US lawmakers are putting pressure on the Justice Department to investigate Binance and Tether for allegedly facilitating substantial illegal financing to terrorist groups, including Hamas.
In a letter to Attorney General Merrick Garland, Senator Cynthia M. Lummis (R-WY) and Representative French Hill (R-AR) called for “decisive action” if the companies are found complicit.
Senator Lummis wrote on Twitter:
When it comes to illicit finance, crypto isn’t the enemy – bad actors are… I sent a letter asking DOJ to complete its investigation and consider criminal charges against Binance and Tether after reports that they were acting as a middleman served for Hamas and engaged in illegal activities.
According to the letter, Binance’s history of ties to illegal financing and inability to freeze accounts linked to Hamas could constitute material support to terrorists under federal law. The lawmakers stated that Binance could also be deliberately ignoring anti-money laundering requirements.
The letter emphasized that “bad actors” must face consequences if they enable illegal activities. It comes amid growing global scrutiny into the role of cryptocurrencies in potential sanctions evasion and terrorist financing. The Justice Department’s investigation and resulting actions could shape future policy and enforcement surrounding illegal crypto finance.
However, lawmakers emphasized the importance of distinguishing companies pursuing compliance from those exploiting the technology unlawfully. While crypto’s pseudonymity risks abuse, most companies strive to comply with regulations, the letter said. Lawmakers expressed concern about the impact on legal innovation if the actions of a few unscrupulous actors cast suspicion on the entire industry.
According to the letter, Binance is an unregulated foreign exchange that has facilitated illegal transactions in the past. After media reports showed numerous Binance accounts linked to Hamas, Israel has reportedly ordered the closure of another 100 accounts. The lawmakers argued that Binance, which provides accounts to terrorist organizations despite public knowledge of the matter, could constitute material support to terrorists under US law.
Tether responded to the news with a statement denying the grounds for the lawmakers’ claims, writing:
“As a pioneer and leading entity in the stablecoin industry, Tether is uncompromising in its regulatory compliance and due diligence. Our rigorous verification processes, ongoing monitoring mechanisms and collaboration with global law enforcement agencies confirm our unyielding commitment to deter and counter illegal activities. There is simply no evidence that Tether violated sanctions laws or the Bank Secrecy Act through inadequate customer due diligence or screening practices.”