Binance Faces Fresh Senate Scrutiny Over Possible Terror Funding

Nine U.S. senators—many key drafters of the Digital Asset Market Clarity Act—have addressed Treasury Secretary Scott Bessent and Attorney General Pam Bondi with a formal letter demanding an investigation into Binance’s compliance with sanctions and its measures to curb illicit money flows. The request follows a separate inquiry by Senator Richard Blumenthal, who also sought information from the exchange.

Key Points of the Letter

• Sanctions Compliance
  Lawmakers express concern that weak controls could enable large sums to be routed to sanctions violators or terrorist groups. They reference Binance’s 2023 settlement and ask for detailed explanations of how the exchange is meeting its obligations.

• Illicit Finance Safeguards
  The senators urge a thorough review of Binance’s safeguards against money laundering and terrorist financing, citing reports that the platform might have facilitated extremist funding.

• Political Context
  The letter highlights Binance’s ties to the Trump‑backed firm World Liberty Financial and mentions former President Donald Trump’s pardon of Binance founder Changpeng “CZ” Zhao—who previously served a brief prison sentence for anti‑money laundering violations.

Binance’s Response

• Co‑CEO Richard Teng has dismissed earlier media claims as “inaccurate” and “defamatory,” but the company has yet to respond directly to the senators’ letter.

Legislative Implications

• Digital Asset Market Clarity Act
  The ongoing bill, led in part by Senator Mark Warner, aims to regulate digital assets and prevent illicit finance. The senators’ letter underscores the importance of robust compliance frameworks within that legislation.

• Congressional Pressure
  Although not part of the majority, these senators are applying significant pressure on Binance to tighten its compliance structure and address national security concerns associated with cryptocurrency transactions.