Stablecoin issuer Circle denies financing Palestinian terrorist groups

Circle, the company behind the USD Coin (USDC), was recently hit with allegations that said that the company may be involved with Palestinian terrorist groups. Circle responded to the allegations, strongly denying that it facilitated funding for terrorists.

Circle no longer has ties to Justin Sun or his affiliated firms

The company sent a detailed letter to US Senators Sherrod Brown and Elizabeth Warren. In the letter, Circle’s Chief Strategy Officer, Dante Disparte, addressed the claims that were recently made against the firm by the Campaign for Accountability.

The watchdog suggested that Circle, alongside Justin Sun, the founder of TRON, may have helped finance terrorist organizations, but Disparte stressed that this is not true. He pointed out that the company is fully regulatory compliant and that it operates as a licensed money transmitter in 46 US states. It also adheres to the US Bank Secrecy Act rules, which were established to prevent money laundering.

Disparte further refuted the claims that Circle had any sort of banking ties to Justin Sun. He added that the company does not have a banking relationship with TRON Foundation either, or Huobi Global (now HTX). He insisted that the company severed all ties with Sun earlier in 2023, and that this has not changed since.

Circle denies financing terrorist groups

After that, Disparate moved on to address allegations concerning facilitating terrorism financing, highlighting that Circle has been cooperating with law enforcement agencies in order to identify fraud and help with any cases of fund recovery where it could offer assistance. One of the entities that the company worked with was the US’ own Secret Service.

Furthermore, he explained that public blockchain records show that only a minimal amount of its stablecoin, USDC, was transferred between wallets that were previously linked to the Palestinian Islamic Jihad, pointing out the figure of only $160. Even this figure doesn’t come from Circle itself but from Israeli authorities, which seized the assets of the terrorist group in July of this year.

Moreover, he stressed that, even though USDC may have been used by the terrorists, the assets did not originate from Circle. In other words, the group had obtained the stablecoin from a different source.

The crypto firm’s letter says that Circle does not facilitate, directly or indirectly, or finance Hamas or any other illicit actor. It does not offer banking services to Justin Sun. Circle’s letter even points out that the US government has not designated Sun, or any of his entities, as Specially Designated Nationals. However, Circle still terminated all accounts that Sun had previously opened back in February, and the same is true for all of his affiliated companies.

Disparate also had a few criticisms of the accusations, stating that they contained errors, omissions, and misleading information. He also added that they lacked corroboration and verification, especially those that came from unverified social media posts.

He then once again pointed out that Circle has always been committed to compliance and that it supported any strengthening of AML regulations in the crypto sector, including the recent legislation proposed by Warren and Senator Roger Marshall.