KEY POINTS
- A Reuters report said Sun's Tron has become increasingly popular among terror groups
- Circle denied any links to Sun or his companies
- Circle said it cannot be involved in terror financing because it is subject to multiple regulatory regimes
Circle, the global financial tech firm that manages USD Coin (USDC) stablecoin, has denied allegations that it was involved in funding terrorist organizations, and distanced itself from crypto entrepreneur Justin Sun and his Tron Network.
"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," Dante Disparte, Circle's chief strategy officer and head of global policy, wrote in a 13-page letter to U.S. Senate Banking Committee Chairman Sherrod Brown, D-Ohio, and Sen. Elizabeth Warren, D-Mass.
The nonprofit Campaign for Accountability, in a letter sent to the U.S. Senate Banking Committee in early November, alleged that Circle facilitated fund flows to terror groups like Hezbollah and Hamas.
Disparte denied the allegations and said Campaign for Accountability's letter was "replete with errors, omissions, and misleading information." The executive claimed Circle cannot be involved in such activities as it is subject to regulatory regimes and laws centered on money laundering and countering terror financing.
"Circle is subject to multiple regulatory regimes – including the Bank Secrecy Act (BSA) and applicable laws focused on anti-money laundering and countering the financing of terrorism – and has forcefully advocated for a comprehensive federal prudential regulatory regime in the United States," he said.
Moreover, Disparte noted that Circle has been fighting against illicit financial activities, including the use of crypto in terror funding, as part of its business' guiding principles and is a partner to various law enforcement agencies in the U.S. and other countries to ensure USDC is not used for illicit activities.
"First, Circle has long made combating illicit finance activities – including the use of currency in any form to fund terrorism – a guiding principle of our business. Moreover, Circle has always been an active partner of regulators and law enforcement in the United States, Israel, and other jurisdictions to help ensure that our stablecoin, USDC, does not fund illicit activity of any kind. We have a deep history of cooperating with law enforcement and, in the last month alone, were recognized by the U.S. Secret Service for prolonged support identifying instances of fraud and "pig-butchering" scams and assisting in the recovery of funds," Disparte added.
Circle also denied any links to Sun or his companies.
"Second, Circle does not 'bank' Justin Sun. Neither Mr. Sun nor any entity owned or controlled by Mr. Sun, including the TRON Foundation or Huobi Global, currently have accounts with Circle. To date, the U.S. government has not specifically designated Mr. Sun or his entities as Specially Designated Nationals. Nonetheless, Circle terminated all accounts held by Mr. Sun and his affiliated companies in February 2023," Disparte wrote in the letter.
On Monday, Reuters reported that Sun's Tron has become increasingly popular among terror groups. There has reportedly been a significant increase in the number of Tron wallets seized since 2021.
Since it is "quicker and cheaper than its larger rival Bitcoin, Tron has overtaken its rival as a platform for crypto transfers associated with groups designated as terror organizations by Israel, the United States and other countries," the Reuters report said, citing financial crime experts and blockchain investigations specialists.
