Binance and Tether

U.S. lawmakers are pushing the Department of Justice to investigate Binance and Tether for allegedly facilitating substantial illicit financing to terrorist groups.

In a letter written to Attorney General Merrick Garland, the U.S. lawmakers called on to promptly finalise the charges on the firms.

"We urge you and the Department of Justice to reach a charging decision on Binance that reflects their level of culpability and expeditiously conclude your investigations into the ongoing illicit activities involving Tether."

The letter that was submitted highlighted Binance's past connections to illegal financing and its alleged failure to freeze accounts associated with Hamas, potentially leading to the provision of material support to terrorists under federal law.

Additionally, the lawmakers suggested that Binance might be deliberately neglecting anti-money laundering obligations.

Following media reports that revealed numerous Binance accounts linked to Hamas, Israel reportedly ordered the closure of over 100 additional accounts.

The lawmakers contended that Binance's provision of accounts to terrorist organisations, despite public awareness of the issue, could potentially be considered as providing material support to terrorists under U.S. law.

In an X (formerly known as Twitter) post, Senator Cynthis Lummis posted:

Tether Response

Following the U.S. lawmakers move, Tether responded with a blog post on 26 October.

Tether refuted the claims made by the U.S. lawmakers:

"Tether, as a pioneer and leading entity in the stablecoin industry, is uncompromising in its adherence to regulatory compliance and due diligence. Our stringent verification processes, continuous monitoring mechanisms, and collaborative approach with global law enforcement agencies affirm our unyielding commitment to deter and counteract illicit activities. There is simply no evidence that Tether has violated Sanctions laws or the Bank Secrecy Act through inadequate customer due diligence or screening practices."

Investigation on Binance

The investigation into Binance by the Department of Justice commenced in 2018.

The investigation primarily focused on Binance's adherence to U.S. Anti-Money Laundering (AML) regulations and sanctions.

U.S. prosecutors were examining allegations related to unlicensed money transmission, conspiracy to commit money laundering, and violations of criminal sanctions.

Following the Israel-Hamas conflict, the U.S. lawmakers claim Binance, an unregulated exchange based overseas, allowed accounts linked to Hamas to operate even after previous seizures by Israeli authorities.

They alleged that Binance provided "material support" to terrorist organisation due to inadequate anti-money laundering measures.