Circle to end USDC support on Justin Sun’s Tron Network

Circle, the company behind the widely-used USD Coin (USDC), announced it will stop supporting its stablecoin on the Tron blockchain. The issuer said the move is part of Circle’s ongoing efforts to ensure USDC maintains its reputation as a trusted, transparent, and safe digital currency.

Starting immediately, Circle will halt minting new USDC tokens on the Tron network and plans to gradually wind down its support for Justin Sun’s platform . The company added that it will support for Circle Mint business customers’ USDC transfers to alternative blockchains until February 2025, advising retail users and non-Circle clients to shift their Tron-based USDC to supported blockchain networks.

While Circle didn’t specify the reasons behind its decision to cut ties with Tron, it mentioned that such moves are part of a routine evaluation of blockchain networks to align with its risk management framework. This decision was described as the culmination of a detailed review by various departments within Circle, including business, compliance, and more.

The announcement comes at a time when Circle plans to public in the U.S., boasting a nearly $28 billion market capitalization for USDC, trailing only behind Tether (USDT) in the stablecoin market. This strategic shift away from Tron follows previous clarifications from Circle in November 2023, refuting claims of service provisions to Tron’s founder, Justin Sun, amid ethical concerns raised by the Campaign for Accountability group. The group’s letter to U.S. Senators highlighted Tron’s alleged connections to organized crime and sanctioned entities.

In a detailed letter addressed to U.S. Senators Sherrod Brown and Elizabeth Warren, Circle’s Chief Strategy Officer, Dante Disparte, responded to claims made by the Campaign for Accountability. The watchdog group had suggested in a letter to the senators that Circle, along with TRON founder Justin Sun and the US-based stablecoin issuer, might be involved in financing terrorist organizations.

Addressing the allegations about facilitating terror financing, Circle pointed out that public blockchain records showed only a minimal amount of Circle’s USD Coin (USDC), $160, was transferred between wallets linked to the Palestinian Islamic Jihad, as per the asset seizure by Israeli authorities in July. Moreover, he clarified that none of these funds originated from Circle.

Adding to Tron’s challenges, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Sun and the Tron Foundation in March 2023, accusing them of offering unregistered securities and engaging in manipulative trading practices, which Sun has denied.

The SEC alleges that the Chinese entrepreneur and his companies conspired to distribute billions of cryptoassets and artificially inflate trade volumes in order to lure in investors. The federal agency also claims that Sun manipulated the price of BitTorrent’s BTT token.