Illicit use of blockchains represents just 0.4% of total crypto volume, TRM Labs finds

Quick Take

  • TRM Labs found illicit volume is down 24% since 2023 to $45 billion, representing just 0.4% of overall crypto transactions.
  • Crime is particularly down on TRON, which last year launched a partnership to monitor for criminal activity with TRM Labs and Tether.

Crypto crime is dropping, and nowhere faster than on blockchain often called out for illicit use, TRON, according to a preview of TRM Labs’ 2024 Crypto Crime Report.

Illicit onchain volume is down 24% since 2023 to $45 billion, according to the blockchain intelligence company, and represents just 0.4% of overall crypto transactions. This is despite crypto transaction volume growing 56% last year to over $10.6 trillion.

The firm attributes this drop to increased efforts to curb illegal activities by law enforcement and crypto industry participants.

Nowhere is this more apparent than on TRON, the blockchain founded by prominent founder Justin Sun which recently launched a partnership looking to “identify and disrupt criminal networks” alongside Tether and TRM Labs.

Together with law enforcement agencies around the world, the so-called T3 Financial Crime Unit claims to have frozen around $130 million USDT worth of assets connected to suspected crimes, the group announced earlier this month. The group has monitored over $3 billion worth of USDT transactions since spinning up in August.

This strategy has appeared to pay off, as TRM Labs now says illicit use of TRON is falling fast. “TRON experienced the most significant decline in illicit activity, with illicit volume dropping by $6 billion and the proportion of such activity nearly halving,” the company wrote.

That said, TRON remains the most-used blockchain for criminal activity. According to the same report, TRON accounts for 58% of total illicit volume compared to 24% on Ethereum and 12% on Bitcoin, which “reflects a continued preference for blockchains that have low transaction fees, smart contracts and popular stablecoins.”

This is in line with a 2024 United Nations report that alleged USDT transactions facilitated with Tron’s TRC-20 protocol are “a preferred choice” for bad actors. According to Tether, there’s nearly $60 billion in USDT on TRON, the largest issuance behind Ethereum.

According to the report, sanctions violations account for about a third of illicit volumes across all monitored networks while scams and fraud account for about a quarter of it. “Fraud-related inflows dropped by 40% in 2024, but remain high at $10.7 billion,” the firm wrote.

Pig butchering, an investment scam that grooms people by gaining their trust, also declined with an estimated $2.5 billion stolen. It’s worth noting these figures are typically revised up as more instances are disclosed and investigations close in the coming months.

However, there are instances where crime is up. The number of ransomware attacks and hacks, particularly by North Korean and Russian actors, are both up. Reportedly, the financial demands of ransomware actors have reached “unprecedented levels.” TRM Labs also found that terrorist financing through crypto also grew in 2024.

“Ultimately, the fight against crypto crime requires a proactive, collaborative approach,” TRM Labs said. “Regulatory bodies, law enforcement agencies, and private sector partners must continue to adapt, innovate, and cooperate to outpace increasingly sophisticated threat actors.”


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Daniel Kuhn is a Senior Journalist and Editor at The Block, where he covers the crypto industry with a particular focus on tech. He previously served as deputy managing editor of opinion/features at CoinDesk. He first appeared in print in Financial Planning, a trade publication magazine. Before journalism, he studied philosophy as an undergrad, English literature in graduate school and business and economic reporting at an NYU professional program. You can connect with him on Twitter and Telegram @danielgkuhn or find him on Urbit as ~dorrys-lonreb.

Editor

To contact the editor of this story:
Jason Shubnell at
[email protected]

WHO WE ARE

The Block is a news provider that strives to be the first and final word on digital assets news, research, and data.

+ Follow us on Google News
Connect with the block on