By CCN Markets: When Trump adviser Mike Pompeo addressed crypto regulation during a Tuesday morning interview, he claimed that he…
By CCN Markets: When Trump adviser Mike Pompeo addressed crypto regulation during a Tuesday morning interview, he claimed that he didn’t want to start a “viral moment.” However, at least one of his remarks threatens to spark some blowback from bitcoin investors.
Pompeo, President Trump’s second secretary of state, suggested that the so-called “anonymous transactions” associated with cryptocurrency (almost always incorrectly) presented a major risk to US national security.
To illustrate his point, he invoked the 9/11 terrorist attacks.
“Look, the risk with anonymous transactions is one that we all know well. We know this from 9/11 and terror activity that took place in the 15 years preceding that where we didn’t have good tracking, we didn’t have the capacity to understand money flows and who was moving money.”
“We need to preserve a financial system,” he added, “a global financial system.”
Secretary Pompeo was careful to avoid hot-button language - he didn’t even reference bitcoin or cryptocurrency directly - but the point was clear: authorities must have the ability to track bitcoin payments just as easily as they can track other financial transactions. Otherwise, bitcoin might just fund the next 9/11.
The 9/11 terrorist attacks, of course, occurred long before the creation of bitcoin. And contrary to what US Treasury Secretary Steven Mnuchin might want you to believe, the US dollar served as the attackers’ primary payment instrument.
“The 9/11 attackers used banks in the United States extensively,” according to a report from the Center for a New American Security. “Hijackers opened accounts in their own names and conducted small transactions that were hidden by billions of dollars flowing through the formal financial sector.
Still, the idea that cryptocurrency will fund the next great terrorist attack continues to gain purchase in regulatory circles, and not entirely without merit.
Earlier this week, the New York Times published a report alleging that Hamas and other terrorist groups have begun warming to bitcoin as a tool to finance their illicit operations and limit the ability of governments to track the source of their funds.
Gabor Gurbacs, the crypto chief at fund provider VanEck pushed back against Secretary Pompeo's narrative, arguing that bitcoin "has the potential to increase financial and payments infrastructure security for the United States and the world."
His top solution? A bitcoin ETF.
In any case, the idea that bitcoin is anonymous remains one of the greatest myths about the leading cryptocurrency.
Much like you can tweet under a pseudonym, BTC addresses do not explicitly reveal your real name, but law enforcement agencies can often use external tools to unmask bad actors.
For instance, If your address has ever sent or received funds from a cryptocurrency exchange that complies with KYC regulations, it won’t be long before the authorities come knocking on your door.