Tron, Tether, and TRM Labs teamed up with Spanish authorities to tackle a major cryptocurrency laundering scheme across Europe. Together, they managed to freeze $26.4 million in crypto linked to this money laundering operation.
This effort is part of the T3 Financial Crime Unit, which launched in August 2024. This initiative involves the three blockchain companies working closely with law enforcement. The investigation relied on police surveillance to track down the criminal organization. They identified its crypto wallets through illegal activities using Know Your Customer (KYC) data from service providers. This operation marks the largest coordinated freeze by the T3 Unit so far, adding to a total of $126 million recorded in its first year.
A representative from the Guardia Civil, the Spanish law enforcement agency, stated, “This organization moved millions across borders, using both cash and crypto to help criminal groups launder their profits.” This highlights the serious nature of the operation.
Tron has made significant strides in improving security. Reports suggest that its measures have reduced illicit volumes on the blockchain by $6 billion. TRM Labs found that 49% of illegal activity on Tron is linked to sanctioned entities, while 32% relates to blocklisted funds. Despite these efforts, Tron remains the top blockchain for illicit transactions, with 58% of such activities occurring on its network. Additionally, Tether’s USDT is identified as the most commonly used asset for criminal activities.
Using centralized stablecoins like USDT (Tether) and USD Coin (USDC) to freeze funds tied to illegal activities is a well-known practice. These stablecoin issuers have built-in mechanisms to block transactions associated with crime.
Tether's CEO, Paolo Ardoino, made it clear: “Let this serve as a warning—criminals who misuse Tether will get caught.” This statement reinforces their commitment to combating crime.
In November 2023, Tether froze $225 million in USDT linked to pig butchering scams. These scams involve fraudsters coercing victims through manipulation and deceit. This action followed an investigation by the U.S. Department of Justice.
Southeast Asia has become a hotspot for these scams, often run by organized crime groups. Victims can include individuals who are kidnapped and forced to participate in these schemes at resorts.
These pig butchering syndicates reportedly launder their proceeds through a dark web marketplace called Huione Guarantee, which previously relied heavily on Tether. To avoid having their funds frozen, the platform launched its own stablecoin back in September, according to the security firm Elliptic.