Earlier this year, the Treasury Department reportedly began probing whether paid speeches by the MEK-supporters amounted to doing business with a terror group -- a serious crime under U.S. law. The MEK's delisting, however, nullifies such an inquiry, according to The Associated Press.
The MEK has also come under fire from critics for appearing to be a cult-like organization. A 2009 study by the RAND Corporation said its leaders "imbued the MEK with many of the typical characteristics of a cult, such as authoritarian control, confiscation of assets, sexual control (including mandatory divorce and celibacy), emotional isolation, forced labor, sleep deprivation, physical abuse, and limited exit options." Similar allegations are made in a 2005 Human Rights Watch report.
MEK members and supporters reportedly object to such accusations, saying it's all Iranian propaganda.