The TRON network accounted for 45% of the total illicit volume in 2023, according to data released by analysts at blockchain forensics firm TRM Labs.
TRM Labs released a report titled “The Illicit Crypto Economy” on Wednesday that highlights key trends in 2023 related to illicit activities and funds in the cryptocurrency space.
TRON Blockchain technology dominates illicit activities
The TRON blockchain network, founded by Chinese entrepreneur Justin Sun, accounted for the highest illicit activity last year, at 45%, up from 41% in 2022. The Ethereum and Bitcoin networks followed at 24% and 18%, respectively.
TRON has also emerged as a preferred network for North Korea-linked hackers, who frequently exchange stolen funds, mostly for USDT, on its network. These laundered crypto funds are then converted into fiat currency through high-volume over-the-counter (OTC) brokers.
According to TRM Labs, Tether's USDT stablecoin has become the currency of choice for terrorist financing entities, accounting for over $19 billion in illicit funds. In contrast, another stablecoin, USD Coin (USDC), recorded only $428.9 million in illicit volume.
Meanwhile, while other categories of illicit financing in cryptocurrencies have declined, drug sales on darknet markets have increased, reaching $1.6 billion in 2023, up from $1.3 billion in 2022. TRM Labs reported that sales volume Drug use of TRON has more than quadrupled this year. a period.
Cybercriminals appear to favor the TRON blockchain because of its relatively low gas fees, minimal price fluctuations, and the perception, although outdated, that transactions made on this network are difficult to trace.
Illicit cryptocurrency activity decreased by 9%
The cryptocurrency space has seen a decline in illicit activity, with total illicit funds shrinking by 9% in 2023 compared to the previous year, according to TRM Labs. Despite this decline, criminals still manage approximately $35 billion worth of cryptocurrencies.
Scams and fraud accounted for nearly a third of all cryptocurrency crime in 2023. However, the share of illicit funds in the cryptocurrency space declined over the year, although it remains well above current industry estimates.
TRM Labs has observed a decrease in the volumes of funds compromised and exposed due to sanctions, due to increasing pressure from governments and law enforcement agencies globally. The report highlighted that the United States alone has tripled the number of entities and individuals linked to cryptocurrency crimes subject to sanctions.
Notably, North Korea-linked hackers earned 30% less than they did in 2022, while hack revenue fell more than 50% to $1.8 billion from $3.7 billion the previous year. This decline shows the impact of intensified enforcement efforts on illicit activities in the cryptocurrency space.
