President Trump Says He Is Reviewing Binance Hack as Calls for Crypto Regulation Intensify
On Friday, Cody Carbone, CEO of The Digital Chamber, sent a letter to leaders in the House and Senate urging Congress to pass legislation immediately that would grant the Commodity Futures Trading Commission (CFTC) authority over crypto exchanges.
In the wake of the $6.3 billion hack targeting Binance, the world’s largest cryptocurrency exchange, calls have mounted for legislation and for companies such as Binance to move their operations onshore.
The breach occurred on Thursday. Binance co-CEO Richard Teng said it was caused in part by a compromised laptop belonging to a DevOps engineer. The device gave an attacker access to a service container used to submit unauthorized withdrawal transactions. Blockchain analytics companies, including TRM Labs, have linked the attack to TraderTraitor, a North Korean hacking unit.
At a press conference on Friday afternoon, President Donald Trump said he was looking into the incident. He added that Binance had said it was making sure customers would get their money back.
“But it’s a hack,” he said. “That’s the problem. You know the old-fashioned way when you used to sign a check… these are different people, never see the money anymore. So I’ve always felt it was a little bit dangerous.”
Earlier on CNBC, CFTC Chair Michael Selig identified Binance’s lack of federal oversight by his agency as a concern. On October 5, the agency proposed a federal framework for crypto, focusing specifically on leveraged and margined retail cryptocurrency trading, as well as a new registration category for exchanges that offer those products.
“This proves our exact point in proposing regulations for crypto markets earlier this month,” Selig said. “The real issue here is that these are unregulated offshore exchanges, and they don’t have the same safeguards that we have in our financial markets here in the United States.”
Binance concerns over the years
Over the past several years, both Republicans and Democrats have raised concerns about Binance, particularly regarding money laundering and consumer protections. In 2023, the exchange’s former CEO, Changpeng Zhao, pleaded guilty to failing to establish adequate anti-money-laundering controls at Binance as part of a wide-ranging $4 billion settlement. Trump later pardoned him.
The debate also turned to whether the Clarity Act—a broad crypto bill intended to regulate exchanges and other parts of the industry—could have helped freeze the transactions lost in the Binance hack. The House passed the bill last year, but it has since stalled in the Senate amid concerns about Trump’s substantial crypto wealth. That wealth had grown to hundreds of millions of dollars through connections to World Liberty Financial and his TRUMP memecoin, becoming an issue many Democrats could not overlook as they considered the legislation.
“Yesterday, hackers stole more than $6 billion from Binance in less than 4 hours, the biggest heist in history,” said Sen. Cynthia Lummis, R-Wyo., one of the bill’s negotiators, in a post on X. “The Clarity Act would have given crypto firms legal cover to freeze suspicious transactions the instant law enforcement calls. Every minute lost is money gone for good.”
Amanda Fischer, policy director and chief operating officer at Better Markets and a former chief of staff at the Securities and Exchange Commission, disputed that view. In a post on X, she said the bill would have required stablecoin issuers to “freeze per a court order,” while crypto firms were working as quickly as possible to freeze the assets.
However, Patrick Wilson, general counsel at the Solana Policy Institute, said that characterization was incorrect. He said a provision in the Clarity Act “expressly protected stablecoin issuers from private lawsuits for voluntary, temporary holds based on a reasonable belief of a violation of law. No court order required.”
Call to action
On Friday, Cody Carbone, CEO of The Digital Chamber, sent a letter to House and Senate leaders calling for Congress to pass legislation without delay. The bill, he said, should give the CFTC authority over crypto exchanges and require customer funds to be kept separate from company funds in bankruptcy proceedings.
“No federal regulator can set and enforce consistent standards for how these platforms hold, segregate, and secure customer assets, or for their cybersecurity, before consumers are harmed,” Carbone said. “Regulators can only act after the damage is done.”
“We urge you to act before this Congress adjourns,” he added.
Meanwhile, Rep. Tom Timmons, R-S.C., raised national security concerns.
“America cannot allow rogue regimes to exploit digital assets to finance their nuclear weapons and ballistic missile programs,” Timmons said in a post on X.