As the Hamas-Israeli war deepened, the US policymakers have taken strategic action to suppress the operation of the Palestine illicit groups. In a recent report, the lawmakers urged the Department of Justice (DOJ) to closely examine whether Binance and Tether channeled crypto funds to Hamas.
A letter titled “Illicit Finance Activities of Binance and Tether” was co-authored by Senator Cynthia Lummis and representative French Hill, requesting the DOJ to investigate the involvement of crypto exchanges in illicit funding.
Involvement of Binance and Tether in Terrorist Financing
The lawmakers admitted that crypto and blockchain technologies are the vehicles of innovation in the financial sector. Reflecting on the aftermath of the Hamas operation, the lawmakers warned the public from portraying the virtual assets service providers (VASPs) as bad actors facilitating terrorist financing.
The two admitted that most US VASPs have been seeking to comply with the existing money laundering laws and Western sanctions. In the letter, Lummis and Hill, stated that based on the DOJ findings on the imminent investigation, the regulators will assess Binance’s culpability expeditiously in illicit financing. The duos noted that after the investigation, the DOJ will reach a charging decision on the Binance case.
Citing a report in the Wall Street Journal (WSJ), the lawmakers speculated that Binance and Tether were the primary conduits for transferring funds to Hamas. The WSJ report captured an analysis from Elliptic on the amount Hamas raised in crypto from 2021.
Even though the figures shared by WSJ on Hamas crypto funding were inaccurate, the lawmakers underlined the need for the DOJ to take down bad actors and hold them accountable for terrorist financing.
US Lawmakers Seeks to Address Crypto Terrorist Financing
Based on the ongoing regulatory backlash and past involvement in illicit activities of Binance, the lawmakers urged the DOJ to proceed with the investigations. In May, the Israeli law enforcers suspended 190 Binance accounts tied to the Hamas group.
Following the unprecedented invasion of Israel by Hamas, the law enforcers worked closely with Binance to suspend all accounts linked to the Palestine illicit group. The exercise also confiscated funds from the blocked accounts and transferred them to the Israeli national treasury.
Besides the seizure of Binance accounts, the lawmakers suspected that the controversial crypto exchange was supporting terrorist financing.
Even after the revelation of the Hamas crypto funding sources, the Binance team still allowed the bad players to create accounts on the exchange. This demonstrates that Binance supported the violation of the US sanction and the Bank Secrecy Act (BSA).
The lawmakers blamed Binance for failing to conduct a sufficient due diligence process for its customers. They underscored the need for Binance to conduct a thorough screening to address finance terrorism.
US Collaborates with Israel to Bring Down Hamas Activities
Also, Lummis and Hill suspected that the world’s largest stablecoin issuer, Tether, engaged in terrorist financing.
In the past, Tether has been used by illicit groups to breach the US sanctions. Similar to the Binance case, the lawmakers noted that Tether failed to conduct sufficient due diligence and screening when offering USDT.
Tether’s illicit activities obliged the Commodity Futures Trading Commission (CFTC) to file charges against the company. The CFTC alleged that Tether presented falsified documents on its reserves.
In a subsequent lawsuit, Tether’s executives were caught on the wrong side of the law after they engaged in fraudulent schemes relating to US banking services. Recently, Tether supported the Israeli law enforcers to suspend 32 accounts tied to Hamas.
According to the October 26 letter, Lummis and Hill requested the DOJ to carefully examine the involvement of Binance and Tether in terrorist financing. The two policymakers urged the DOJ to assess whether Tether and Binance provided Hamas with material support.
The report revealed that if the DOJ finds that the two crypto firms were supporting terrorist financing, the regulators should take potential action against Binance and Tether.
The Wyoming senator’s latest move aims at ensuring safe, secure, and transparent crypto activities. In her previous role, Lummis has always supported the development of the crypto industry.
The pro-crypto senator has been at the forefront of the ongoing push for crypto adoption. Also, Lummis has been pushing for the adoption of clear regulations on crypto assets in the US.
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