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Tether’s Reaction Fuels Doubts on Tron Support Post Circle’s Decision

With Tron hosting over half its token supply, Tether (USDT) relies significantly on the blockchain.

Claudia Fischer

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Tether's Reaction Fuels Doubts on Tron Support Post Circle's Decision

Tether‘s support for Tron is uncertain amidst rising concerns over crime-related activities on the blockchain. Tether has not yet provided a clear response as to whether it will continue to back Tron, apart from a statement that it would support various blockchains. Such uncertainty occurs after the announcement of Circle, a rival, switching off issuing its USDC stablecoin on the Tron network.

Tether (USDT) with a $97.7 billion market cap, leads as the largest stablecoin, while Circle’s USDC follows at $28 billion. The Tron network currently hosts over 51.8 billion USDT, more than half of the nearly 101 billion USDT tokens issued across multiple blockchains. An extra $76.2 million in reserves provides liquidity for USDT on Tron.

Tether’s comments follow Circle’s announcement on Feb. 20 that it would immediately stop minting USDC on Tron and gradually end support for the network. Circle said the move aligns with ensuring USDC remains trusted, transparent, and safe.  

Concerns Over Tron’s Use in Crime

A January United Nations report said USDT on Tron had become a top choice for cyber fraud and money laundering in Southeast Asia, owing to the blockchain’s transactional ease, anonymity, and low fees. 

Also Read: Tron is ‘Banking the Unbanked’ Instead of Solana or Bitcoin, Say Analysts

Tether disputed the report, highlighting USDT’s traceability and cooperation with law enforcement. It noted freezing over $300 million in USDT last year linked to an Asian human trafficking probe. 

In November, ethics group Campaign for Accountability wrote to U.S. senators alleging Tron’s involvement in billions of dollars worth of transactions by alleged crime groups.  

The SEC sued Tron and its founder, Justin Sun, in March 2023 over allegedly unregistered securities offerings and manipulative trading. Sun denies the charges.

Tether Yet to Match Circle’s Tron Departure  

While Tether helps authorities trace illicit transactions, it has not followed Circle in ending Tron support over crime concerns. With Tron hosting over half its token supply, Tether relies significantly on the blockchain. The company monitors Tron’s safety standards but remains committed for now. Still, the recent law enforcement issues linked to Tron’s activity may compel Tether to reassess its presence on the network.

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