The Campaign for Accountability (CfA), a nonprofit ethics group, has renewed its allegations against altcoin USD Coin (USDC) issuer Circle, alleging that the company is involved in activities that facilitate terrorist financing. CfA’s latest open letter, published on December 14, intensifies the accusations leveled against US Senators Elizabeth Warren and Sherrod Brown on November 9.
Altcoin projects are being examined
The crux of CfA’s renewed claims centers on Circle’s use of the Cross-Chain Transfer Protocol (CCTP), a technology that allows the transfer of USDC over various blockchain networks, including Tron. CfA chief executive Michelle Kuppersmith expressed concerns in the letter, arguing that CCTP could act as a conduit for illicit financial activity.
CfA’s letter details Circle’s historic business connections with Tron founder Justin Sun. Circle acknowledged it had a previous customer relationship with Sun, Kuppersmith said. However, Circle’s head of public policy, Dante Disparte, announced that all business relationships with Sun and its affiliates have ended as of February 2023. This admission raises questions about the nature and extent of the Circle’s past interactions with Sun.
TRON and alleged terrorist acts
Underlying these allegations is a broader concern that cryptocurrency platforms are being used to finance terrorist activities. Citing a Reuters report, CfA highlighted that Tron is a preferred platform for crypto transfers linked to groups designated as terrorists by various countries, including Israel and the United States. Information obtained from financial crime experts and blockchain research experts supports these claims.
CfA’s letter also cites previous reports from blockchain analysis platform Elliptic that raised concerns that Tron’s SunSwap protocol was being used by terrorist groups to launder money. However, Elliptic later clarified that the size of these transactions may have been exaggerated by some media outlets.
What has been the impact on the cryptocurrency industry?
The CfA’s escalation of allegations against Circle adds another layer to its ongoing scrutiny of cryptocurrency platforms for financial crime. As cryptocurrencies become more widespread, efforts are increasing to ensure that their use complies with legal and ethical standards. Governments and regulators are grappling with the challenges posed by cryptocurrencies, and cases like Circle’s highlight the need for robust compliance mechanisms in the cryptocurrency industry. Focusing on these issues underscores the importance of addressing potential risks and ensuring responsible practices to protect the integrity of the cryptocurrency ecosystem.
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