryptocurrency flows last year, with Ethereum and Bitcoin accounting for 24% and 18%, respectively.

In addition, the TRON blockchain saw a 125% increase in the number of addresses linked to terrorist financing that received USDT transfers in 2023.

Overall, TRM writes, the total amount of illicit funds in cryptocurrency fell from $49,5 billion to $34,8 billion in one year, helped by sanctions against businesses and individuals linked to cryptocurrency.

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