US Lawmakers Want Criminal Charges For Binance, Investigate Tether On Alleged Terrorism Funding

Republican lawmakers have called on the U.S. Department of Justice to thoroughly investigate whether Binance and Tether are potentially providing support to terrorism funding in the wake of recent attacks in Israel.

In a joint letter dated Thursday, Senator Cynthia Lummis, representing Wyoming, and Representative French Hill from Arkansas, urged the Justice Department to conduct a comprehensive assessment of the extent to which Binance and Tether might be violating sanctions laws and the Bank Secrecy Act by aiding terrorism. Their letter emphasized the need for swift action against both companies to disrupt the flow of funds to terrorists targeting Israel.

“To that end, we strongly support swift action by the Department of Justice against Binance and Tether to choke off sources of funding to the terrorists currently targeting Israel,” the lawmakers said.

The lawmakers specifically called upon Attorney General Merrick Garland to make a charging decision regarding Binance that reflects the company’s level of culpability. They also urged the expedited conclusion of investigations into ongoing illicit activities related to Tether.

While not a direct response, Tether seems to be unfazed by the recent development, with incoming CEO Paolo Ardoino saying the company is “proud of the work we do to stop illicit activity.” Instead, Ardoino blames The Wall Street Journal’s story as a “deceitful article [tricking] good actors with false information.”

It is worth noting that more than a year ago, Tether chose not to blacklist accounts associated with Tornado Cash, which was then just freshly sanctioned by the Treasury Department over alleged laundering billions of dollars’ worth of digital assets stolen in virtual heists tied to rogue foreign regimes and criminals.

“Tether has not been contacted by U.S. officials or law enforcement with a request,” Ardoino said at the time.

Over the past year, both Tether and Binance have faced increased scrutiny from regulators. The Commodity Futures Trading Commission (CFTC) took legal action against Binance and its CEO, Changpeng “CZ” Zhao, for alleged violations of federal laws. The CFTC’s complaint highlighted the exchange’s lax approach to compliance.

Tether, too, faced penalties from the CFTC in 2021 for issues related to its stablecoin USDT. Notably, Tether recently froze 32 addresses controlled by Hamas and Russian-linked entities in Israel and Ukraine, as reported by the Financial Times.

Lummis and Hill stressed that Tether’s actions appear to knowingly facilitate violations of sanctions and the Bank Secrecy Act by not conducting adequate customer due diligence and screenings, despite being aware of the potential misuse of their product in terrorism and other illicit activities.

Both lawmakers, who have expressed support for cryptocurrency and distributed ledger technology, underscored in their letter that many crypto intermediaries are actively working to comply with U.S. sanctions and anti-money laundering laws. They view these regulations as necessary to harness the full potential of crypto assets and distributed ledger technology for responsible innovation.

Information for this story was found via The Block and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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