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In a joint effort, Senator Cynthia Lummis (R-Wyoming) and Representative French Hill (R-Arkansas) have called on the Department of Justice (DOJ) to swiftly conclude its investigations and decide whether to prosecute cryptocurrency platforms Binance and Tether in connection to their alleged support of terrorist organizations, including Hamas.

The objective of the Letter

The lawmakers acknowledge the potential for ethical innovation in U.S. financial markets through distributed ledger technology and cryptocurrency assets. They emphasize the need to avoid labeling all cryptocurrency intermediaries as unscrupulous due to the actions of a few individuals involved in illicit activities. Many cryptocurrency entities, they note, are committed to complying with money laundering and sanctions laws.

The Wall Street Journal reported on October 10, 2023, that terrorist organizations like Hamas, Palestinian Islamic Jihad, and Hezbollah had received funding through cryptocurrency assets since August 2021. While the exact funding amount remains uncertain, Lummis and Hill believe the DOJ must prosecute those facilitating illegal activities.

Issue with Binance

Binance, an unlicensed cryptocurrency exchange with headquarters in the Cayman Islands and Seychelles is allegedly under investigation by the DOJ. Recent reports suggest that over 100 Binance accounts linked to Hamas have been ordered to be closed since hostilities began on October 7, 2023. Additionally, Israeli authorities reported seizing more than 190 Binance accounts connected to terrorism between 2021 and 2023.

Concerningly, Binance is accused of allowing terrorist organizations to open accounts and conduct business, potentially violating federal law. The exchange is also accused of neglecting customer due diligence and screening, enabling the funding of terrorist activities.

The Tether Issue

Tether, a stablecoin issuer with offices in Hong Kong and the British Virgin Islands, is also under scrutiny. The Financial Times revealed on October 16, 2023, that Tether had frozen 32 addresses in Israel and Ukraine linked to Hamas and organizations with Russian connections at the request of Israeli law enforcement.

Despite awareness of its product’s potential use for unlawful operations, Tether is accused of failing to conduct sufficient customer due diligence and screening. Its leaders are reportedly under investigation for bank fraud related to the misuse of U.S. financial services. The company has previously faced penalties from the Commodities Futures Trading Commission for misleading representations about its reserves.

Plea to the DOJ

Senator Cynthia Lummis and Representative French Hill urge the Department of Justice to conduct a comprehensive investigation into the extent of Binance and Tether’s involvement in facilitating terrorism by violating sanctions statutes and the Bank Secrecy Act. They pledge their full support for prompt legal action against these platforms to cut off funding sources for terrorist activities targeting Israel.

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Filed under: Bitcoin - @ October 27, 2023 5:56 am