Nonprofit Group Raises Concerns About Cryptocurrency Use in Money Laundering
A nonprofit ethics group, Campaign for Accountability (CfA), recently reached out to U.S. Senators Elizabeth Warren and Sherrod Brown to provide information on the alleged use of cryptocurrency in money laundering. The letter, signed by CfA executive director Michelle Kuppersmith, specifically discussed the Tron blockchain and stablecoin issuer Circle.
The letter raised concerns about USD Coin (USDC) issuer Circle’s extensive ties to both Justin Sun’s Tron Foundation (TRX) and major Wall Street investors like Goldman Sachs, Bank of New York Mellon, and Blackrock. Kuppersmith highlighted the surprising connections between Circle and Wall Street, especially given Tron’s alleged links to terrorism financing.
According to the letter, Tron is under investigation by the U.S. Securities and Exchange Commission for unregistered securities sales and has been associated with the alleged financing of terrorist organizations. The letter also claimed that $400 million worth of USDC is in the Tron ecosystem.
Crypto Advocacy Groups React
In response to these concerns, over 100 legislators sent a letter to the National Security Advisor and Treasury Undersecretary for Terrorism and Financial Intelligence. However, crypto advocacy groups have taken issue with some of the claims made in that letter.
Furthermore, the letter from CfA questioned Circle’s apparent lack of regulation and its operation of an “unregulated cross-chain protocol.” It also highlighted that while major Wall Street investors are regulated by federal and state authorities, Circle has avoided or failed to subject itself to primary prudential regulation since its founding a decade ago.
Hot Take: Reactions to the Allegations
The allegations raised by Campaign for Accountability regarding cryptocurrency use in money laundering have sparked concerns about potential ties between major financial institutions and unregulated cryptocurrency companies. These allegations may prompt further scrutiny from regulatory authorities and lawmakers as they seek to address issues related to money laundering in the crypto space.
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