Tether and Binance in the Spotlight: A Deep Dive into Crypto’s Regulatory Challenges
Qadir AK9 Dec 20232 min read
In a recent interview with Tony of Thinking Crypto, Ron Hammond from the Blockchain Association shed light on the evolving dynamics between Binance, Tether, and regulatory authorities in Washington, DC. The conversation primarily focused on the recent settlement between Binance and the Department of Justice (DOJ), and the ongoing concerns surrounding Tether.
Binance’s Settlement with DOJ: A Turning Point?
Hammond highlighted that historically, Binance had faced reputation issues in DC, leading to heightened scrutiny. This was exemplified by a letter from politicians French Hill and Senator Cynthia Lummis to the DOJ, specifically addressing concerns about Binance and Tether. However, a significant development has occurred since, with Binance settling with the DOJ, a move marked by the stepping down of Binance CEO, Changpeng Zhao (CZ).
The discussion then pivoted to whether this settlement addresses all underlying issues. Hammond spoke about the complexity of the situation, emphasizing the DOJ’s concerns about money laundering and sanctions violations. He noted that these challenges are not unique to Binance but are also pertinent to Tether.
Tether’s Ongoing Challenges and Reputation
Tether, according to Hammond, has been viewed negatively in DC, primarily due to issues related to audits and reserves. Despite recent efforts by Tether to address these concerns, doubts persist, especially regarding the use of platforms like Tron and Binance for financing malicious activities.
Hammond quoted, “Tether was always, at least in DC, viewed pretty negatively as well, and I’d say that those are the last kind of two big holdups right now. For Tether, at least, the largest concerns usually start with the issues of audits and reserves. For a while, there was unclear about what’s making the reserves at Tether.”
The interview also highlighted concerns from industry-friendly Republicans about the negative connotations associated with Tether. Despite efforts to rectify past mistakes, Tether remains under scrutiny, especially in the wake of the Binance settlement. Additionally, the conversation touched upon the critical importance of stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) practices, areas where Binance had previously faced charges from the DOJ for lax enforcement.
