A report issued by TRM Labs indicated that Tether’s USDT, the largest stablecoin in the cryptocurrency industry, was the preferred stablecoin used for illicit transactions during 2023. TRM Labs alleges that 1.6% of USDT’s volume was linked to illicit activity last year, with $19.3 billion worth of USDT used in illegal transactional flows.

TRM Labs States Tether’s USDT Was the “Weapon of Choice” for Illegal Transactions in 2023

Tether’s growth and popularity have also extended to the criminal circles. A TRM Labs report affirms that Tether’s USDT, the largest stablecoin by market cap, was the most used U.S. pegged token for illicit transactions during 2023. However, the overall volume of transactions linked to illegal purposes fell due to the growing enactment of sanctions targeting digital assets.

TRM Labs alleges that 1.6% of Tether’s transactional volume was linked to illicit flows, with $19.3 billion linked to criminal activity. While still high, this number is lower than the $24.7 billion detected last year. Only 0.05% of the volumes transacted with Circle’s USDC, the second-largest stablecoin, was linked to these activities.

Terrorism financing also thrived using USDT in the Tron blockchain. TRM Labs states that the number of USDT TRC-20 addresses linked to terrorism financing campaigns grew by 125%. This “cemented its position as the currency of choice for use by terrorist financing entities,” the report stresses.

This preference for Tron-based USDT is linked to the stability of the currency and the low transaction fees associated with the chain. Most donations destined for these addresses were under $500, with 40% of these flows moving $100 or less.

Tether has rejected the notions presented in TRM Labs’ report, arguing that these numbers could be incorrectly estimated for several reasons. In an answer to Bloomberg, an unnamed Tether spokesperson stated:

Transactional figures have often been exaggerated due to a misinterpretation of data that assumes that if a service receives some small portion of illicit funds then all funds in the service are illicit.

What do you think about the preference of criminal groups for USDT over other stablecoins? Tell us in the comments section below.

Source: news.bitcoin.com.