REGULATION

Trump advisor cites 9/11 to explain Bitcoin risks

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Trump advisor cites 9/11 to explain Bitcoin risks

Trump advisor Mike Pompeo expressed his views on cryptocurrency regulation during an interview on the morning of August 20th. His comments may spark backlash from Bitcoin supporters.

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MIKE POMPEO: "Anonymous" Bitcoin Poses National Security Threat

U.S. Secretary of State under President Trump, MIKE POMPEO, has stated that the so-called "anonymous transactions" in cryptocurrencies pose significant risks to U.S. national security. To illustrate his point, he referenced the 9/11 terrorist attacks:

We are very aware of the risks associated with anonymous transactions. We learned this from the 9/11 attacks where we did not accurately trace the flow of funds involved in the terrorist attacks 15 years ago, not understanding the movement of funds and who was operating them.

We need to maintain within the same framework, a financial system, a "global financial system."

Reports indicate that Pompeo believes government agencies should be able to trace Bitcoin just as easily as they can track other financial transactions. Otherwise, Bitcoin could become a source of funding for the next 9/11 event.

9/11 Mainly Supported by U.S. Banks and U.S. Dollars

According to previous data from Chainalysis and the United Nations Office on Drugs and Crime (UNODC), traditional fiat currency transactions on the dark web still exceed those in Bitcoin by more than 800 times, not including transactions outside of the dark web.

Cryptocurrency research firm Messari also referenced a report from the European law enforcement agency titled "Why Cash is Still King." The European law enforcement agency stated:

Almost all criminals use traditional fiat currency in the process. Generally, Bitcoin and cryptocurrencies are not very popular among criminals.

In fact, according to a report from the Center for a New American Security, the 9/11 terrorists extensively used U.S. banks, opened accounts in their own names, and used them to raise and transfer funds, with billions of dollars hidden within the formal financial sector.

Nevertheless, the idea that "cryptocurrencies are a source of terrorist financing" continues to spread in the regulatory field.

On August 18th, the New York Times reported that Hamas and other terrorist organizations have begun using Bitcoin as a means of fundraising for their illegal activities, limiting government tracking of their funding sources.

Gabor Gurbacs, head of the cryptocurrency department at hedge fund VanEck, opposes Pompeo's views and believes that Bitcoin "could enhance the security of the U.S. and global financial infrastructure."

In fact, the anonymity of Bitcoin has been overly mythologized, similar to how Facebook and Twitter can be used under pseudonyms, Bitcoin addresses do not directly reveal the user's real name, and law enforcement agencies can still use external tools to track them.

Further Reading

  • Can the Reserve Bank of India Ban the Use of Cryptocurrencies? Central Bank and Cryptocurrency Court Standoff
  • Could Bitcoin Serve as a Shield of Resistance? Hong Kong Protesters Massively Withdraw Assets from Banking System

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