TRON (TRX) has been making strides to clean up its network and restore its reputation in the cryptocurrency space. Recent reports show that illicit activity on the TRON blockchain has significantly declined, with illicit volume dropping by a massive $6 billion. This development is seen as a positive sign for the network, which has faced scrutiny due to its association with illegal transactions in the past.

TRON’s Successful Fight Against Illicit Activity

Over the past year, TRON has worked hard to address the concerns surrounding its blockchain’s association with criminal activity. In August 2024, TRON teamed up with Tether and TRM Labs to form the T3 Financial Crime Unit (T3 FCU), a collaborative effort designed to reduce illegal transactions involving USDT and the TRON blockchain. The initiative has already shown promising results, with over $130 million in illicit funds frozen.

According to TRM Labs’ 2024 report, TRON was home to the largest share of illicit cryptocurrency activity, accounting for 58% of the total illicit volume on blockchains. Ethereum, Bitcoin, Binance Smart Chain, and Polygon followed, with significantly lower percentages of illicit activity. However, despite leading in illicit volume, TRON has made a remarkable improvement in 2024, with a $6 billion drop in illegal transactions. This reduction in illicit activity has nearly halved the proportion of criminal transactions on the blockchain.

What’s Driving the Decline in Illicit Volume?

Several factors are at play in this significant reduction of illicit activity on TRON. The blockchain’s concerted efforts to target criminal actors, combined with the success of the T3 FCU initiative, are yielding tangible results. TRON’s strategy has involved restricting and confiscating assets linked to criminal activities, and the numbers show it is making a difference.

The TRM report also revealed that 49% of illicit transactions on TRON were tied to sanctioned entities, while 32% involved blacklisted funds. The ongoing efforts to freeze and seize these assets have had a direct impact on reducing criminal use of the network. As TRON becomes cleaner and more secure, it’s expected to attract more legitimate users, which bodes well for its long-term growth.

Positive Implications for TRX

With illicit volume on the decline, TRON’s native token, TRX, is likely to benefit. As the network becomes safer and more trustworthy, user confidence increases, leading to higher adoption and new users. In the past 24 hours alone, TRX saw a 3.02% increase in value, trading at $0.244 at the time of writing. This uptick follows the positive news about the reduction in illicit activity on the blockchain.

Can TRX Maintain Its Momentum?

While TRX has been experiencing a boost in the short term, the question remains: can it sustain this growth? According to analysis from AMBCrypto, there are strong signs that TRX is gaining upward momentum on the charts. The Relative Strength Index (RSI) for TRX recently made a bullish crossover, indicating that buyers are gaining control of the market while sellers lose steam. This suggests that the altcoin’s momentum is strengthening.

Additionally, the Moving Average Convergence Divergence (MACD) line is moving closer to another bullish crossover, further supporting the notion of sustained positive momentum for TRX. As of now, market sentiment appears to be optimistic, with participants accumulating TRX rather than selling. This trend is confirmed by the sharp decline in netflows to exchanges, which have turned negative. A negative netflow indicates more coins are being transferred out of exchanges than into them, a bullish sign of confidence in the asset.

TRON Whales Are Also Bullish on TRX

In addition to retail investors, TRON whales—large holders of the cryptocurrency—have been showing positive sentiment. Data shows that netflows from large holders have turned positive, indicating that capital inflows from whales have increased after a period of outflows. This signals that the big players in the market are also bullish on TRX, which could contribute to the coin’s continued upward momentum.

What’s Next for TRON and TRX?

Looking ahead, the reduction in illicit volume on the TRON blockchain is expected to have long-term positive effects. As the network cleans up its act, TRON is likely to see increased adoption, more regulatory approvals, and higher usage. This positions the blockchain and its native token TRX for sustained growth in the future.

Moreover, the collaboration between TRON, Tether, and TRM Labs through the T3 FCU marks a significant step in combating financial crimes within the crypto space. With continued efforts to root out illicit actors, TRON could gain a competitive edge as one of the more secure and trusted blockchains in the industry.

For TRX holders, this shift toward a cleaner, more secure network is good news. As more legitimate users flock to the platform, the value of TRX could continue to rise. However, as with any cryptocurrency, market volatility remains a factor, and investors should remain cautious and informed about ongoing developments.

Conclusion

The $6 billion drop in illicit activity on the TRON blockchain is a significant milestone for the network. With its concerted efforts to combat financial crime, TRON is building a reputation as a more secure and trustworthy blockchain. As a result, TRX is seeing positive price action, driven by growing market confidence.

If TRON can continue on this path of cleaning up its network and attracting more legitimate users, it could see further adoption and growth in the coming months and years. Investors should keep an eye on the ongoing developments within the TRON ecosystem, as the decline in illicit volume is just one piece of a much larger picture.