The Tron blockchain (TRX) has recently eclipsed Bitcoin as the preferred means of funding for terrorist groups such as Hezbollah and Hamas, according to financial crime experts interviewed by Reuters. Justin Sun, Tron’s founder, responded by emphasizing the platform’s commitment to fighting terrorist financing while maintaining its decentralization.
Tron now preferred to Bitcoin for terrorist financing?
According to a report by Reuters, the Tron blockchain (TRX) is now preferred over Bitcoin for financing groups affiliated with Iran, Hamas and Hezbollah and designated as terrorists by Israel and the United States, as well as a significant part of the Western sphere.
Interviewed by Reuters, 7 experts in financial crime and on-chain investigation highlighted data indicating that Tron was now a preferred funding channel to Bitcoin for financing this type of activity, a news that is particularly verified in the accounting of seized wallets.
Indeed, over a period of around 2 years from July 2021 to October 2023, Israel’s National Bureau for Combating Terrorist Financing froze 143 wallets on Tron, which it said were linked to acts of terrorism or in any case intended to be transferred to “designated terrorist organizations”.
“It used to be Bitcoin, and now our data shows that these terrorist organizations tend to prefer Tron more and more.”
Mriganka Pattnaik, CEO of Merkle Science
In response to the article, Tron spokesman Hayward Wong asserted that technologies as a whole could “in theory be used for questionable purposes,” pointing out that the U.S. dollar was not exempt from this observation. He also added that Tron had no control over how its network was used, and that it had no links with any of the groups identified by Israel as far as it was concerned.
Justin Sun, Tron’s founder, also reacted on X, highlighting his decentralization vows without specifying whether he was responding specifically to the Reuters article:
TRON is a decentralized protocol, similar to Bitcoin and Ethereum, with nodes operating worldwide. Global super representatives are responsible for running this protocol. While we are committed to combating terrorist financing by integrating various analysis projects and…
– H.E. Justin Sun 孙宇晨 (@justinsuntron) November 27, 2023
” [… ] While we are committed to fighting terrorist financing by integrating various projects and analysis partners, our top priority remains to maintain decentralization, ensure the safety of everyone’s assets and provide instant, affordable and reliable transactions, as has always been the case. […]”
Over the year 2023, Israel seized funds from 87 different portfolios on Tron, two-thirds of its seizures all periods combined. Of this figure, Israel claims that 39 of the portfolios concerned are affiliated to Hezbollah, and that 26 are linked to Palestinian Islamic Jihad (PIJ).
Last year, Israel announced the seizure of 46 Tron wallets believed to be affiliated to Hamas. More recently, following the events of October 7, the country bordering the Gaza Strip said it had seized 600 such accounts, without specifying which cryptocurrencies were involved. This constitutes the largest seizure of crypto accounts for Israel of any period.
Reuters, which obtained access to the lists of individuals whose wallets had been frozen, managed to contact 6 of them, who assured us they had no links with the groups concerned. The latter reside either in Venezuela, Dubai or the West Bank.
