Watchdog Group Writes To US Senators On Circle’s Alleged Links To Terrorist Financing

Campaign for Accountability (CfA), a non-profit ethics watchdog organization, has written a letter to popular anti-crypto US senators Elizabeth Warren and Sherrod Brown, alerting them to possible links of Circle, the USD Coin (USDC) stablecoin issuer, to terrorist financing activities. 

Circle Compromised By Integration With TRON, CfA Says

In its letter dated November 9, CfA states that its recent discovery suggests additional concerns over the use of crypto for money laundering, which involves more than the issues raised by Warren and Brown, alongside 100+ legislators in a recent letter to the National Security Advisor and Treasury Undersecretary for Terrorism and Financial Intelligence. 

The watchdog group begins by referencing recent law enforcement agencies’ reports, which indicate that Circle, a US-based cryptocurrency company, could be directly or indirectly involved in dodgy activities due to its integration with TRON, an Asia-based network currently involved in multiple international lawsuits.

Today, CfA sent a letter to @SenSherrodBrown & @SenWarren alerting them to info around the role crypto entrepreneur Justin Sun, his blockchain TRON, and the US-based stablecoin issuer Circle may be playing in the financing of terrorist organizations. https://t.co/cEukrlC0XL

— Campaign for Accountability (@Accountable_Org) November 9, 2023

CfA notes that over $400 million worth of USDC, a dollar-equivalent stablecoin issued by Circle, is currently present in the TRON ecosystem, which they find quite alarming as the TRON network is under investigation in regard to billion-dollar transactions by suspected crime groups and internationally sanctioned parties.

For context, The Campaign for Accountability stated that in July 2023, the National Bureau for Counter-Terror Financing of Israel issued an assets seizure directive targeted at Palestinian Islamic terrorist group Jihad. The directive pinpointed 26 TRON wallets holding a total value of $93 million valued in three different assets, namely USDC, USDT Tether, and TRON’s native token, TRX. 

Furthermore, CfA quoted a report by crypto analysis platform ChainArgos, which stated that several addresses that redeem large quantities of USDC for USD have also been receiving funds from wallets tagged as belonging to the Hamas and Hezbollah terrorist groups by Israeli intelligence.

The ethics watchdog group believes that Circle’s links to these suspicious activities should be given more attention, especially considering the company’s bankers and asset managers, which include major Wall Street Giants such as Goldman Sachs, Bank of New York Mellon (BNY), and BlackRock Inc. 

CfA Slams Regulation Agencies For Circle’s ‘Non-Accountability’

In its letter to Warren and Brown, the Campaign for Accountability attributed the suspected links of Circle with terrorism financing to a lack of oversight. The ethics group noted that, unlike most cryptocurrency firms such as BitGo, Coinbase, or Circle partners, namely Goldman Sachs, BNY, and BlackRock, the USDC issuer is not registered with any regulatory body in the United States.

CfA criticized the US State regulators, the US Securities and Exchange Commission (SEC), and other regulators for allowing a company responsible for over $25 billion in cryptocurrency to operate for a decade without any oversight.

The watchdog group believes that under the appropriate regulatory authority, Circle would have been prevented from issuing the USDC token on foreign “suspicious” networks such as TRON, which likely falls short of US compliance standards. 

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