Nonprofit CfA Reasserts Money Laundering Claims Against Digital Currency Issuer Circle
Summary:
The non-profit organization Campaign for Accountability (CfA) has reiterated its allegations of money laundering against Circle, a digital currency issuer. The CfA claims that Circle's Cross Chain Transfer Protocol facilitates illegal transactions via networks like Tron, which has allegedly been involved in illicit activities. The CFa also suggested that Circle admitted to a past banking relationship with Tron's founder, Justin Sun. Amid rising concerns of cryptocurrency funding terrorism, Circle refrained from commenting further on the matter.
The non-profit watchdog organization Campaign for Accountability (CfA) has reiterated its allegations of money laundering against Circle, the issuer of the USDC digital currency. According to an open letter from the CfA released on December 14, Circle is aiding in the financial support of terrorist groups. The group had earlier made these accusations in a November 9 letter to US Senators, Elizabeth Warren and Sherrod Brown. Circle deflected these accusations on November 11, citing that they were based on unverified social media content.
The recent communication to the senators was from CfA executive director Michelle Kuppersmith who expressed concerns about Circle's technology, the Cross Chain Transfer Protocol (CCTP), which allows for the transfer of the digital currency, USDC, across multiple networks, including Tron. Kuppersmith's letter stated that Circle's use of its CCTP potentially aids the fastest growing means of illicit digital asset finance. The letter further stated that facilitating transfers to Tron is problematic because the network "has undergone several legal actions involving billions of dollars in transactions related to organized crime groups and entities facing sanctions." Tron's founder Justin Sun had in 2019, refuted allegations of money laundering.
Kuppersmith further insinuated that Circle has acknowledged having banking relations with Justin Sun. The letter highlighted that Circle’s public policy head, Mr. Disparte, wrote only that Circle no longer 'banks' Justin Sun. The CfA interpreted this as indicating a direct past customer relationship between Circle and Sun; information that the CfA previously did not possess. Circle, in reply to the CfA's accusations on November 11, stated that it severed all accounts affiliated with Mr. Sun and his firms in February 2023.
According to the CfA, new evidence has since surfaced against Tron. Referencing Reuters, the group alleges that, "Tron has surpassed its rival in terms of cryptocurrency transactions linked to groups flagged as terrorist organizations by Israel, the U.S., and other nations." This claim allegedly draws on interviews conducted by Reuters with numerous experts in financial crime and blockchain investigations. Circle declined to comment further on the issue when Cointelegraph reached out to them.
Accusations of cryptocurrency funding terrorism have been gaining attention since the commencement of the Israel-Hamas war on October 7. Elliptic, a platform for blockchain analytics, claimed in October that Tron's SunSwap protocol had morphed into one of the most popular vehicles for money laundering for terrorist factions. Nonetheless, Elliptic later asserted that media houses claiming this were overstating the transaction values.
Published At
12/15/2023 8:45:00 PM
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