Crypto advocate Cynthia Lummis, who represents Wyoming in the US Senate, has called on the Department of Justice (DOJ) to consider bringing charges against cryptocurrency exchange Binance in light of the terrorist group Hamas’ recent attack on Israel. Lummis joined forces with Arkansas Representative French Hill to urge the DOJ to “reach a charging decision on Binance” and conclude its investigations of illicit activities involving Tether, a stablecoin. This move follows the coordinated attack by Hamas on October 7, which the lawmakers allege received support from illegal crypto transactions, resulting in significant terrorism financing.
In a letter addressed to US Attorney General Merrick Garland on October 26, Lummis and Hill emphasized the importance of evaluating the extent to which Binance and Tether might be providing material support to terrorist organizations through violations of sanctions laws and the Bank Secrecy Act. The lawmakers further expressed their support for swift action by the DOJ against both Binance and Tether to cut off funding sources for the terrorists targeting Israel. Lummis, a Bitcoin supporter and advocate for crypto legislation, and Hill, the chair of the Subcommittee on Digital Assets, Financial Technology, and Inclusion, echoed Senator Elizabeth Warren and other lawmakers’ concerns about the link between crypto payments and terrorist activities. However, rather than condemning crypto asset intermediaries across the board, Lummis and Hill directed the DOJ to focus on “bad actors,” including Binance and Tether.
The letter emphasized the need to avoid painting all crypto asset intermediaries as suspect, as many of them strive to comply with US sanctions and money laundering laws. These intermediaries recognize the importance of regulations in unlocking the potential of crypto assets and distributed ledger technology. In response to the October 7 attacks, Binance froze accounts linked to Hamas at the request of Israeli law enforcement. However, Lummis and Hill deemed this action insufficient as the exchange had allowed terrorist groups to conduct business or had turned a blind eye to their activities. Similar allegations were made against Tether for knowingly facilitating violations of sanctions laws.
While some reports claim that Binance is now cooperating with Israeli law enforcement, Lummis and Hill argue that this is irrelevant to potential criminal culpability. They stress that Binance only took action after knowingly allowing its exchange to be used by terrorist organizations and being caught in the act. In a statement released on October 25, blockchain analytics firm Elliptic refuted claims that Hamas had received significant crypto payments to fund its attacks. According to Elliptic, one Hamas-linked campaign had only raised $21,000 since the October 7 attack, contrary to the millions of dollars reported by other media outlets.
In conclusion, Lummis and Hill’s letter to the DOJ reflects growing concerns among lawmakers regarding the potential misuse of cryptocurrencies for illicit activities, specifically by terrorist organizations. Their call for action against Binance and Tether seeks to disrupt the flow of funding to these organizations and emphasizes the need for crypto asset intermediaries to comply with sanctions laws and prevent money laundering. Efforts to combat terrorist financing through cryptocurrency transactions are likely to garner increased attention from regulators and highlight the importance of responsible use and regulation in the crypto industry.