U.S. Senate Democrats asked Treasury, DOJ to probe Binance's illicit finance controls
TL;DR
Nine U.S. Senate Democrats requested Treasury and Justice Department investigations into Binance's illicit finance controls, citing national security concerns and referencing the exchange's past compliance issues and political connections.
Key Takeaways
- •Nine Senate Democrats sent a letter to Treasury and DOJ officials seeking an investigation into Binance's illicit finance controls and sanctions compliance.
- •The lawmakers expressed concerns that poor controls at Binance could allow funds to flow to terrorist groups or sanctions evaders, threatening national security.
- •The request comes during delicate negotiations over crypto market legislation, with illicit finance prevention being a key unresolved issue in the Digital Asset Market Clarity Act.
- •The letter referenced Binance's ties to Trump-backed crypto ventures and the pardon of founder Changpeng Zhao, connecting political elements to the compliance concerns.
- •Binance leadership has previously called some media reports 'inaccurate' and 'defamatory,' but the company didn't immediately comment on the senators' latest request.
What to know:
- Nine U.S. Senate Democrats sent a letter to Secretary of the Treasury Scott Bessent and Attorney General Pam Bondi seeking an investigation of illicit finance at Binance, following recent news reports on the topic.
- Many of the lawmakers have been directly involved in negotiations over the Senate's Digital Asset Market Clarity Act that been stuck over several topics, including the crypto industry's illicit-finance risks.
- Nine U.S. Senate Democrats sent a letter to Secretary of the Treasury Scott Bessent and Attorney General Pam Bondi seeking an investigation of illicit finance at Binance, following recent news reports on the topic.
- Many of the lawmakers have been directly involved in negotiations over the Senate's Digital Asset Market Clarity Act that been stuck over several topics, including the crypto industry's illicit-finance risks.
Democrats in the U.S. Senate continue to pile onto Binance, asking the Treasury and Justice departments to investigate its sanctions compliance and protections against illicit finance following reports of potential terrorism funding.
Nine senators, including a few that have been instrumental in negotiations over the crypto industry legislation known as the Digital Asset Market Clarity Act, sent a letter Friday to the chiefs of the federal agencies, requesting they probe the exchange after news reports on possible breaches, which also claimed the company had fired some of the compliance personnel involved in discovering the transactions.
The latest move from Democrats follows an announcement earlier this week from Senator Richard Blumenthal, a Connecticut Democrat who is a senior member of the Senate Homeland Security Committee, that he was inquiring into Binance and had written a letter to the company asking for information. However, neither he nor the other Senate Democrats are in the majority, meaning they don't currently have control over committee investigations.
Richard Teng, Binance co-CEO, has said some of the earlier media reports were "inaccurate" and "defamatory." A spokesperson for the company didn't immediately respond to a request for comment Friday on the senators' request, which had been sent to Secretary of the Treasury Scott Bessent and Attorney General Pam Bondi.
"These allegations raise grave concerns that poor illicit finance controls at Binance remain a significant threat to national security," according to the Friday letter from senators including Elizabeth Warren, Ruben Gallego, Angela Alsobrooks, Mark Warner and five others, who also asked for information about the company's compliance with requirements from its 2023 settlement.
"Our illicit finance controls are dangerously compromised if enormous sums can flow through Binance to terrorist groups or sanctions evaders," they wrote in the letter, which comes at a delicate point in the ongoing discussions over U.S. legislation that would govern the crypto markets.
The prevention of illicit finance in crypto is among the issues that are still being discussed in that bill. Senator Warner has taken a lead among Democrats seeking to hash out legislative language on the topic.
Another unresolved issue centers around U.S. President Donald Trump and his family's crypto activities, which the letter also referenced. The lawmakers wrote that they "recognized" Binance had ties to World Liberty Financial, the Trump-backed crypto venture behind the USD1 stablecoin. They also referenced Trump's pardon of Binance founder Changpeng "CZ" Zhao — he had pleaded guilty and served four months in prison tied to Binance's past issues with anti-money laundering and know-your-customer provisions.
- The U.K. Gambling Commission is exploring a potential path for licensed betting operators to accept crypto payments, citing rising consumer demand and the draw of unlicensed sites.
- The move aligns with forthcoming U.K. crypto rules that would bring digital assets under the Financial Conduct Authority’s oversight, with a new regime expected to start in October 2027.
- Regulators have tasked an Industry Forum with examining how crypto payments could fit within strict anti-money laundering, consumer protection and suitability standards, stressing that offshore crypto casinos would still be barred from operating in the U.K.
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