Pro-Crypto Lawmakers Call for Swift DOJ Investigation into Binance and Tether
Senator Cynthia Lummis and Representative French Hill, have made an urgent plea to the U.S. Department of Justice (DOJ) to expedite the investigation into two major players in the cryptocurrency space, Binance, and Tether. The request for swifter action comes in the wake of allegations that these platforms have been involved in illicit financial activities linked to terrorist financing.
Explosive Accusations of Terrorist Financing
The lawmakers’ call to action follows recent reports published by the Wall Street Journal, which alleged that terrorist organizations, including Hamas, Hezbollah, and Palestinian Islamic Jihad, have managed to raise over $130 million in cryptocurrencies. According to Senator Lummis, these groups have purportedly used Binance and Tether as conduits for their financial operations, thus violating sanction laws and the Bank Secrecy Act.
The allegations assert that the financial activities supporting these organizations have been ongoing for at least two years, with Hezbollah, Hamas, and Palestinian Islamic Jihad reportedly amassing crypto funding since August 2021.
History of Illicit Activities
Senator Lummis also highlighted Binance’s purported history of engaging in illicit activities. Citing a Financial Times report from October 16, the letter claimed that Israeli authorities had ordered the closure of 100 Binance accounts linked to Hamas. Additionally, there was mention of a previous case in May where Israeli authorities seized over 190 Binance accounts associated with Islamic terrorism between 2021 and 2023.
The lawmakers’ letter to the DOJ explicitly stated, “The fact that Binance has permitted Hamas and other terrorist groups to open accounts and conduct business, even after public reporting about the issue, clearly shows that Binance could be providing material support to entities engaged in terrorism under Federal law, or being willfully blind to the fact that it may be doing so.”
Senator Lummis and Representative Hill have called for a speedy resolution to the investigation, aiming to uncover the extent of Tether and Binance’s involvement in these allegations. The urgency of their request underscores the severity of the accusations and their potential implications for the cryptocurrency industry as a whole.
Challenging the Accuracy of Data
Amid these serious allegations, reports have emerged suggesting that the information underpinning the investigation may be inaccurate. Notably, the Wall Street Journal based its initial report on data sourced from Elliptic, a blockchain analysis firm. However, Elliptic has since rejected the interpretation of the data, raising questions about the accuracy of the allegations and their potential impact on public policy decisions.
Cryptocurrency enthusiasts and experts have criticized both journalists and lawmakers for potentially misrepresenting the role of crypto in terrorist financing. The accuracy of the data and the true extent of Binance and Tether’s involvement remain subjects of debate.
It’s worth noting that Binance was already facing regulatory scrutiny and grappling with internal challenges, including staff departures and user withdrawal issues. The U.S. Securities and Exchange Commission (SEC) was reportedly considering the possibility of pursuing criminal charges against the exchange.
Both Tether and Binance have asserted their cooperation with regulatory authorities to combat terrorist financing, claiming to have taken measures such as banning accounts and blocking assets. The outcome of the investigation will be closely watched by the cryptocurrency community and regulatory bodies alike as it could have far-reaching consequences for the industry.