Watchdog team doubles down on Circle-Tron money laundering claims
Non-profit ethical group Campaign for Accountability (CfA) has doubled down on its money laundering claims against Circle, publishing a new open letter on December 14 alleging that the USD Coin (USDC) issuer is facilitating the financing of terrorist organizations.
NEW: This morning, CfA sent a letter to @SenSherrodBrown and @SenWarren highlighting incomplete and misleading information in response to previous concerns about its operations.https://t.co/88urQqriKF
— Accountable Campaign (@Accountable_Org) December 14, 2023
CfA first made these claims in a November 9 letter to United States Senators Elizabeth Warren and Sherrod Brown. Circle responded to the claims on November 11, saying the allegations were based on unsubstantiated, unverified social media posts.
The new letter was also sent to the two US senators and signed by CFA Executive Director Michelle Coopersmith. In the new letter, Coopersmith took aim at Circle's Cross Chain Transfer Protocol (CCTP), a blockchain protocol that allows users to transfer USDC between multiple networks, including Tron.
“The latest circular chain transfer protocol can be used to facilitate the fastest growing vehicle for illicit finance in the digital asset space,” the letter states. Facilitating transfers to Tron is problematic because the network “has been given the name of numerous law enforcement operations by organized crime groups and sanctioned entities that conduct multibillion-dollar transactions,” he said. Tron founder Justin Sun He denied the money laundering allegations in 2019.
Related: Circle Cross-Chain USDC Transfer Protocol for Ethereum, Avalanche Launches
Coopersmith says he's into “banking” the Cirque Justin Sun. “Instead of going into detail about his relationship with Mr. Sun, [Circle head of public policy] The letter said Mr Depart only told the club not to stop ‘banking' Justin Sun.
According to Kuppersmith, this indicates that “Circle had a direct client relationship with Mr. Sun that we did not previously know.” In Circle's Nov. 11 response to the CFA, Disparte said, “Circle terminated all accounts held by Mr. Sun and his companies in February 2023.” He said.
The CfA says new evidence has recently emerged on Tron. “Tron has made its rival a platform for crypto transfers linked to groups designated as terrorists in Israel, the US and other countries,” the letter said, citing Reuters. The Reuters article cites “interviews with seven financial crime experts and blockchain investigation specialists” for this claim.
Other than the November 11 letter, Circle declined to comment further on the matter when contacted by Cointelegraph.
Claims about crypto-terrorist financing have come to the fore since the Israel-Hamas war broke out on October 7. In October, blockchain analytics platform Elliptic Tron said SunSwap protocol has become one of the most popular methods of counterfeiting money for terrorist groups. However, after several media outlets began citing the report, Elliptic said these outlets were exaggerating the value of these transactions.
