Tron and Tether Freeze $100M USDT Linked to Money Laundering

Tron’s T3 Financial Crime Unit, in collaboration with Tether and TRM Labs, has successfully frozen $100 million in USDT linked to illicit activities since its creation in September. The unit focuses on identifying and blocking suspicious transactions, targeting crimes such as money laundering, scams, and terrorism financing.

Using blockchain intelligence tools provided by TRM Labs, the T3 unit analyzed over $3 billion in USDT transactions, spanning five continents. These efforts uncovered patterns of criminal behavior, including the use of dark web services for money laundering. Among the most notable findings was $3 million in USDT allegedly tied to North Korean actors, suspected of supporting the regime's fundraising operations through illicit crypto activities.

Tron’s network holds around $60 billion in circulating USDT, making it the second-largest stablecoin network after Ethereum. This significant volume underscores the importance of monitoring and preventing criminal exploitation of the platform. Common illicit activities detected include investment fraud, drug trafficking, hacking incidents, and violent crime financing.

Preventing financial crime remains a top priority for both regulators and the crypto industry. In 2024, Binance faced a $4.4 million penalty in Canada for violating anti-money laundering (AML) laws. Additionally, Binance’s former CEO, Changpeng Zhao (CZ), is named in a class-action lawsuit in Seattle, which claims the exchange failed to prevent money laundering activities, causing significant losses for investors.

Similarly, Alexey Pertsev, a Tornado Cash developer, received a 64-month prison sentence from a Dutch court after being found guilty of laundering $1.2 billion through the crypto-mixing platform. However, regulatory efforts remain complex. A US federal appeals court recently overturned sanctions against Tornado Cash, sparking renewed debates about balancing privacy and regulation in blockchain technology.

In October, Tether also faced allegations from a Wall Street Journal report suggesting that its stablecoin was indirectly linked to illegal activities, including drug trafficking and hacking. However, Tether’s CEO, Paolo Ardoino, firmly denied these claims and insisted there was no ongoing investigation against the company.

Despite these challenges, Tron’s T3 unit represents a proactive approach to combating financial crimes in the cryptocurrency space. Its work highlights the need for increased oversight, transparency, and global cooperation to address the misuse of digital assets. As regulatory frameworks continue to evolve, such initiatives will play a key role in building trust and accountability in the crypto industry.