On the morning of October 27th, Republican lawmakers, led by Senator Cynthia Lummis and Congressman French Hill, sent a letter of request to the U.S. Department of Justice. In this letter, they urged the department to investigate Binance and Tether due to suspicions of financial law violations and potential breaches of the Bank Secrecy Act.
Additionally, these lawmakers accused Binance and Tether of facilitating terrorist financing activities related to the ongoing Israel-Hamas conflict. This accusation was based on previous reports suggesting that Hamas had received cryptocurrency donations in 2021. Notably, Binance had previously assisted the Israeli government by suspending 100 crypto accounts linked to a military group associated with Hamas, and Tether claimed to have frozen over $873,000 connected to these activities.
However, Senators Lummis and Hill argued that these actions by the exchanges were merely reactive and only took place after the suspicious activities were identified. They also raised concerns about Tether’s past violations of U.S. sanctions regulations, citing lax customer identity verification despite knowing that some customers were using their services for nefarious purposes.
In response to these allegations, Tether quickly denied them, stating that they regularly cooperate with global authorities to freeze USDT addresses associated with criminal activities and are committed to compliance with sanctions regulations. Tether also pointed out that recent U.S. media reports about cryptocurrency being used to fund Hamas were inaccurate and exaggerated the amounts involved by several times.
Despite Tether’s arguments, the call for the prosecution of Tether and Binance is gaining attention because it comes from two prominent officials who support cryptocurrency regulations. Furthermore, this is not the first group of lawmakers to advocate for measures against cryptocurrency being used for terrorist financing. Just last week, a bipartisan group of 105 U.S. lawmakers, led by Senators Elizabeth Warren and Roger Marshall, along with Representative Sean Casten, sent a letter to the Department of the Treasury, requesting a clear plan to prevent crypto from being used in transactions involving terrorist organizations.