Dante Disparte, the Chief Strategy Officer and Head of Global Policy at Circle, a financial technology firm and stablecoin issuer, has stated that the majority of "illicit" cryptocurrency activities involve a small number of "entities, products or other services." Disparte made these comments in an opinion piece titled "Crypto Does Not Have an Illicit Finance Problem, Bad Actors Do," published by CoinDesk.
"Still, unlike banking, 'crypto' writ large bears a disproportionately heavy reputational burden, despite the fact that most illicit activity accrues to named individual entities, products or other services," said Disparte. "A recent TRM Labs report titled The Illicit Crypto Economy underscores as much. Thus, the continual use of a catchall term 'crypto,' is like blaming all banks for the misdeeds of a single bank. Imagine if every bank in the world had to atone for the sins of a single bank such as Danske Banke, which, in 2022, pleaded guilty to $212 billion of Russia-linked money laundering?"
According to a report by TRM Labs, the share of "illicit" funds in all crypto value decreased from 0.70% in 2022 to 0.63% in 2023. The report also noted that approximately 45% of all illicit crypto volume occurred on the TRON (TRX) blockchain. Furthermore, it was revealed that Hamas, a terrorist organization, "announced moratoriums on crypto donations" in 2023, likely as a response to increased international law enforcement scrutiny.
During an April 9 Senate Banking Committee hearing, Deputy Treasury Secretary Wally Adeyemo testified that the Treasury Department has seen terrorist groups attempting to exploit innovations in cryptocurrencies. According to his testimony, he cited an instance from five years ago when al-Qaeda operated a bitcoin money laundering network. Adeyemo also mentioned that more recently, Hamas received crypto from the Islamic Revolutionary Guard Corps-Qods Force. He emphasized the need for an enforcement regime capable of preventing such activities as more terrorists, transnational criminals and rogue states turn to digital assets.
Disparte highlighted Tornado Cash and Terra-Luna as examples of products or platforms that "create a nexus of bad activity," according to his opinion piece. "The digital assets industry, like banking, is not monolithic," Disparte said. He said that as Senators consider Adeyemo's testimony, they should "also weigh the consequences of more than five years of U.S. policy inaction in regulating the very wayward corners of the crypto industry that pose the greatest threats to consumers, markets and, indeed, national security." He said U.S. government officials including Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have called for "Congressional action" on crypto regulations. Disparte said passing the Clarity for Payment Stablecoin Act would address the "critical regulatory gap" in the digital asset ecosystem. He said the bill, which has been under development for two years and has advanced from the House Financial Services Committee, would ensure that stablecoin issuers comply with U.S. regulations governing money laundering, terror financing, and sanctions.
According to LinkedIn, Disparte joined Circle, issuer of the USDC stablecoin, in 2021. He is also the founder and CEO of Risk Cooperative, a strategic risk advisory and insurance brokerage firm. Previously, he served as chair of the American Security Project’s Business Council on American Security.
