X Chairman and CTO Elon Musk alleged that U.S. Institute of Peace (USIP) employees deleted a terabyte of financial data to cover their crimes. The SpaceX boss said the Department of Government Efficiency (DOGE) was able to recover the deleted data as it had a better understanding of the technology.

Musk claimed that the U.S. Department of Government Efficiency (DOGE) was able to recover the data deleted by United States Institute of Peace (USIP) employees to hide financial crimes. The billionaire investor said that the newly created Department of Government Efficiency (DOGE) was able to recover the deleted data as it understood the technology way better.

The Tesla CEO made this known in a post on his X handle on Tuesday, replying to a post claiming that the DOGE team fought for days to gain access to the United States Institute of Peace. The post also claimed that DOGE discovered massive fraud, waste, and abuse, including payments to the Taliban and Iraq.

Musk claims the U.S. government hid crimes by deleting financial data

HOLY SH*T!!! 🤯

ELON MUSK SAYS:

THE US GOVERNMENT "DELETED A TERABYTE OF FINANCIAL DATA TO COVER THEIR CRIMES."

"BUT THEY DON'T UNDERSTAND TECHNOLOGY, SO WE RECOVERED IT."

👀👀👀 pic.twitter.com/OXM0i6eZbR

— Kyle Chassé / DD🐸 (@kyle_chasse) April 1, 2025

Musk accused employees at the US Institute of Peace of deleting a terabyte of financial data to their cover crimes. The statement came after Musk’s DOGE sent employees email notices of their mass firing, the latest step in the President Donald Trump administration’s government downsizing. The emails were sent to personal accounts as most staff members had lost access to the agency’s system on Friday.

The DOGE team fought for days to gain access to the United States Institute of Peace. Eventually, DOGE received help from the FBI and Metro Police and was able to access the agency and discovered massive fraud, waste and abuse-including payments to the Taliban and Iraq.

According to D.O.G.E., the United States Institute of Peace scandal exposed exactly why the No Tax Dollars for Terrorists Act (H.R. 260) was critical. The Musk-led department also claimed that Biden-era bureaucrats funneled $1.3 million to the Al Tadhamun Iraqi League and $132k to a Taliban-linked official—proving systemic failure to track foreign aid. 

“They deleted a terabyte of financial data to cover their crimes, but they don’t understand technology, so we recovered it.”

–Elon Musk 

The Washington Post reported earlier that the U.S. administration had fired nearly the entirety of USIP’s headquarters staff. The institute’s employees told the newspaper that 200-300 people had been fired, while some were offered severance and one additional month of health insurance in exchange for their signatures to waive their rights to sue.

Musk discloses how much money is actually lost to fraud

Musk told Fox Business TV host Larry Kudlow, a former Trump economic adviser, that the Government Accountability Office (GAO) estimated ‘half a trillion dollars’ was lost to federal government fraud in 2024. 

While referring to waste, Musk said most of the federal spending was ‘entitlements’ that needed to be ‘eliminated’ as it cost the country nearly $600 to $700 billion a year. However, using the word ‘eliminate’ in the same breath as ‘entitlements’ set off alarms among Trump’s and Musk’s Democratic critics.

White House Press Secretary Karoline Leavitt defended Musk at a March 11th news briefing, saying that the billionaire was referring to cutting waste, fraud and abuse in those programmes, and Trump was going to protect Social Security, Medicare, and Medicaid.

GAO estimated there were $233 billion to $521 billion in fraudulent payments across the government per year. At the same time, the Office of Management and Budget found a lower figure of federal government fraud, ranging between $4.41 billion and $7.31 billion annually, based on amounts confirmed through judicial or adjudication processes. The estimated losses represented about 3% to 7% of average federal expenditure.

Musk said cutting fraud and waste would help his efforts to slash $1 trillion from the federal budget. He recently held a chainsaw as a symbol of cost-cutting on stage at the Conservative Political Action Conference in National Harbor, Maryland, on February 20th.

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A new report published by blockchain forensic firm TRM Labs in early 2025 outlined a major rise in crypto-fueled drug sales throughout 2024, driven largely by Russian-language darknet marketplaces.

These marketplaces accounted for over 97% of illicit revenue generated through Bitcoin and TRON transactions.

Darknet Markets Generated $1.7 Billion in 2024, TRM Labs Finds

According to the TRM Labs 2025 Crypto Crime Report, Russian-language darknet marketplaces brought in more than $1.7 billion in 2024, continuing a year-over-year increase first noted in 2023.

They benefit from several advantages: low enforcement pressure from Russian authorities, a dead-drop delivery system that reduces physical contact, and a focus on synthetic drugs that are easy to produce locally.

The availability of inexpensive drug precursor chemicals—primarily sourced from China—has further fueled the growth of these platforms.

TRM Labs found that only four Russian-language marketplaces exited the ecosystem in 2024, out of approximately 20 operating during the year.

Even after the takedown of Hydra Market in April 2022, no other major Russian-language darknet markets have been dismantled, allowing them to continue driving illicit crypto drug activity.

The findings by TRM Labs align with other investigations into the intersection of cryptocurrency and the drug trade.

Last month, blockchain analytics firm Chainalysis uncovered direct financial ties between Mexican drug cartels and Chinese suppliers of fentanyl precursors through crypto transactions.

Chainalysis had previously identified over $37.8 million in suspicious transfers involving suspected China-based chemical vendors.

These vendors provided the key ingredients for fentanyl, a synthetic opioid trafficked into the U.S. primarily by groups like the Sinaloa Cartel.

By utilizing crypto transactions, these cartels can efficiently fund and facilitate the production of fentanyl, which is then trafficked into the United States, contributing to the ongoing opioid crisis.

TRM Labs Highlights Surge in Vendor Shop Crypto Drug Sales

The TRM Labs report also revealed that crypto use in vendor shop drug sales more than doubled in 2024, reaching over $600 million in volume.

This shift was accelerated by the arrest of Telegram’s founder, Pavel Durov, in August 2024.

Telegram, once a popular platform for selling drugs due to its security and perception of non-cooperation with law enforcement, saw many of its drug vendors migrate to alternative platforms like Signal, Session, and WhatsApp.

The arrest of Durov heightened fears that Telegram would start cooperating with authorities, forcing vendors to find new places to operate.

The ongoing move toward decentralized platforms suggests the crypto drug ecosystem will remain fluid, creating new enforcement challenges.

TRON Leads Illicit Crypto Transactions in 2024

TRM Labs reported that TRON accounted for 58% of illicit crypto activity in 2024, followed by Ethereum at 24% and Bitcoin at 12%. Binance Smart Chain and Polygon each made up 3%.

USDT usage also surged, particularly among Latin American cartels.

A local investigation reported that groups in Mexico and Colombia relied on USDT due to its stable value and ease of transfer.

Cartels reportedly used USDT to fund operations, sometimes profiting from price gaps across different crypto markets.

According to a 2024 report citing unsealed court documents, USDT was widely available in Mexico at a discount, allowing resellers to profit in countries like Colombia.

While market dynamics may have shifted since, the cited data illustrates how cartels had previously exploited crypto ecosystems.

The Numbers Aren’t Just Statistics

Behind the billion-dollar figures are real consequences: lives lost to fentanyl, cities strained by addiction, and digital tools repurposed for harm.

TRM Labs has provided a snapshot of an ecosystem that continues to evolve beneath the surface.

These aren’t distant problems—they are immediate, and they affect public safety, financial systems, and global cooperation.

Treating crypto as neutral infrastructure misses the point when it has become a tool for scale and secrecy.

Lawmakers and platforms alike will need to decide what responsibility they’re willing to accept. That answer may shape how the next wave of digital finance unfolds.

Frequently Asked Questions (FAQs)

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