According to Circle’s policy representative, the business has proof that Tether acts as a facilitator in the funding of terrorism.
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The U.S. government has been encouraged to take action against noncompliant foreign digital asset enterprises, some of which include Coinbase and Circle, the two largest cryptocurrency companies.
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Congress was informed on Thursday by Coinbase’s Legal Director of Financial Crimes, Grant Rabenn, that criminals are searching for “offshore platforms” in order to evade the anti-money laundering regulations that are enforced by “onshore regulated exchanges.”
Coinbase Against Offshore Exchanges
In an effort to get around stringent anti-money laundering regulations put in place by regulators, such firms, according to Rabenn, “often play jurisdictional wack-a-mole,” anticipating that authorities “won’t care.”
At the “Crypto Crime in Context” hearing of the House Financial Services Committee on Thursday, Rabben stated, “The U.S. government should use all of its existing tools to go after these platforms.”
“Many recent enforcement actions in the crypto anti-money laundering space are good news – accountability should happen,” he added.
Arguably, the largest cryptocurrency exchange in the world, Binance, agreed to pay an unprecedented $4 billion fine in November for breaking anti-money laundering (AML) regulations after the Department of Justice (DOJ) conducted a years-long investigation.
The company’s founder, Changpeng Zhao (CZ), was compelled to step down, leading to Richard Teng taking over as the new CEO. Teng is steering the company towards a new direction with an emphasis on adhering to regulatory standards and enhancing financial openness. Additionally, he is overseeing the establishment of a physical base in Abu Dhabi.
Circle Declares It’s Time to Address Tether
In the past, the business has frozen its dollar-pegged USDC tokens that end up in the wrong hands by using smart contract technology. The company asserts that other businesses don’t think they should be exempt from AML laws, which is why they haven’t taken similar actions.
Caroline Hill is Circle’s Senior Director of Global Policy and Regulatory Strategy. “I believe no company should be allowed to reference the U.S. dollar without having democratic values inside their U.S. dollar-backed stablecoin,” Hill stated.
“I hope that they’re looking at this seriously given Tether’s reputation, as well as the data that we’ve seen that they’re contributing to terrorist financing and other malign activities,” she added.
When questioned about Tether, Circle’s main rival, Hill mentioned that the government should possess the necessary power to act against Cantor Fitzgerald, the entity in charge of holding the majority of Tether’s reserve assets, accusing it of aiding in terrorist financing activities.
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