- Circle refuted the accusations made by CfA, denying ties with Justin Sun.
- Sentiment around TRX reached new lows, price was impacted.
Circle has strongly refuted accusations of engaging in unlawful financial activities. In a letter directed to U.S. Senators Sherrod Brown and Elizabeth Warren, Circle explicitly rejected claims of offering services to illicit entities.
What’s happening behind the scenes
This letter was in response to the allegations against Circle laid out by a non-profit known as Campaign for Accountability (CfA).
CfA asked the SEC to check out Circle’s proposed SPAC.
CfA’s complaint highlights numerous red flags: Circle recently settled with the SEC for $10.4 million for operating an unlicensed exchange, the SPAC failed to disclose Circle executives’ involvement in a lawsuit alleging investors were defrauded
For Context, SPAC stands for Special Purpose Acquisition Company. It’s a shell company created just to find and buy another company. In this case, Circle, a stablecoin issuer, wants to join with a SPAC.
The problem is, there are concerns and red flags about the deal, like Circle settling with the SEC before and not revealing everything about its executives in a lawsuit. The Campaign for Accountability wants the SEC to look into these issues to protect investors.
The CfA letter also claimed that Circle has extensive ties to Sun’s Tron Foundation and major Wall Street investors and that Sun’s cross-chain protocol, SunSwap, is often used for money laundering.
Circle fires back
Circle has responded strongly to the CfA letter. According to Circle, the letter from CfA contains mistakes and is misleading.
Circle emphasized that they do not support or finance Hamas or any illegal groups, and they don’t provide banking services to Justin Sun.
The company stated that they are regulated by various authorities and comply with rules and regulations. Circle also highlighted their efforts in combating illicit finance and their cooperation with law enforcement.
They clarified details regarding a report on the financing of Palestinian Islamic Jihad, emphasizing inaccuracies in CfA’s claims.
Additionally, Circle mentioned terminating accounts related to Justin Sun in February 2023 and emphasized their advocacy for federal regulations in the digital asset industry.
Larger impacts
Even though Circle may be off the hook, Justin Sun and TRX may continue to be impacted by these developments. At press time, TRX was trading at $0.10338 and its price had fallen by 0.08% in the last 24 hours.
How much are 1,10,100 TRXs worth today?
The weighted sentiment around Tron plummeted in the last few days. This meant that the number of people criticizing Tron on social media had grown.
These factors could affect the token even further.
Source: Santiment
