U.S. Government to Research Role of Virtual Currencies in Terrorism

Following the ransomware epidemic this past weekend, Kathleen Rice, a Representative from New York’s 4th congressional district submitted a bill asking the Secretary of Homeland Security to “analyze and disseminate a threat assessment regarding terrorist use of virtual currency.”

Also Read: Homeland Security’s U.S. Citizenship and Immigration Considers Bitcoin   

House Representative Proposes that Government Agencies Assess and Disseminate Terrorist Use of Virtual Currencies

Kathleen Rice, New York’s 4th congressional district representative.

The proposed bill submitted by the U.S. House of Representatives Democrat is called the “Homeland Security Assessment of Terrorists Use of Virtual Currencies Act.” The newly introduced bill says the term “virtual currency” covers a “digital medium of exchange, unit of account or a store of value.” The threat assessment should begin 120 days after the date of the enactment of the proposed Act, the bill explains.

“Secretary of Homeland Security for Intelligence and Analysis, shall, in coordination with appropriate Federal partners, develop and disseminate a threat assessment regarding the actual and potential threat posed by individuals using virtual currency to carry out activities in furtherance of an act of terrorism, including the provision of material support or resources to a foreign terrorist organization.”

Senator Lindsey Graham Believes Ransomware Is an Act of Terrorism

South Carolina Republican Senator Lindsey Graham.

Other U.S. congressional representatives believe something should be done to combat ransomware. Roughly one year ago during a congressional hearing on May 18, the South Carolina Republican Senator, Lindsey Graham, said ransomware was an act of terrorism. Graham explained during his speech that with ransomware “it is only a matter of time until somebody gets physically hurt.”        

“We have a state-sponsor of terrorism list that the State Department collects. If you are on that list, bad things come your way because you are a bad actor,” the South Carolina Senator explained.

If we don’t wake up some of the nation-states where these problems reside in large measure, you are never going to fix this problem.

Researchers Detail Digital Currencies Are Not a Method Used by Terrorists

The statements from bureaucratic officials who believe virtual currencies are being used by terrorists follow a slew of published scholarly reports concluding that terrorism financed with bitcoin is a bit exaggerated.

In 2015, the UK government released a report that detailed bitcoin is not used for terrorism or is a criminal risk. “Digital currencies are currently not a method by which terrorists seem to raise or move money out of the UK,” the 100-page HM Treasury report details.  

Moreover, this past March a consultant at the Royal United Services Institute (RUSI) David Carlisle said “treating cryptocurrencies as an exceptional threat creates the misleading impression that more conventional financial products are not already equally, or more, vulnerable to terrorist exploitation.”

On May 16 after the new proposal was introduced by representative Rice, the bitcoin and blockchain legislative advocacy group, Coin Center fired back, publishing an article dismissing the relationship between terrorist financing and digital currencies. Coin Center’s Jerry Brito cites a recently published assessment from the Center for a New American Security report which states;

There is no more than anecdotal evidence that terrorist groups have used virtual currencies to support themselves.

The U.S. House of Representatives Subcommittee on Counterterrorism and Intelligence will assess the new proposal submitted by representative Rice in the next few days.

What do you think about the government researching terrorist-related virtual currency usage? Let us know in the comments below.

Images courtesy of Shutterstock, Wikipedia, and U.S. Congress public profiles.

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