The Campaign for Accountability (CfA) sent a letter to U.S. Senators Elizabeth Warren and Sherrod Brown on Nov. 9, expressing their concerns about the alleged use of cryptocurrency in money laundering. The letter was signed by CfA executive director Michelle Kuppersmith and raised questions about USD Coin (USDC) issuer Circle and its extensive ties to both Justin Sun’s Tron Foundation (TRX) and major Wall Street investors such as Goldman Sachs, Bank of New York Mellon and Blackrock.
The letter noted that Circle’s connections to Wall Street were “surprising” due to its supposed lack of regulation and Tron’s alleged connections with terrorism financing. It further mentioned that Tron is under investigation by the U.S. Securities and Exchange Commission for unregistered securities sales and has been linked to the financing of the Palestinian Islamic Jihad, Hamas, and Hezbollah. It was claimed that $400 million worth of USDC is in the Tron ecosystem.
The letter referred to was sent by the bipartisan group of lawmakers on Oct. 17. Crypto advocacy groups took issue with some of the claims made in that letter. Kuppersmith added that the concerns go beyond the issues raised in the letter. The letter questioned Circle’s lack of regulation and its operation of an unregulated cross chain protocol. It was mentioned that Goldman, BNY, and Blackrock are all registered with and regulated by multiple federal and state banking and securities authorities, while Circle has avoided or failed to subject itself to primary prudential regulation since its founding a decade ago, a concern Campaign for Accountability flagged to the SEC in May of 2022.
The CfA also submitted a comment on the Department of Treasury Financial Crimes Enforcement Network’s October proposal to designate crypto mixers as money-laundering hubs. The organization discussed cross-chain protocols and Sun’s SunSwap decentralized exchange protocol, which blockchain forensics firm Elliptic has identified as the medium where terrorist organizations obtain the necessary digital currency. It was noted that Sun is reported to have direct ties to the Communist Party of China, citing a report that Sun participated in a research project at China’s Central Party School.