Tether, Tron, And TRM Labs Join Forces To Combat Crypto Crime

Tron, the decentralized autonomous organization behind the namesake blockchain; Tether Tether , issuer of the USDT stablecoin; and TRM Labs, a San Francisco-based blockchain intelligence firm, have joined forces to form the T3 Financial Crime Unit (T3 FCU)—a strategic alliance focused on curbing illicit activity tied to USDT on the Tron blockchain.

“Our goal is to create a safer, more secure crypto community, setting a new standard for the industry,” says Tron founder Justin Sun.

Stablecoins like USDT are the lifeblood of crypto markets, providing the liquidity that fuels everything from everyday transactions to institutional trades. But with a market cap exceeding $118 billion and more than half of USDT’s supply running on Tron, this scale and ease of use have made it a magnet for malicious actors. The T3 FCU aims to disrupt those activities by leveraging data, technology, and a deep collaboration with law enforcement.

TRM Labs CEO Esteban Castaño notes the effort is an extension of a long-standing partnership. “We were the first blockchain intelligence company to start mapping illicit activity on Tron—we've been partnering on that front since 2019, but this initiative takes that even further,” he says. “Tron is also making a significant investment to track illicit activity, so we are expanding both investigative and threat intel capabilities.” While the financial commitment was not disclosed, the focus is clear.

As of August, Tron reported hosting over 247 million user accounts and processing more than 8 billion transactions. However, the same features that make USDT on Tron appealing to legitimate users—low fees, stability, and ease of use—have also attracted terrorists, money launderers and scammers. According to TRM Labs’ Illicit Crypto Economy report, published in April, USDT accounted for the largest amount of illicit volume among stablecoins, reaching $19.3 billion in 2023, or 1.63% of its total volume. USDC USDC , another major stablecoin, had only $428.9 million in illicit volume, representing 0.05% of its total.

Additionally, TRM found that 45% of all illicit crypto transactions last year occurred on Tron, up from 41% in 2022. By comparison, Ethereum accounted for 24% of illegal transactions, and Bitcoin Bitcoin for 18%. In March 2023, the U.S. Securities and Exchange Commission sued Tron founder Justin Sun and three of his companies, alleging unregistered offerings, sales, and market manipulation involving Tron-linked TRX TRON and BTT BitTorrent tokens. Sun’s legal team has contested the SEC’s claims, arguing they fall outside the agency's jurisdiction.

The T3 initiative was launched in July as a direct response to these growing risks. TRM’s blockchain intelligence helps to identify and flag suspicious activity, while Tether and Tron’s teams take action based on those findings. Already, the unit has helped freeze over $12 million in USDT linked to scams—including blackmail and fraud schemes—across three continents. So far, 11 victims have been identified, with more expected as investigations continue.

Chris Janczewski, TRM’s head of global investigations, underscores the scale of the collaboration: “The first three successful disruptions we've had involved agencies in the U.K., U.S., and Australia. So already we're seeing that it takes a global effort in many of these situations and people coming together to help is, I think, going to be very impactful over the next few months and years.”

Paolo Ardoino, CEO of Tether, stresses the speed with which the system can respond to crime. “Freezing assets on a blockchain takes minutes. Imagine someone stealing money from a bank, transferring it across jurisdictions, and the legal delays that follow—it takes ages,” he says. “The T3 group is an example of three parties—a blockchain analytics firm, the blockchain developer itself, and the stablecoin issuer, —putting together their forces to create a consortium that will focus on blockchain safety and reduce the latency between we the moment we receive the first part of the information to when we can execute the action. Good luck finding something like this in the traditional international financial system.”

The timing of this initiative is noteworthy, following the recent arrest of Telegram founder Pavel Durov in Paris on a range of charges, including complicity in managing an online platform to enable illegal transactions and a refusal to cooperate with law enforcement. Both Ardoino and Sun, who have publicly supported Durov, remain confident in their own compliance efforts. “We work with 140 law enforcement agencies across 40 different countries. I think it would be very, very hard to say that Tether is not collaborating at the best of its capacity,” says Ardoino.

TRM’s Castaño is optimistic about the collaboration’s long-term impact: “This expands what’s possible. Collectively, we’re still figuring out how to mitigate risk in crypto, and we’re just beginning to tap into the potential of using the technology itself to do that,” he says. Though illicit crypto volume remains low—less than 1%, according to TRM Labs—he sees an opportunity to push that figure closer to zero. “This is an important first step toward achieving that.”