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News/Tether, Tron, and TRM Labs Collaborate to Combat USDT Criminal Activity

Tether, Tron, and TRM Labs Collaborate to Combat USDT Criminal Activity

Van Thanh Le

Sep 11 2024

3 months ago3 minutes read
Robot shields USDT vault from cyber criminals in blockchain landscape

New Tether Initiative Combats Illicit USDT Activity

Tether, the leading issuer of stablecoins, has joined forces with Tron, a prominent blockchain network, and blockchain intelligence firm TRM Labs to combat criminal activities involving USDT. The collaboration, known as the T3 Financial Crime Unit (T3 FCU), represents a groundbreaking effort to address the misuse of USDT on the TRON blockchain, a sector increasingly targeted by illicit actors.

A 2023 report from TRM Labs highlighted that nearly 45% of all illicit crypto transactions occurred on the Tron blockchain. This revelation prompted Tron, founded by Justin Sun, to team up with TRM Labs and Tether to create a task force dedicated to curbing financial crime. 

Tether’s USDT, widely used due to its stability and low transaction fees, has become a preferred tool for scammers and other malicious entities. With over 50% of USDT’s supply circulating on the Tron blockchain, the platform’s high throughput and minimal transaction costs make it attractive for both legitimate transactions and illegal activities.

The rise in adoption of stablecoins has amplified the need for proactive measures against illicit use. TRM Labs reported that scams and fraud constituted about one-third of all crypto crimes last year, with USDT being notably prevalent in cases of terrorist financing on Tron. Chris Janczewski, Head of Global Investigations at TRM Labs, emphasized the necessity for industry leaders to advance their capabilities to secure the crypto environment amid growing regulatory scrutiny.

Recent incidents underscore the importance of such initiatives. Earlier this year, Tether froze $5.2 million in USDT linked to scams and, in November 2023, executed a record $225 million freeze related to human trafficking in Southeast Asia. These actions reflect Tether's commitment to fighting cybercrime and reinforcing its role in ensuring a secure digital asset ecosystem.

Tether's proactive approach extends beyond crime-fighting, with recent investments marking a strategic shift. In a notable move, Tether invested $100 million in Adecoagro, a Latin American agribusiness, acquiring a 9.8% stake. This diversification into agriculture signals a broader strategy to balance its tech-centric portfolio with tangible assets. 

Despite the growing competition in the stablecoin market, Tether maintains a commanding presence with USDT's market capitalization exceeding $118 billion, underscoring its resilience and adaptability in the face of evolving industry dynamics.

This article has been refined and enhanced by ChatGPT.

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