Crypto Clarity: Circle's Resilience Amid Allegations

Circle, a prominent issuer of Stablecoin, has categorically dismissed baseless allegations surrounding its purported involvement in illicit financing activities. In a comprehensive letter directed to esteemed US Senators Sherrod Brown and Elizabeth Warren, the company explicitly stated that it steadfastly refrains from providing banking services to Justin Sun, the Tron Foundation, or HTX (formerly known as Huobi Global).

Taking swift and resolute action in February 2023, Circle initiated the termination of all accounts linked to Sun and entities associated with him.

Responding to Allegations of Illicit Financing

In a robust rejoinder to a previous correspondence from the non-profit organization Campaign for Accountability (CfA), Dante Disparte, Circle's Chief Strategy Officer and Head of Global Policy, meticulously addressed the accusations. Disparte pointed out the myriad errors, omissions, and misleading information within the organization's communication.

Circle underscored its unwavering commitment to regulatory compliance, citing adherence to the Bank Secrecy Act (BSA), anti-money laundering laws, and counter-financing of terrorism regulations. Emphatically, the company clarified that it neither directly nor indirectly supports Hamas or any illicit actors, reiterating the absence of banking services provided to Justin Sun.

“Circle does not function as a banking institution for Justin Sun. Neither Mr. Sun nor any entity under his ownership or control, including the TRON Foundation or Huobi Global, currently maintains accounts with Circle. Despite the absence of specific designations by the US government for Mr. Sun or his entities, Circle proactively terminated all accounts associated with him and his affiliated companies in February 2023.”

Against the backdrop of the recent Hamas attack on Israel, heightened scrutiny emerged regarding the potential involvement of crypto entities in terrorist financing. This prompted the CfA to call on Congress to scrutinize the role of both foreign and domestic crypto companies in financing terrorism.

Persisting in their scrutiny, the non-profit watchdog connected Circle and Tron founder's business ties from the announcement of USDC on the Tron blockchain in 2021 to the National Bureau for Counter Terror Financing of Israel issuing an asset seizure order in July 2023. This order targeted the Palestinian Islamic Jihad, revealing 26 Tron wallets containing over $93 million in various cryptocurrencies, including USDC.

The CfA alleged that Circle and Sun maintained business ties despite Sun's controversial history, including accusations of coin price manipulation. Additionally, the CfA claimed that Circle operated without adequate regulatory oversight, even on foreign cryptocurrency networks that may fall short of US compliance standards.

Michelle Kuppersmith from CfA expressed astonishment at reputable financial institutions like Goldman Sachs and BlackRock engaging in business with Circle, urging investors, bankers, and asset managers to consider the potential flow of money to suspected terrorist accounts as a significant concern.

Circle Responds with Assurance of Rigorous Oversight Amid Accusations

Despite the alarming claims by the CfA, Circle clarified that it operates under the regulation of the Ohio Department of Commerce Division of Financial Institutions as a Money Transmitter. The Massachusetts Division of Banks also recognizes Circle as a Foreign Transmittal Agency.

Moreover, Circle holds licenses for Virtual Currency and Money Transmission from the New York Department of Financial Services, along with approvals from 45 other US states and territories.

In a move to assuage concerns, the stablecoin issuer emphasized its regulatory compliance, being acknowledged as a Money Services Business by FinCEN. Circle also highlighted its commitment to adhering to regulations enforced by OFAC, along with compliance with sanctions imposed by the US, EU, UN, and other relevant regimes.

Adding a splash of anticipation to its narrative, Circle revealed its exploration of the possibility of becoming a publicly traded company in the early months of 2024.

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