The TRON network accounted for 45% of all illegal transaction volume in 2023, according to data released by analysts at blockchain forensics firm TRM Labs.
TRM Labs on Wednesday released a report titled “Illicit Crypto Economy” highlighting key trends in 2023 related to illicit activities and funds in the crypto space.
TRON Blockchain Dominates Illegal Activities
The TRON blockchain network, founded by Chinese entrepreneur Justin Sun, had the highest rate of illegal activity last year at 45%, up sharply from 41% in 2022. Ethereum and Bitcoin networks followed with 24% and 18% respectively.
TRON has also emerged as a favorite network for hackers associated with North Korea, who frequently exchange stolen funds, primarily USDT, on the network. These laundered crypto funds are then converted into fiat currency through over-the-counter (OTC) brokers who trade in large volumes.
The USDT stablecoin issued by Tether has become a preferred currency for terrorist financing groups, accounting for $19 billion worth of illicit funds, according to the TRM Institute. In contrast, another stablecoin, USD Coin (USDC), recorded only $428.9 million in illegal trading volume.
Meanwhile, while other categories of cryptocurrency illicit financing declined, drug sales on darknet markets increased, reaching $1.6 billion in 2023 from $1.3 billion in 2022. TRM Labs reports that drug sales using TRON have increased more than fourfold during this period.
Cybercriminals seem to prefer the TRON blockchain due to its relatively low gas fees, minimal price fluctuations, and the perception that transactions made on this network, although outdated, are more difficult to trace. .
Cryptocurrency illegal activity decreases by 9%
According to TRM Labs, illegal activities have decreased in the cryptocurrency space, with total illicit funds decreasing by 9% in 2023 compared to the previous year. Despite this reduction, criminals still controlled nearly $35 billion worth of cryptocurrencies.
In 2023, fraud and fraud accounted for nearly one-third of all crypto crimes. However, although the proportion of illicit funds in the crypto space decreased over the year, it still remains significantly higher than existing estimates in the industry.
The TRM Institute observed a decline in the amount of funds hacked and exposed to sanctions due to increased pressure from governments and law enforcement agencies globally. The report highlighted that the number of organizations and individuals associated with crypto crimes subject to sanctions in the United States alone has tripled.
In particular, the income earned by hackers associated with North Korea decreased by 30% compared to 2022, and the revenue from hacking decreased by more than 50% from $3.7 billion the previous year to $1.8 billion. This decline shows the impact of increased enforcement against illegal activities in the cryptocurrency space.
