The non-profit ethics organization Campaign for Accountability (CfA) has heightened accusations of money laundering against Circle, issuing a fresh open letter on December 14. The letter alleges that the issuers of the USD token are enabling the financing of terrorist organizations, echoing claims initially made in a November 9 letter to U.S. Senators Elizabeth Warren and Sherrod Brown. In response, Circle refuted these allegations on November 11, dismissing them as founded on unverified social media posts.
Addressed again to both U.S. senators and signed by CfA's executive director Michelle Kuppersmith, the new letter specifically scrutinizes Circle's Cross-Chain Transfer Protocol (CCTP). This blockchain protocol allows users to transfer USDC across various networks, including Tron. The letter highlights concerns that Circle's utilization of cross-chain transfer protocols could potentially facilitate the swiftest-growing illicit financial instrument in the digital asset realm. It notes Tron's involvement, citing its mention in multiple law enforcement actions related to organized crime groups and sanctioned entities in multi-billion dollar transactions, despite Tron founder Justin Sun's denial of money laundering charges in 2019.
Kuppersmith asserts that Circle has disclosed a financial relationship with Sun, mentioning Circle's head of public policy, Mr. Dispater's statement acknowledging their past dealings. However, the letter emphasizes a lack of elaboration on the nature of their connection after Circle stated it no longer provides banking services to Sun and his affiliates, a detail previously unknown to CfA.
According to CfA, recent evidence has surfaced against Tron, referencing a Reuters report indicating Tron's association as a cryptocurrency transfer platform linked to groups designated as terrorist organizations by Israel, the United States, and other countries. The letter relies on quotes from financial crime experts and blockchain investigation specialists featured in Reuters, citing their interviews as evidence supporting Tron's alleged involvement.
Circle chose not to offer further comments on the matter beyond its response to CfA's initial letter on November 11. Concerns about cryptocurrency terrorism financing intensified after the conflict between Israel and Hamas erupted on October 7. Elliptic, a blockchain analytics platform, previously claimed in October that Tron's SunSwap protocol had become a preferred method for money laundering among terrorist groups. However, Elliptic later clarified that media outlets had exaggerated the value of the transactions when quoting their report.
