CfA Raises Concerns Over Alleged Cryptocurrency Abuse in Money Laundering and Terrorism Financing
Summary:
Nonprofit Campaign for Accountability (CfA) sent a letter to U.S. Senators highlighting the alleged use of cryptocurrency in money laundering, focusing on the Tron blockchain and stablecoin issuer Circle. The letter underlined Circle's associations with Wall Street and Tron's reported links to terrorism financing as alarming, claiming around $400 million worth of USD Coin (USDC) is involved in the Tron ecosystem. The CfA also questioned Circle's unregulated operations while expressing concerns over new criminal strategies using virtual currencies and the supposed ties of Tron's Justin Sun to the Communist Party of China.
The nonprofit organization, Campaign for Accountability (CfA), submitted a letter to Senators Elizabeth Warren and Sherrod Brown on November 9, providing them with information on the purported involvement of cryptocurrency in money laundering schemes. The correspondence focused specifically on the Tron blockchain and stablecoin company, Circle. Michell Kuppersmith, the CfA executive director, pointed out in the letter that the Circle, the issuer of USD Coin (USDC), has significant relationships with Justin Sun's Tron Foundation (TRX) as well as major corporations like Goldman Sachs, Bank of New York Mellon, and Blackrock. Wall Street's association with Circle was considered "unexpected" due to the apparent lack of regulatory oversight and Tron's alleged affiliation with terrorist funding. The United States Securities and Exchange Commission is currently investigating Tron for selling unregistered securities and its suspected role in financing terrorist organizations such as the Palestinian Islamic Jihad, Hamas, and Hezbollah, as per the letter. It also highlighted that about $400 million worth of USDC is involved in the Tron ecosystem. According to Kuppersmith, the concerns expressed go beyond those written in the letter that was sent by a bipartisan group of more than 100 legislators to the National Security Advisor and Treasury Undersecretary for Terrorism and Financial Intelligence on October 17. The letter from the CfA also challenged Circle's claimed lack of regulation and its control over an "unregulated cross-chain protocol". On November 10, another comment was submitted by the CfA on the Treasury Financial Crimes Enforcement Network’s proposal from October, to categorize cryptocurrency mixers as hubs for money laundering. The CfA emphasized the necessity to expand the regulation to cover new strategies adopted by criminal entities utilizing virtual currencies. It also mentioned Justin Sun's SunSwap decentralized exchange protocol and cross-chain protocols in the comment. Elliptic, a blockchain forensics company, has identified SunSwap as "the platform used by terrorist groups to acquire necessary [digital currency]". In conclusion, the CfA warned of Sun’s purported direct links to the Communist Party of China.
Published At
11/11/2023 2:41:26 AM
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