A new initiative called the T3 Financial Crime Unit (T3 FCU) has been formed by Tron, Tether, and TRM Labs to combat illicit activity involving the USDT stablecoin on the Tron blockchain. The goal of this strategic alliance is to create a safer crypto community and set a new standard for the industry. The T3 FCU aims to disrupt malicious actors by using data, technology, and collaborating with law enforcement agencies.
The scale and ease of use of USDT, with a market cap exceeding $118 billion and more than half of its supply running on Tron, have made it a target for illicit activities. TRM Labs CEO Esteban Castaño notes that they have been partnering with Tron since 2019 to map illicit activity on the blockchain, but this new initiative takes their efforts even further. Tron is making a significant investment to track illicit activity, expanding both investigative and threat intel capabilities.
Despite hosting over 247 million user accounts and processing more than 8 billion transactions as of August, Tron faces challenges with illicit activities on its blockchain. According to TRM Labs’ Illicit Crypto Economy report, USDT accounted for the largest amount of illicit volume among stablecoins, reaching $19.3 billion in 2023. TRM found that 45% of all illicit crypto transactions in 2022 occurred on Tron, highlighting the need for action to curb such activities.
The T3 initiative, launched in July, aims to address the growing risks associated with illicit activities on Tron. TRM’s blockchain intelligence helps identify and flag suspicious activity, leading to action by Tether and Tron’s teams. Already, the unit has frozen over $12 million in USDT linked to scams across three continents, identifying 11 victims. The collaboration involves global efforts, with successful disruptions involving agencies in the U.K., U.S., and Australia.
Paolo Ardoino, CEO of Tether, emphasizes the speed at which the system can respond to crime by freezing assets on the blockchain within minutes. This swift action contrasts with the delays typically seen in traditional financial systems. The T3 group, comprised of a blockchain analytics firm, the blockchain developer, and the stablecoin issuer, aims to enhance blockchain safety and reduce the latency between receiving information and executing actions to combat illicit activities.
The T3 initiative comes at a crucial time following the arrest of Telegram founder Pavel Durov in Paris on various charges related to managing an online platform enabling illegal transactions. Both Ardoino and Tron founder Justin Sun, who have supported Durov, remain confident in their compliance efforts. TRM Labs’ Castaño sees the collaboration as expanding possibilities in mitigating risk in the crypto space, aiming to push illicit crypto volume closer to zero. This initiative represents an important step towards achieving a safer and more secure crypto community.
