US Navy Sees Bitcoin As An ‘Evolving Threat’

US Navy Sees Bitcoin As An ‘Evolving Threat’
<a href="">geralt</a> / Pixabay

Bitcoin, and the idea of digital currencies in general, has gained a lot of traction in the last year, convincing serious investors like Fortress Investment Group LLC (NYSE:FIG) and Marc Andreessen that we’re looking at the growing pains of a revolutionary new technology. Now it has caught the attention of the US Navy for the exact same reason.

Navy involved in analyzing threat finance

While it might seem like a strange fit, the Navy has been involved in evaluating threat financing for some time. The basic idea is that if you want to track, monitor, and disrupt terrorist organizations then tracking the flow of funds that are meant to finance the groups (and future attacks) is an important part of the puzzle. It’s not fundamentally different from the FBI investigating a criminal organization’s finances alongside other types of crime.

Sohn Investment Conference 2021 Coverage: Octahedron Capital, Glenernie Capital, David Einhorn and more

2021 Sohn Investment ConferenceThe following is our rough coverage of the 2021 Sohn Investment Conference, which is being held virtually and features Brad Gerstner, Bill Gurley, Octahedron's Ram Parameswaran, Glenernie's Andrew Nunneley, and Lux's Josh Wolfe. Q1 2021 hedge fund letters, conferences and more Keep checking back as we will be updating this post as the conference goes Read More

But digital currency could change the way that threat financing is structured by avoiding the world’s financial system and adding a layer of anonymity to transactions that is difficult, though not impossible, to break.

Bitcoin Magazine found a general solicitation from the Navy Engineering Logistics Office asking for vendors to help it “determine the extent to which the nature, trajectory, velocity, and decision making supporting funds flows change with the introduction of virtual currencies into the systems,” and to “determine how virtual currencies might alter threat finance models and whether it is possible to predict changes in its architecture.” (h/t Fox News)

Navy solicitation part of a larger push to monitor anonymous web traffic

The solicitation is also looking for vendors to help the Navy to discover and track sites in the Dark Web that, ironically, the Navy helped to develop in the first place. Development of Tor, the onion router that became widely known after The Silk Road was shut down for money laundering and drug sales, was supported the US Naval Research Laboratory to help protect government communications.

Like Bitcoin, Tor is popular with all kinds of groups who value anonymity (which includes activists, journalists communicating with sources, and libertarians, alongside the nefarious groups that usually make headlines), so it’s not surprising that intelligence services want the ability to peer inside. But if the Navy is hard at work trying to track digital currency fund flows, it stands to reason that they’re not the only group trying to do so, proving again that such protocols may obscure what happens online, but they don’t provide perfect anonymity.

No posts to display