Tron Takes Over Bitcoin as Favorite Network for Illicit Activity

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Tron has become the preferred platform for crypto transfers linked to groups designated as terrorist organizations by Israel, the US, and others, according to a new report from Reuters. Israel’s counter-terror financing bureau (CTFB) froze 143 Tron wallets between mid-2021 and October 2023 believed to be connected to Hamas, Hezbollah, or other militant groups.

This represents a sharp rise compared to Bitcoin wallet seizures, marking a shift in how these organizations move money.

“Earlier it was Bitcoin, and now our data shows that these terrorist organizations tend to increasingly favor Tron,” said Mriganka Pattnaik, CEO of Merkle Science, a blockchain analytics firm. 

Almost two-thirds of the Tron wallet seizures were this year, totaling 87 accounts Israel said belonged to Hezbollah, Palestinian Islamic Jihad, and other militant groups. Israel called out Tron’s faster transaction speeds, lower fees, and stability as reasons why terrorist networks now favor it over Bitcoin. 

Reuters connected the dots between the cheaper, quicker Tron network and increased usage of Tether, the world’s largest stablecoin, USDT transactions now dominate activity on the Tron blockchain. Over 50% of Tether’s tokens are stored and transacted on the Tron network, according to Defillama.

The report cites growing pressure on Bitcoin’s perceived anonymity, driving terrorist organizations to alternatives like Tron. Shlomit Wagman, a senior fellow at Harvard University, stated that Tron is a past “blindspot” that is now clearly on the radar of law enforcement worldwide.

Last month, Binance co-founder Yi He reported the freeze on accounts linked to Hamas militants, highlighting the specific targeting of Hamas and emphasizing the necessity for financial entities, including Binance, to cooperate with freeze requests for designated terrorist organizations. 

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