The TRON network accounted for 45% of all illicit volumes in 2023, according to data published by analysts at blockchain investigation firm TRM Labs.
TRM Labs has published a report titled “The Illicit Crypto Economy” on Wednesday, highlighting key trends in 2023 related to illicit activities and funds in the crypto space.
TRON Blockchain 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 with 24% and 18%, respectively. .
TRON has also become a favored network for hackers associated with North Korea, who frequently exchange stolen funds, primarily for USDT, on its network. Subsequently, these laundered crypto funds are converted into fiat currency through high-volume over-the-counter (OTC) brokers.
According to TRM Labs, the USDT stablecoin issued by Tether Inc. has become the preferred currency of terrorist financing entities, accounting for more than $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 crypto have declined, drug sales on darknet markets have seen an increase, reaching $1.6 billion in 2023 from $1.3 billion in 2022. TRM Labs reported that the volume of sales of drugs using TRON more than quadrupled during this period. period.
Cybercriminals appear to favor the TRON blockchain due to its relatively low gas fees, minimal price fluctuations, and the perception, albeit outdated, that it is more difficult to trace transactions made on this network.
Illicit crypto activity decreased by 9%
The crypto space has seen a decrease in illicit activities, with total illicit funds decreasing by 9% in 2023 compared to the previous year, according to TRM Labs. Despite this reduction, criminals still managed nearly $35 billion in cryptocurrencies.
Scams and frauds accounted for almost a third of all crypto crimes in 2023. However, the share of illicit funds in the crypto space has declined over the year, although it remains significantly higher than existing estimates of the sector.
TRM Labs has observed a decline in the volumes of hacked and sanctions-exposed funds, attributed to increased pressure from governments and law enforcement globally. The report highlights that the United States alone has tripled the number of crypto-related entities and individuals subject to sanctions.
Notably, hackers associated with North Korea got 30% less than in 2022, while hacking revenue declined by more than 50% to $1.8 billion from $3.7 billion. dollars the previous year. This decline shows the impact of increased anti-fraud efforts on illicit activities within the crypto space.
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