According to a report by blockchain analysis company TRM Labs, Tether's stablecoin USDT was the most commonly used stablecoin in cryptocurrency criminal activities last year. As more and more digital asset institutions face sanctions, the total amount of illegal transactions in the industry has decreased. Data shows that in 2023, USDT was involved in $19.3 billion of illegal transactions, lower than the previous year's $24.7 billion. According to the TRM report, USDT dominated terrorism financing last year. USDT on Tron "consolidated its position as the preferred currency for terrorist financing entities" in 2023. TRM said that the number of terrorist financing-related addresses receiving USDT on the Tron blockchain increased by 125% in 2023.

The Dalian Securities Regulatory Bureau and seven other departments issued a risk warning about preventing illegal fundraising activities under the guise of "virtual currency", "metaverse", "wealth sharing", and other names. Recently, some lawless individuals have used the names of "virtual currency" and "metaverse" to lure investors to download illegal apps and purchase their self-created illegal virtual currency through online WeChat groups and offline national tour meetings, claiming to offer "wealth sharing" opportunities. These activities are suspected of illegal fundraising and fraud, seriously infringing on the property safety of the people and disrupting the order of economic and financial activities.

According to a report by Chainalysis, the vast majority of cryptocurrency transactions (about 99.6%) are used for legitimate purposes. In 2023, illegal cryptocurrency transactions accounted for only 0.34% of all cryptocurrency transactions, lower than 0.42% in 2022 and significantly lower than 1.3% in 2019. The report only focuses on funds stolen by cryptocurrency hackers and those identified as illegal addresses. Despite the decrease, it is worth emphasizing that compared to illegal activities in the broader financial industry, cryptocurrency-related crimes are still small.

On December 29th, in order to further enhance the foreign exchange exhibition capabilities of banks, promote cross-border trade and investment facilitation, and prevent cross-border capital flow risks, the State Administration of Foreign Exchange formulated the "Bank Foreign Exchange Exhibition Management Measures (Trial)" in accordance with the "Foreign Exchange Administration Regulations of the People's Republic of China" and related laws and regulations, which will be implemented from January 1, 2024.

People's Bank of China has released the "China Financial Stability Report (2023)". The report mentions the ongoing cleaning up and rectification of the financial order. Consolidating the results of shadow banking risk management, promoting the transformation of asset management business and orderly rectification of individual case assets. Prudently disposing of risks related to the Gold Exchange and "fake Gold Exchange", rectifying irregularities in third-party wealth management companies and illegal financial activities such as cross-border internet securities brokers and virtual currency trading speculation. Continue to do a good job in disposing of risks related to existing P2P online lending platforms.

Datuk Sri Nalan, director of the Commercial Crime Investigation Department of Bukit Aman, Malaysia, pointed out that the bureau established a cryptocurrency investigation team as early as 2018. The team was officially launched on May 31, 2022, becoming the first cryptocurrency investigation team in Southeast Asia. The team has also assisted multiple domestic and foreign institutions, analyzing a total of 532 electronic wallets, with a total amount of cases involving up to 1 billion ringgit.

US Senators Mark Warne, Mike Rounds, and Mitt Romney introduced a bill today called the "Terrorist Financing Prevention Act," which will expand the Treasury Department's sanctioning power to cover more terrorist organizations, including Hamas, and provide them with more resources to address encryption issues.

Jim Lee, head of the criminal division of the US Internal Revenue Service, stated that cases related to cryptocurrency tax evasion are on the rise. Lee said that three years ago, the vast majority of ongoing cryptocurrency investigations (over 90%) involved money laundering. However, in the past year, about half of the digital asset investigations involved taxes/ tax evasion.

Wally Adeyemo, Deputy Secretary of the US Treasury, stated in a speech at the Blockchain Association Policy Summit that the US Treasury is seeking more power from Congress to crack down on illegal activities in the digital asset industry. Adeyemo stated that the Treasury has proposed recommendations to legislators, including a proposal for new sanction tools. He said, "We call on Congress to establish a secondary sanction system, which will not only sever a company's ties to the US financial system, but also cut off any company that continues to do business with sanctioned entities from the US financial system. This is an important tool that we will not ask for lightly. But we need to make every effort to ensure that groups like Hamas cannot exploit loopholes in the digital asset ecosystem." Adeyemo also stated that "dollar-backed stablecoin providers" outside the US should not use the US dollar if they do not have procedures to prevent terrorists from using their platforms.

Tether, the issuer of the third-largest digital currency USDT, has frozen $225 million believed to belong to a human trafficking syndicate in southeast Asia. The self-custodied digital wallets holding USDT were linked to a "pig butchering" scam, and Tether worked with crypto exchange OKX and blockchain analysis firm Chainalysis to track the funds and alert the authorities. Tether CEO Paolo Ardoino said the collaboration with the U.S. Department of Justice underscores the company's dedication to fostering a secure environment and setting a new standard for safety within the crypto space. However, Tether is a controversial company that has been slow to provide documentation to prove the backing of USDT and is not independently audited.