Digital currency company Circle has vigorously countered accusations from the Campaign for Accountability, a Washington-based watchdog group, that it is involved in facilitating terrorist funding and has ties with controversial crypto figure Justin Sun. In detailed letters to U.S. Senators Sherrod Brown and Elizabeth Warren, Circle’s Chief Strategy Officer, Dante Disparte, laid out the company’s position, denying any connection to illicit activities and emphasizing its compliance with stringent regulatory standards.
Addressing accusations of terrorist financing
The Campaign for Accountability had previously sent a 13-page letter to the senators, alleging Circle’s involvement in money laundering activities linked to terror groups Hamas and Hezbollah. However, Disparte firmly refuted these claims. “Let us be perfectly clear: Circle does not facilitate, directly or indirectly, or finance Hamas (or any other illicit actors),” he asserted in his response. He highlighted Circle’s cooperation with law enforcement agencies, including recent recognition by the U.S. Secret Service for aiding in fraud identification and fund recovery operations.
Disparte also addressed specific allegations concerning Circle’s USD Coin (USDC) stablecoin, found in digital wallets seized by Israeli authorities in July. These wallets were allegedly linked to the Palestinian terror group Palestinian Islamic Jihad. Disparte clarified that public blockchain records show a mere $160 worth of USDC was transferred between these wallets, and none of these funds originated from Circle. He criticized the Campaign for Accountability for citing unverified social media posts in their allegations.
Severing ties with Justin Sun and compliance efforts
Another significant point in Circle’s defense was its relationship with Justin Sun, founder of the TRON blockchain platform. The watchdog’s letter had insinuated connections between Sun and Circle, but Disparte clarified that Circle had severed all ties with Sun and his associated entities, including the TRON Foundation and Huobi Global, as of February 2023. This decision was made despite the U.S. government not designating Sun or his entities as Specially Designated Nationals.
Disparte emphasized Circle’s commitment to regulatory compliance as a licensed money transmitter in 46 states, adhering to U.S. Bank Secrecy Act rules designed to combat money laundering. He further noted that many Circle employees have backgrounds in financial crime prevention at agencies like the CIA, Treasury, and Justice departments. This culture of compliance, according to Disparte, underscores Circle’s dedication to upholding high standards in the crypto finance world.
Advocating for robust regulatory frameworks
In his correspondence with the senators, Disparte also expressed Circle’s support for strengthening anti-money laundering rules in the cryptocurrency sector. He endorsed recent legislation proposed by Warren and Senator Roger Marshall (R-Kan.), aimed at enhancing regulatory oversight. Circle, as per Disparte’s letter, has been proactive in seeking federal regulation for stablecoin issuers, advocating for strict standards regarding reserves, disclosures, liquidity, and risk management.
Disparte’s final remarks included an invitation to Senators Brown and Warren to discuss ways to bolster stablecoin oversight. He reiterated Circle’s position as a strong advocate for comprehensive federal frameworks governing stablecoins. This proactive stance on regulation, combined with the company’s robust compliance culture, forms the cornerstone of Circle’s efforts to distance itself from any allegations of illicit activities and associations.