Bitcoin’s Terror Financing Drops By 90% As TRON Blockchain Emerges: Report
- TRM Labs’ Illicit Crypto Ecosystem Report shows decline in Bitcoin’s share of crypto hack volume.
- Russian-language DNMs account for 80% of DNM spending, but Western DNMs have better security measures.
- TRON blockchain has replaced Bitcoin as the primary currency for terrorist financing.
TRM Labs’ report shows decline in Bitcoin’s share of hack volume, rise of TRON blockchain for terror financing. Russian DNMs dominate DNM spending.
The Illicit Crypto Ecosystem Report by TRM Labs reveals a significant decline in Bitcoin’s share of crypto hack volume from two-thirds in 2016 to just under 3% in 2022. Ethereum (68%) and Binance Smart Chain (19%) have taken over. The report also shows that Bitcoin was the exclusive currency for terrorist financing in 2016, but by 2022, it was all but replaced by assets on the TRON blockchain, accounting for 92%.
While Russian-language DNMs account for over 80% of the USD 1.49 billion spent on DNMs in 2022, the largest Western Bitcoin DNM, ASAP Market, accounts for less than 10% of global DNM market share. Most Russian-language DNMs only support Bitcoin, with no privacy coin options available, reflecting their lower perceived risk of being taken down by the authorities. By contrast, Western DNMs employ more on-chain operational security measures and either offer Monero only or Monero alongside Bitcoin.
The use of cryptocurrencies in illegal activities is not limited to DNMs. In 2022, a Los Angeles man sent USD 13,000 worth of BTC to a darknet website to hire a hitman to kill a woman who had rejected him. Other cases of people using cryptocurrency to pay hitmen have been reported, such as a Mississippi resident who received a 10-year prison sentence for attempting to have her husband killed for a USD 10,000 fee in Bitcoin.
Bitcoin was also used for terror financing in the past, but now TRON blockchain has taken over. TRM Labs identified multiple pro-ISIS groups in Pakistan and Tajikistan raising tens of thousands of dollars in cryptocurrency to spread propaganda and recruit fighters. The majority of those actors used the stablecoin Tether (USDT) for donations, and there was a 240% YoY increase in Tether use among terror financing entities tracked by TRM Labs in 2022.
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