Circle Denies Links to Terrorist Financing and Justin Sun

Digital currency company Circle pushed back strongly Friday against allegations made by a Washington watchdog group that it helps fund terrorist organizations.

In a letter to Senate Banking Committee Chairman Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass.), Circle Chief Strategy Officer Dante Disparte disputed claims made in a 13-page letter the lawmakers received from the Campaign for Accountability, which asserted that Circle facilitates money laundering by terror groups Hamas and Hezbollah.

Disparte also refuted claims by the group that China-based blockchain platform TRON and its founder Justin Sun are tied to Circle.

“Let us be perfectly clear: Circle does not facilitate, directly or indirectly, or finance Hamas (or any other illicit actors),” Disparte wrote. “Nor does Circle bank Justin Sun.”

On the matter of financial crimes, Disparte emphasized that Circle has cooperated extensively with law enforcement.

“In the last month alone, we 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 wrote.

Allegations about Circle enabling terrorism financing are “replete with errors, omissions and misleading information,” he added.

As for ties to Sun, Disparte said his company cut ties with the controversial crypto founder early this year.

“To date, the U.S. government has not specifically designated Mr. Sun or his entities as Specially Designated Nationals,” Disparte pointed out. “Nonetheless, Circle terminated all accounts held by Mr. Sun and his affiliated companies in February 2023.”

He said this includes the TRON Foundation and Huobi Global.

In its earlier letter, Campaign for Accountability cited an asset seizure in July by Israeli authorities targeting 26 digital currency wallets holding over $93 million linked to Palestinian terror group Palestinian Islamic Jihad. The letter noted stablecoins issued by Circle were among the cryptocurrencies identified in those wallets, along with Tether.

But Disparte countered that public blockchain records show only $160 worth of Circle’s USD Coin (USDC) stablecoin was transferred between those 26 wallets. Furthermore, none of those funds were acquired from Circle, he said.

“It is both inaccurate and misleading for [Campaign for Accountability] to directly cite—without any corroboration or verification—posts on the social media site X asserting that Circle had financed major flows of funds to Hamas or Hezbollah,” Disparte wrote.

In his response, Disparte emphasized that Circle maintains high regulatory standards as a licensed money transmitter in 46 states and is subject to U.S. Bank Secrecy Act rules for combating money laundering.

He added that Circle supports strengthening anti-money laundering rules for cryptocurrencies, backing recent legislation proposed by Warren and Sen. Roger Marshall (R-Kan.).

“We are built on a culture of compliance and take our obligations seriously,” Disparte told Brown and Warren. He noted many Circle employees previously held roles fighting financial crimes at agencies like the CIA, Treasury and Justice departments.

Disparte further asked to meet with Brown’s and Warren’s staffs to discuss bolstering stablecoin oversight, noting that Circle has sought federal regulation that would require stablecoin issuers to meet strict standards for reserves, disclosures, liquidity and risk management.

“No other digital asset company has advocated more than Circle for a comprehensive federal framework to govern stablecoins,” he wrote.

Editor’s note: This story was drafted with Decrypt AI from sources referenced in the text, and fact-checked by Ryan Ozawa.