Nonprofit ethics group Campaign for Accountability (CfA) despatched a letter to U.S. Senators Elizabeth Warren and Sherrod Brown on Nov. 9 to current them with data on the alleged use of cryptocurrency in cash laundering. The letter mentioned the Tron blockchain and stablecoin issuer Circle in explicit.
In the letter signed by CfA govt director Michelle Kuppersmith, it’s alleged that USD Coin (USDC) issuer Circle has intensive ties to each Justin Sun’s Tron Foundation (TRX) and main Wall Street traders comparable to Goldman Sachs, Bank of New York Mellon and Blackrock.
Kuppersmith referred to as Circle’s connections to Wall Street “surprising” in light of its supposed lack of regulation and Tron’s alleged connections with terrorism financing.
Tron is under investigation by the U.S. Securities and Exchange Commission for unregistered securities sales and has been linked to the alleged financing of the Palestinian Islamic Jihad and possibly Hamas and Hezbollah, the letter outlined. Meanwhile, it claimed that $400 million worth of USDC is in the Tron ecosystem. The letter said:
“Recently published studies and reports of law enforcement operations indicate a prominent US- based cryptocurrency company backed by major Wall Street investment houses [Circle] may be directly or indirectly compromised by its integration with an Asia-based network of trading platforms and cryptocurrencies.”
That community, Tron, “has been named in multiple international law enforcement actions involving billions of dollars in transactions by alleged organized crime groups and sanctioned entities.”
These issues transcend the problems raised in the letter the senators, together with over 100 different legislators, despatched to the National Security Advisor and Treasury Undersecretary for Terrorism and Financial Intelligence, Kuppersmith added. The letter referred to was sent by the bipartisan group of lawmakers on Oct. 17. Crypto advocacy teams took issue with several of the claims made in that letter.
Furthermore, the letter questions Circle’s obvious lack of regulation, and its operation of an “unregulated cross chain protocol.”
“While Goldman, BNY and Blackrock are all registered with and controlled by a number of federal and state banking and securities authorities, Circle has both averted or failed to topic itself to main prudential regulation since its founding a decade in the past, a priority Campaign for Accountability flagged to the SEC in May of 2022,” the letter outlines.
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On Nov. 10, the CfA additionally submitted a touch upon the Department of Treasury Financial Crimes Enforcement Network’s October proposal to designate crypto mixers as money-laundering hubs.
The proposal “is worthwhile but may soon be obsolete unless the scope of the regulation is broadened to include newer methods criminal groups have adopted using virtual currencies,” the group stated.
Despite being a US firm, Circle has both averted or failed to topic itself to main or prudential regulation since its founding a decade in the past, a priority Campaign for Accountability flagged to the SEC in May of 2022. https://t.co/4s8w98JL8S
— Campaign for Accountability (@Accountable_Org) November 9, 2023
In the remark, the CfA discusses cross-chain protocols and Sun’s SunSwap decentralized trade protocol, which blockchain forensics agency Elliptic has recognized as “the medium where terrorist organizations obtain the necessary [digital currency].”
The group provides that “Sun is reported to have direct ties to the Communist Party of China,” citing a report that Sun participated in a analysis undertaking at China’s Central Party School.
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