Circle Denies Illicit Financing Allegations, Affirms Commitment to Regulatory Compliance

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Published: December 01, 2023 at 2:09 am Updated: December 01, 2023 at 2:11 am

Edited and fact-checked:
December 01, 2023 at 2:09 am

In Brief

Circle emphasized its commitment to regulatory compliance and stricter Stablecoin regulations, in a letter to U.S. Senators.

Prominent financial services firm Circle has emphatically denied involvement in illegal financing activities. The company’s Chief Strategy Officer, Dante Disparte, addressed the issue in a detailed letter to U.S. Senators Sherrod Brown and Elizabeth Warren, clarifying Circle’s stance and operations.

Circle has stressed its commitment to combating illicit financial activities, including terrorism funding, as a core principle.

The company, known for its stablecoin USDC, works closely with regulators and law enforcement across various jurisdictions, including the U.S. and Israel, to ensure its digital currency does not facilitate illegal transactions. Recently, Circle’s efforts in combating fraud and supporting fund recovery were acknowledged by the U.S. Secret Service.

“We have a deep history of cooperating with law enforcement and, in the last month alone, 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,” said Circle’s Chief Strategy Officer, Dante Disparte.

The company highlighted inaccuracies in CfA’s claims linking Circle to the financing of Palestinian Islamic Jihad (PIJ) and Hezbollah. Circle emphasized that only a small fraction of the disputed digital assets were in the form of USDC.

Moreover, none of these USDC transfers originated from Circle. Following this, Elliptic, a blockchain analysis firm, along with The Wall Street Journal, revised their earlier reports. Their corrections concerned the scale of crypto transactions by PIJ and Hezbollah.

“Public blockchain ledgers show that of the $93 million in digital assets wallets identified by the Israeli government, only $160 was transferred in USDC among those wallets, and none of that was acquired from Circle,” added Circle’s Disparte. “It is both inaccurate and misleading for CfA 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.”

Circle Decisive Action on Justin Sun’s Accounts

Regarding Justin Sun, a controversial figure in the crypto space, Circle confirmed the termination of all accounts associated with him and his entities, including the TRON Foundation and Huobi Global, as of February 2023. Circle made this decision even though the U.S. government had not designated Sun or his entities as Specially Designated Nationals.

Embodying a culture of compliance, Circle’s workforce includes individuals with extensive experience in law enforcement and government. This diverse team underscores the firm’s dedication to legal and ethical operations.

“Neither Mr. Sun nor any entity owned or controlled by Mr. Sun, including the TRON Foundation or Huobi Global, currently have accounts with Circle. To date, the U.S. government has not specifically designated Mr. Sun or his entities as Specially Designated Nationals. Nonetheless, Circle terminated all accounts held by Mr. Sun and his affiliated companies in February 2023,” said Circle’s Disparte, in a blog post.

In addition, Circle has been a vocal advocate for federal regulation of stablecoins. The firm supports measures that would enforce high standards of reserving, redemption, disclosure, and risk management for stablecoin issuers.

“No other digital asset company has advocated more than Circle for a comprehensive federal framework to govern stablecoins,” explained Circle’s Disparte. “Circle has consistently called for federal prudential regulation of stablecoins to ensure that every issuer must meet the highest reserving, redemption, disclosure, liquidity, and operational risk management standards.”

Circle’s communication with Senators Brown and Warren highlights their willingness to work together on enhancing digital asset regulations. They are also focused on combating financial crimes, including efforts against money laundering and terrorism financing.

This proactive approach by Circle aims to position them as leaders in regulatory compliance. Additionally, they are key advocates in the evolving landscape of digital currency.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti