On September 10, blockchain forensic firm TRM Labs, stablecoin issuer Tether, and TRON announced a strategic partnership to combat illicit USDT transactions on the TRON blockchain. This partnership is known as the T3 Financial Crime Unit (FCU).
The collaboration employs law enforcement efforts and advanced technology to identify and dismantle criminal networks that exploit USDT for unlawful activities.
TRON, TRM Labs, and Tether FCU’s Objective to Combat Financial Crime
The T3 Financial Crime Unit (FCU) is intended to disrupt criminal activities by employing real-time data and advanced analytics to monitor illicit flows of USDT, as stated in the press release.
Justin Sun, the founder of TRON, stated, “Through its partnership with TRM Labs and Tether, TRON guarantees that blockchain technology is advantageous to society while simultaneously emphasizing that illicit activities will not be tolerated.”
TRON’s extensive ecosystem, which consists of over 240 million users and 8.4 billion transactions, is essential in preventing the platform from becoming a center for illicit activities.
Although TRON’s low fees and stability are advantageous for its legitimate users, they have also attracted the attention of criminals, including terrorists, money launderers, and fraudsters.
In March, Crypto News reported that USDT was involved in over $19 billion worth of illicit funds in 2023, surpassing other stablecoins due to its prevalence in terrorist financing. TRON was accountable for 45% of all illicit crypto transactions, a significant increase from the 41% it accounted for the previous year.
The preferred stablecoin for terrorist financing is now Tether USDT, surpassing USD Coin (USDC), which had $428.9 million in illicit volume.
The T3 FCU was established due to the growing number of illicit USDT transactions. The unit has already suspended USDT valued at more than $12 million associated with scams, such as blackmail and fraud schemes.
The unit has collaborated with global law enforcement agencies from the U.K., U.S., and Australia and has identified 11 victims. Additional victims are likely to be discovered as investigations continue.
USDC TRON Risks Concern And Tether’s Dominance Despite Challenges
In a related development, Circle, the issuer of USDC, announced earlier this year that it would discontinue the production of USDC on TRON.
Circle cited risk management concerns consistent with the broader regulatory scrutiny of TRON’s alleged involvement in money laundering schemes.
Circle has been implicated in the facilitation of terrorist funding, as evidenced by a letter sent to U.S. Senators Elizabeth Warren and Sherrod Brown by the non-profit investigative organization Campaign for Accountability. The letter explicitly mentions transactions that took place on the TRON blockchain.
Despite these concerns, Tether is actively issuing USDT on the network, and TRON continues to play a prominent role in the stablecoin market.
Tether further solidified its position in the global stablecoin circulation by minting an additional $1 billion in USDT on the TRON blockchain in August.
This increases Tether’s total USDT minting for the year to $33 billion, with 19 billion minting on TRON and 14 billion on Ethereum.
With a circulating supply of $60 billion on the network, TRON is the dominant blockchain for USDT transactions due to its fixed transaction fee of $1.
