- Recent years have seen a sharp increase in potentially contaminated USDT tokens due to illegal activities.
- The sentiment of Tron Network and the price of TRX therefore faced uncertainties.
Tether [USDT], a dominant stablecoin in the cryptocurrency market, has faced mounting concerns due to illegal activity channeled to its addresses. This influx of questionable activity could impact both USDT and the Tron [TRX] network.
Realistic or not, here is the market cap of TRX in terms of BTC
Over the counter, under the table
Over the past 24 months, an alarming amount of TRC20 USDT has ended up in over-the-counter (OTC) addresses. Many of these transactions were related to various forms of scams and illegal actions.
OTC trading serves as a crucial channel for cryptocurrency users to facilitate the exchange of their assets. In addition to traditional centralized platforms, compliant cryptocurrency service providers and major money laundering hubs, some crypto payment platforms also offer OTC trading services.
However, the extent of KYC implementation varies between these platforms. This results in different risk levels associated with their addresses.
An extensive fund analysis conducted by Bitrace targeting Tron addresses that exhibit characteristics indicative of OTC activity. It excluded addresses connected to centralized exchanges, compliant cryptocurrency services and large-scale money laundering operations.
The analysis showed significant inflows of more than 34.39 billion USDT tokens to these addresses over the past two years.
Worryingly, more than half of these inflows were in the medium and high risk fund category. Specifically, 14.7% of USDT was associated with online gambling, 20.1% with gray and black market industries, and 19.4% with money laundering.
Looking at the sentiment
The implications of this rise in potentially tainted USDT tokens are multi-faceted and could significantly impact sentiment around both USDT and the Tron Network.
While weighted sentiment for Tron has fallen, USDT’s weighted sentiment has remained relatively high.
In terms of market capitalization, USDT continues to lead the stablecoin market and has proven resilient to these developments so far.
Nevertheless, there is an underlying fear that the association with criminal activity could ultimately dampen the stablecoin’s future growth.
Source: Santiment
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Meanwhile, attention turned to TRX and the token’s price witnessed a decline over the past month, which can be attributed to these ongoing issues. The volume of TRX being traded has also decreased significantly in recent times.
What is especially notable is the dramatic spike in price volatility for TRX, signaling a potentially tumultuous future for the cryptocurrency.
Source: Santiment
