[NEWS] US Senators Call for Investigation of Binance and Tether to Hold Them Accountable for Hamas Fundraising

On the 26th, Senator Cynthia Lummis, a member of the Senate Banking Committee, and Representative French Hill, chairman of the House Financial Services Committee's Digital Assets Subcommittee, submitted a letter to the U.S. Attorney General, the Department of Justice, and General Garland of the U.S. Army, requesting that they investigate cryptocurrency exchanges Binance and Tether.

The background to this is the conflict between Israel and the Gaza Strip-based extremist group Hamas. The lawmakers are urging that Binance and Tether be investigated for helping Hamas raise funds.

According to the senators' letter, since the conflict broke out on October 7, Israeli law enforcement authorities have ordered the closure of Hamas' cryptocurrency wallets, most of which were Binance accounts. In addition, Israeli law enforcement agencies froze more than 190 accounts related to Islamic terrorism between 2021 and 2023, all of which were Binance accounts.

The lawmakers argue that the fact that Hamas and other terrorist organizations use Binance accounts likely means the exchange is materially supporting terrorist organizations, which is tantamount to criminal penalties.

They also have similar concerns about Tether, which issues the stablecoin USDT. According to the Financial Times, 32 Tether accounts were frozen that were controlled by Hamas and Russian-affiliated groups in Israel and Ukraine.

In light of these circumstances, they argue that Binance and Tether knowingly violated applicable U.S. sanctions and banking laws by failing to conduct customer due diligence and screening despite knowing that their accounts were being used by terrorist organizations, and that the companies should be fined for these actions.

In response to the lawmakers' claims, blockchain analysis company Elliptic pointed out that it had tracked some of the funds and found that only $21,000 (approximately 3.15 million yen) had been donated since October 7, and that many accounts had been frozen thanks to the efforts of cryptocurrency companies and researchers, making it impossible for terrorist organizations in the Gaza Strip to use.

In addition, blockchain analysis company Chainalysis pointed out that while a small portion of the $82 million (approximately 12.3 billion yen) worth of cryptocurrency has been used for terrorist activities, the majority is unrelated. It claims that cryptocurrency is being used to raise funds for humanitarian purposes, such as Crypto Aid Israel raising $185,000 (approximately 2.8 billion yen) in cryptocurrency and the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) raising donations in cryptocurrency.

The lawmakers said that their request is not against cryptocurrencies themselves, and that while cryptocurrencies and distributed ledger technology have the potential to bring innovation to the U.S. financial market, a small number of malicious cryptocurrency operators are exploiting them.

They also cited Chainalysis' opinion, but emphasized that "if Binance and other companies are found to have facilitated illegal activities, it is essential that the Department of Justice pursue them for responsibility."

Reference:Letter
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