Tether (USDT) Leads Cryptocurrencies in Illegal Transactions: TRM Labs

Published: Mar 27, 2024
Written By:
Vignesh Karunanidhi
Milk Road Writer

A recent report by blockchain analytics firm TRM Labs sheds light on the state of illicit activity within the cryptocurrency ecosystem in 2023. The report, titled “The Illicit Crypto Economy,” reveals that the total amount of illicit funds in the crypto space has decreased by 9% compared to 2022. However, criminals still managed to handle nearly $35 billion worth of cryptocurrencies throughout the year.

Key highlights:

  • Scams and frauds accounted for nearly one-third of all crypto crimes in 2023.
  • The share of illicit funds in crypto fell in 2023 but remains higher than existing industry estimates.
  • Regulatory pressure led to a drop in hacked and sanctions-exposed fund volumes.
  • Sales of fentanyl and its precursor materials dropped by 150% in volume, but vendor sales increased by 97%.
  • Almost half of all illicit crypto volume occurred on the TRON blockchain, with Tether (USDT) having the largest share.

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According to TRM Labs, the decline in illicit activity can be attributed, in part, to increased regulatory pressure. The report notes that the United States alone tripled the number of cryptocurrency crime-linked entities and individuals subject to sanctions.

US cryptocurrency crackdown impacted North Korean hackers

This crackdown appears to have had a significant impact on hackers linked to North Korea. These hackers made off with 30% less than they did in 2022. Overall, hack proceeds fell by more than 50%, from $3.7 billion in 2022 to $1.8 billion in 2023.

Despite the overall decrease in illicit activity, the report highlights that scams and frauds remained a significant issue. It accounted for nearly a third of all crypto crimes in 2023. 

Read more: KuCoin Indicted For Alleged Multi-Billion Dollar Criminal Conspiracy

The report also delves into the sale of illicit drugs on darknet marketplaces, which grew from $1.3 billion in 2022 to $1.6 billion in 2023. Interestingly, while the volume of fentanyl and its precursor materials dropped by 150% between 2022 and 2023, vendor sales increased by over 97% year-on-year, from $16 million to $33 million.

When it comes to the distribution of illicit crypto volume across different blockchains, TRM Labs found that almost half (45%) of all illicit activity occurred on the TRON blockchain in 2023, up from 41% in 2022. With $19.3 billion, stablecoin Tether (USDT) had the largest share of illegal volume, ahead of Ethereum (24%) and Bitcoin (18%).

Vignesh Karunanidhi

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.