Crypto Advocate Calls for Charges Against Binance Following Hamas Attack
Cynthia Lummis, a crypto advocate and U.S. Senator from Wyoming, has urged the Department of Justice (DOJ) to consider charging crypto exchange Binance in connection with the recent terrorist attack by Hamas on Israel. In a letter to Attorney General Merrick Garland, Lummis and Arkansas Representative French Hill called for the DOJ to reach a decision on Binance’s involvement in illicit activities and expedite investigations into Tether.
Lummis and Hill argued that Binance and Tether may be providing material support to terrorists through violations of sanctions laws and the Bank Secrecy Act. They emphasized the need for swift action to cut off funding sources for terrorists targeting Israel.
The Focus on “Bad Actors” in Crypto
Lummis and Hill’s letter echoed concerns raised by Senator Elizabeth Warren and other lawmakers about crypto payments being linked to terrorist activities. However, unlike Warren, the Republican lawmakers emphasized the importance of distinguishing between “bad actors” and legitimate crypto intermediaries.
They acknowledged that many crypto intermediaries comply with regulations to combat money laundering and adhere to U.S. sanctions laws. Their aim was not to label all crypto asset intermediaries as suspect but rather to target specific entities like Binance and Tether.
Allegations Against Binance and Tether
In response to the October 7 attacks, Binance froze accounts associated with Hamas at the request of Israeli law enforcement. However, Lummis and Hill criticized this action as insufficient, claiming that the exchange had allowed terrorist groups to use its platform or turned a blind eye to their activities.
Similar allegations were made against Tether for knowingly facilitating violations of sanctions laws. The lawmakers argued that Binance’s cooperation with Israeli law enforcement after being caught was irrelevant to its criminal culpability.
Evidence Contradicts Claims of Crypto Funding for Hamas
Blockchain analytics firm Elliptic released a statement countering media reports that Hamas had received significant crypto payments for funding the attacks on Israel. According to Elliptic, one Hamas-linked campaign had only raised $21,000 since the October 7 attack, contradicting claims of millions of dollars in crypto funding.
Hot Take: Balancing Crypto Regulation and Targeting “Bad Actors”
The letter from Cynthia Lummis and French Hill highlights the importance of distinguishing between legitimate crypto intermediaries and those involved in illicit activities. While concerns about crypto’s potential use in financing terrorism are valid, it is crucial not to paint all crypto asset intermediaries as suspect. Striking a balance between effective regulation and targeting “bad actors” is necessary to ensure the growth and potential of cryptocurrencies while preventing illicit activities.
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