TrueUSD (TUSD), the Ethereum-based stablecoin linked with Tron founder Justin Sun, moved away from its U.S. dollar peg slightly on Monday after concerns about the Tron (TRX) network’s use in illicit terror funding.
According to data from CoinMarketCap, TUSD dropped to a low of $0.995 on several crypto exchanges and saw a 53% uptick in trading volume over the last 24 hours.
The instability followed a Reuters report that pointed to Tron’s supposed role in aiding terrorists transfer funds. (This was also covered in the recent Unchained podcast episode “How Much Money Are Terrorists Actually Raising in Crypto?“)
The report shed light on seizures carried out by Israel’s National Bureau for Counter Terror Financing unit, which froze 143 Tron wallets between July 2021 and October 2023 believed to be associated with “severe terror” crimes.
Close to two-thirds of Israel’s Tron seizures were connected to terrorist groups like Lebanon’s Hezbollah and Hamas ally Palestinian Islamic Jihad.
“Earlier it was Bitcoin and now our data shows that these terrorist organizations tend to increasingly favor Tron,” said Mriganka Pattnaik, CEO of Merkle Science, to Reuters.
Tron’s Sun addressed the news reports in an X post, saying the team was “committed to combating terrorist financing” but their top priority lay with maintaining decentralization of the protocol.
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
Tron’s native token TRX also declined 5% following the news, and was trading at around $0.102 at the time of writing.
Data from Whale Alert shows that large players had transferred significant amounts of TRX over the last day, with unknown addresses moving a total of $845 million in eight transactions.