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Circle Refutes Alleged Links to Terrorist Financing and Justin Sun

Circle's CSO wrote to U.S. Senators on the Banking Committee in response to claims from the Campaign for Accountability.

Circle's Chief Strategy Officer and Head of Global Policy, Dante Disparte, has written a formal letter to Senators Sherrod Brown and Elizabeth Warren, denying all connections to illicit terrorist financing through Justin Sun's Tron network, following an allegation from the Campaign for Accountability (CfA).

“Let us be perfectly clear:  Circle does not facilitate, directly or indirectly, or finance Hamas (or any other illicit actors).  Nor does Circle bank Justin Sun.”

The CfA complaint stated that crypto entrepreneur Justin Sun, his blockchain Tron, and the U.S.-based stablecoin issuer Circle might be participating in financing terrorist organisations. The organisation claimed that Sun and his companies have “a historical and ongoing relationship” with Circle as it issues USDC on numerous platforms, including the Tron blockchain. The CfA primarily focused on the possibility of “chain hopping,” which could allegedly facilitate money laundering.

The CfA believed that Circle lacks regulation in the U.S. and suggested that Congress examine whether current regulation is adequate to ensure that all stablecoin issuers are complying with AML policy, and whether current sanctions regimes are sufficient to bar foreign actors from evading sanctions by using stablecoins. Earlier in 2022, the CfA had already tried to draw the SEC’s attention to the fact that Circle had either avoided or failed to comply with primary prudential regulation.

According to the response from Circle, it has been combating illicit finance activities, including the use of currency in any form to fund terrorism, for a long time, being an active partner of regulators and law enforcement. The company stated that CfA complaint was full of errors and omissions and false in nature as it was based on misleading information from blockchain firm Elliptic, which has since been corrected. Furthermore, the company highlighted that only a very small amount of crypto, which was found to be connected to Palestinian Islamic Jihad and Hezbollah, was transferred in USDC ($160) and that none of it was acquired from Circle.

Circle specifically pointed out that neither Justin Sun nor any entity he owned or controlled, including Tron Foundation and Huobi, had accounts with Circle, as they had all been terminated in February 2023. Neither Sun nor Tron has commented on the situation.

This March, the SEC filed charges against Sun and three of his companies, Tron, BitTorrent and Rainberry, alleging the unregistered offer and sale of crypto asset securities and market manipulations. We recently wrote about former crypto kings losing their crowns, noting that Sun seemed to have so far avoided that fate. Being a controversial figure, he has often used risky and questionable methods, but the fact that the CfA associate him with terrorist financing is a worrying development.