In the last week we have seen both the FBI Director Wray and Australian Minister for Home Affairs raise concerns about the use of cryptocurrency in crime and to finance terrorism.
Permissionless blockchain based cryptocurrencies are of course a terrible way to launder money or finance crime, and these comments reveal more about the education needed at government level than identifying any actual criminal uses of cryptocurrency for which governments should be immediately concerned.
First up, in America on 5 November, during a US Senate Committee On Homeland Security And Governmental Affairs, Senator Mitt Romney said to those present:
I’m not in the Banking Committee. I don’t begin to understand how cryptocurrency works. I would think it is more difficult to carry out your work when we can’t follow the money because the money is hidden from us and wonder whether there should not be some kind of effort taken in our nation to deal with cryptocurrency.... Am I wrong in thinking this is an area we ought to take a look at?
Director Wray said:
Cryptocurrency is already an issue for us and we use tools to follow the money...whether it's cryptocurrency, whether it's default encryption on messages and devices, we are moving in a direction where, if we don't get our act together, ... all the information we need to do our work will be walled off.
Meanwhile in Australia, Minister for Home Affairs, the Hon. Peter Dutton, addressed the "No Money for Terror" conference saying:
The increasing use of digital and crypto-currencies, stored-value cards, online payment systems and crowd-funding platforms provide new channels through which terrorism may be financed.
As data security and privacy become of greater concern to citizens (both in the US and Australia) the inevitable tension between open systems permitting government and regulatory surveillance and closed systems providing privacy and security will continue to grow.
As has been seen in the "Welcome to Video" takedown, the use of the cryptocurrency transaction record analysis alone (instead of active hacking, surveillance etc) makes possible identifying and tracking criminals in ways which were previously impossible.
Comments