What do you know about the encrypted blockchain favored by terrorist organizations?

A rapidly growing cryptocurrency network named Tron has emerged as a primary platform for crypto transfers supporting entities such as Hamas and Hezbollah. Tron, surpassing Bitcoin in speed and cost-effectiveness, has become the preferred platform for crypto transactions associated with groups designated as terrorist organizations by the EU, Israel, the US, and other countries, according to a Reuters analysis.

Israeli security services have observed a notable increase in the targeting of Tron wallets for crypto seizures since 2021, with a decline in Bitcoin wallet seizures. The Israel National Bureau for Counter Terror Financing froze 143 Tron wallets between July 2021 and October 2023, linked to designated terrorist organizations or severe terror crimes.

The majority of Israel's Tron seizures, including 39 wallets owned by Lebanon's Hezbollah and 26 belonging to Hamas ally Palestinian Islamic Jihad, occurred in the current year. Among these seizures were 56 Tron wallets associated with Hamas, primarily connected to a Gaza-based money exchange company named Dubai Co. For Exchange.

Following a Hamas assault, Israel announced its largest-known seizure of crypto accounts, freezing approximately 600 accounts linked to Dubai Co., accused of aiding the Hamas terrorist organization by transferring funds on a significant scale.

Representatives for Dubai Co. did not respond to requests for comment. Several individuals whose funds were frozen claimed to use Tron for legitimate business or personal purposes, denying connections to Hamas or Islamic Jihad. Only one person, identified as Neo, acknowledged the possibility of transferring money to someone associated with Hamas on a single occasion.

Estimates of the amounts reaching proscribed groups through crypto are uncertain due to difficulties in determining whether funds sent to seized wallets were truly destined for these groups. Tron's spokesperson emphasized that the technology could be used for questionable activities, asserting that Tron lacked control over its users and was not linked to the groups identified by Israel.

The dominant cryptocurrency across the Tron network, according to those consulted by Reuters, is Tether. Tether, the third-largest crypto token, with a market value of $89 billion, has experienced a significant increase in the past year. Tether aims to maintain a 1:1 peg with the dollar and actively traces and freezes tokens used for illicit purposes, coordinating efforts with law enforcement.

Despite its limited recognition outside crypto circles, Tron serves as the primary blockchain for Tether transactions, hosting $48 billion of the tokens, according to Tether's website. Tron's founder, Justin Sun, faced a lawsuit from the US Securities and Exchange Commission (SEC) in March, accusing him of inflating trading volumes and selling Tron tokens as an unregistered security. Sun dismissed the SEC charges, stating they "lack merit."