The cryptocurrency Tron, founded by the controversial crypto mogul Justin Sun in 2017, has become increasingly popular for terrorist financing, according to Reuters analysis.
Sun previously referred to Tron as “a shit coin” but it seems that it has found a use-case in the context of illicit financial transfers. An analysis of crypto seizures announced by Israeli security services since 2021 shows that Tron is becoming an increasingly popular token among terrorist groups such as Hezbollah.
Israeli intelligence is seeing a decline in the use of Bitcoin and a sharp rise in the use of Tron, with much of its appeal likely to be the low fees and faster transaction times that the token offers.
Israel’s National Bureau for Counter Terror Financing (NBCTF) confirmed that it froze 143 Tron wallets between July 2021 and October 2023 that it had assessed were connected to a “designated terrorist organisation” or used for a “severe terror crime.”
Approximately two-thirds of Israel’s Tron seizures were owned by individuals associated with Hezbollah, with others owned by Palestinian Islamic Jihad, an ally of Hamas. The regime in Iran has also used Tron to circumvent US sanctions, with $8 billion being transferred on the Tron network from Iran-linked, sanctioned entities.
When contacted by Reuters, Tron’s spokesperson Hayward Wong said that all technologies could “in theory be used for questionable activities” and said that Tron did not have control over those using their network.
Tron is not the only crypto company to have apparently been involved in facilitating terrorist financing. Binance – whose CEO CZ is a close ally of Tron’s Sun – has engaged in similar activity.
The CFTC alleges in its civil case against Binance, brought forward last year, that the company’s former Head of Compliance Samuel Lim joked about Hamas terrorists fundraising on the platform, telling a colleague that only “large sums constitute money laundering” and that a terrorist “can barely buy an AK47 with 600 bucks.”
As with Tron, Binance has also been accused of helping Iranian firms move funds in defiance of sanctions. Binance’s CEO and founder CZ is currently serving a prison sentence in the States after pleading guilty to charges of enabling money laundering at his crypto exchange.
However, Sun has so far managed to avoid the criminal repercussions faced by other prominent figures such as CZ and Sam Bankman-Fried
As Disruption Banking journalist Tim Tolka has written, “Justin Sun has managed to slip through the fingers of regulators for the past 6 years. He has hundreds of millions of dollars at his disposal, spread across dozens of foreign bank accounts, and he has citizenship in various small nations that cheapen their national heritage by offering it to global criminals in exchange for money.”
It is becoming increasingly clear that this is having disastrous consequences. As more terrorists and criminal organisations turn to Tron to finance their murderous activities, regulators and law enforcement will need to find ways to get a grip on the illicit financial flows being facilitated by Tron – and do it quickly. With groups such as Hezbollah taking advantage of the Tron network, this has become quite literally a matter of life or death.
Author: Harry Clynch
