The war on terrorism is more a war on crypto as the US Treasury Department looks to block all access to crypto from terrorist organisations, and in so doing, enforce more restrictions upon crypto exchanges, making it more difficult for them to operate, and thereby further preventing citizens from accessing crypto.
Treasury asks for more tools to control crypto
On Tuesday, Deputy Secretary of the US Treasury Department, Adewale Adeyemo, supplied a written testimony to the Senate Banking, Housing & Urban Affairs Committee Hearing, in which he outlined how various terrorist groups were taking advantage of crypto in order to circumvent sanctions and continue financing their war efforts.
Whilst the Deputy Secretary admitted at the end of his written testimony, that “terrorists prefer to use traditional financial products and services”, he still wanted Congress to provide the Treasury with the “necessary tools” to exert more control over virtual assets.
Crypto plays a small role
Preventing terrorist organisations from obtaining funds with which to obtain the weaponry required to kill innocent citizens of any country isn’t something that can easily be argued against. That said, outside of mainstream media reports, it is well known that crypto plays only a very small role in this kind of activity.
By its very nature, crypto is far more transparent than fiat currency, and therefore any terrorist worth their salt is going to avoid using blockchain-based cryptocurrencies that leave their footprints behind for the powerful US intelligence agencies to track.
Protection of privacy is far more important
Yes, there are still ‘mixing’ platforms that exist, that seek to throw trackers off the scent by obscuring the provenance of cryptocurrencies such as bitcoin, and authorities would argue that all privacy in this respect should be prohibited.
That said, the libertarian side of this argument would say that this exact privacy is the right of law-abiding citizens who just want to protect themselves by maintaining anonymity for their online transactions. It isn’t the fault of these citizens that fiat currencies are being more and more regarded with distrust, as their value diminishes with ever increasing rapidity, and government authorities try to exert more and more control over their use.
Inaccurate reporting leads to misinformation
To add to the argument, the Wall Street Journal ran a story, that has since been corrected, that last year’s Hamas attack on Israel was funded by crypto. Key players in Congress such as Senator Elizabeth Warren picked up on the report and used it to try and advocate for stricter crypto regulations.
However, it was since proven by blockchain analytics company Elliptic, that the report was based on its own misinterpreted data, and that this had led to misinformation.
Tom Emmer, House Majority Whip, posted the following on his X account in order to clarify the situation:
“Senators are writing legislation based on the Wall Street Journal's inaccurate reporting. Since Treasury has accurate data, it has an obligation to correct the record on the size of Hamas's digital asset fundraising efforts.”
Biden Administration’s anti-crypto stance
The Biden Administration has shown itself to be anti-crypto in the extreme, and rather than throw its support behind an incredibly innovative industry that has the potential to provide huge wealth to the US, it has instead chosen to try and protect the banking industry that no doubt sees itself threatened into obsolescence by a virtual assets industry that provides far more rapid and nimble payments. The struggle continues.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
