Circle Officially Refutes Allegations of Illegal Financing and Connections with Justin Sun
Circle, a leading stablecoin issuer, recently addressed and strongly refuted allegations of involvement in illicit fundraising and alleged links to Tron founder Justin Sun. These claims, made by the Campaign for Accountability (CfA), a nonprofit watchdog organization, prompted Dante Disparte, Circle’s chief strategy officer and director of public policy, to write a formal response to U.S. Senators Elizabeth Warren and Sherrod Brown.
In the letter, Disparte categorically denies that Circle was involved in promoting or financing activities related to Hamas or other illicit actors. He emphasizes Circle’s firm commitment to combating illicit financial activities. Circle actively partners with regulators and law enforcement in the United States, Israel, and other jurisdictions to ensure that stablecoins are USDC, will not be used for illegal activities. The company’s commitment to legal compliance was recently recognized by the U.S. Secret Service, which recognized Circle’s efforts to identify fraud and assist in the recovery of funds.
Addressing the specific allegations, Disparte cited an incident in which Israel’s National Counterterrorism Financing Agency identified assets worth $93 million in digital wallets linked to the Palestinian Islamic Jihad (PIJ). A report from blockchain company Elliptic initially suggested that all assets in this wallet were used to fund PIJ, but this was later corrected. According to the public blockchain ledger, only $160 in USDC out of $93 million was transferred between wallets, and none of that money came from Circle. This example highlights Circle’s position on misrepresentation of Circle’s role in alleged unlawful activity.
Circle also clarified its relationship with Justin Sun, stating that it does not provide banking services to Justin Sun and his related entities, including the TRON Foundation or Huobi Global. Despite the lack of specific designation from the U.S. government, Circle terminated all accounts associated with Mr. Sun and his affiliates in February 2023.
Circle also emphasized its status as a highly regulated financial institution. It operates subject to the regulatory frameworks of several U.S. state and federal agencies, including the Ohio Department of Commerce, Division of Financial Institutions, and the New York State Department of Financial Services. As a FinCEN registered financial services company, Circle complies with the Bank Secrecy Act, anti-money laundering laws, and other regulatory standards. Compliance with these regulations is a cornerstone of Circle’s operations, reflecting our commitment to legal and ethical business practices.
In advocating for regulatory reform, Circle has actively supported a comprehensive federal framework governing stablecoins. The company has been actively participating in the legislative process to establish strong retention, redemption, disclosure, liquidity and operational risk management standards for stablecoin issuers. Circle CEO Jeremy Allaire testified before Congress, advocating for standards that would increase the safety and trustworthiness of stablecoin issuers.
Circle’s response to the CfA’s allegations is a strong affirmation of Circle’s commitment to compliance and ethical practices in the digital assets space. The Company is committed to working with regulators to strengthen regulation of digital asset markets and effectively combat money laundering and terrorist financing.
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