In light of the accountability campaign, the anti-crypto senators have been warned that the threat of terrorist financing using digital currencies is worse than they thought. The CfA sent letters to Senators Brown and Warren on Thursday stating info on using crypto in funding illegal activities, including money laundering.
Using digital currencies in cybercrimes and all other illegal activities has been an issue in the crypto space, and the nonprofit ethics group has reported new developments to the legal officials in discussing the Tron blockchain and Circle, the stablecoin issuer.
CfA letter to senators regarding cryptocurrencies
On November 9, The Campaign for Accountability (CfA), a nonprofit ethics group, sent letters to Senators Sherrod Brown and Elizabeth Warren presenting information on allegations of illicit crypto use. The letter specifically informed on the money laundering and discussed the Circle and Tron platforms.
Signed by Michelle Kuppersmith, the CfA executive, the letter details allegations that the USD Coin issuer, Circle, has links to Tron Foundation by Justin Sun. The stable Coin issuer also has ties to Wall Street investors, including BlackRock, Bank of New York Mellon, and Goldman Sachs.
Kuppersmith also termed Circle’s actions as surprising, related to the connections it has with Wall Street. He highlighted the lack of regulation on the connections between Justin Sun’s company and terrorism financing.
Currently, the United States Securities and Exchange Commission (SEC) is investigating Tron under allegations of selling unregistered securities. Additionally, the executive was even more surprised by the connections Tron has to terrorism by financing Palestinian Islamic Jihad.
The letter also noted its possible financial links to Hezbollah and Hamas. USDC worth $400 million was found in the Tron network and related to illegal activities. The letter stated:
Recently published studies and reports of law enforcement operations indicate a prominent US-based cryptocurrency company backed by major Wall Street investment houses [Circle] may be directly or indirectly compromised by its integration with an Asia-based network of trading platforms and cryptocurrencies.
CfA
The letter added:
Tron has been named in multiple international law enforcement actions involving billions of dollars in transactions by alleged organized crime groups and sanctioned entities.
CfA
Concerns raised in the CfA letter
The concerns raised go beyond the senators, adding to over 100 other legislators, and issued to the National Security Advisory and Treasury Undersecretary for Terrorism and Finance Intelligence. Kuppersmith’s reaction came in as expected as the CfA group advocates for justice taken against terrorism financing without bias on digital currencies.
The bipartisan group comprising of lawmakers sent the letter on October 17 and took issue and made several claims to the popular crypto players. Among other issues raised is Circle lacking regulation and operates under an unregistered cross-chain protocol.
The letter highlighted:
While Goldman, BNY, and Blackrock are all registered with and regulated by multiple federal and state banking and securities authorities, Circle has either 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.
CfA Letter
Recently, on November 10, the CfA suggested its comments regarding the Department of Treasury Financial Crimes Enforcement Network proposal made in October. The comments targeted the designation of crypto mixers under money laundering hubs.
The CfA noted that the proposal “is worthwhile but may soon be obsolete unless the scope of the regulation is broadened to include newer methods criminal groups have adopted using virtual currencies.”
They also added on an X post, ” Despite being a US company, Circle has either avoided or failed to subject itself to primary or prudential regulation since its founding a decade ago, a concern Campaign for Accountability flagged to the SEC in May.”
