One of the things that make cryptocurrencies tricky today is the absence of a third party that can confirm transactions. Being decentralized in nature, it has been used by criminals, tax evaders, and even by those who launder money. What if blockchain tech was ultimately used to influence the US election?
Russian Intelligence officers were able to obtain Bitcoin in 2016. The virtual coins that were collected were then used in order to fund the registration of dcleaks.com. It’s a website that was able to post some email that had been stolen during the presidential campaign of Hilary Clinton. As for the hosting, it was also paid using Bitcoin as well.
The Justice Department accused 12 Russian operatives of interfering in the 2016 presidential election via their hacking scheme. The indictment illustrated how Russian operatives were able to hack the Democratic Party. In addition to this, it also showed exactly how cryptocurrencies can become a tool that can be used by hackers and intelligence agencies considering the anonymity that it provides its users.
John Levin who is the co-founder of Chainalysis, a company that helps track cryptocurrency payments, he said that “This is the first clear example in court documents of cryptocurrency being used to purchase capabilities that could be leveraged in attacks on national security”.
What makes this case unique is the fact that financial transactions are tricky on intelligence operations. Electronic payments are generally off limit to undercover spies considering how easy it is to trace someone. But with cryptocurrencies at work, things have changed.
How Will This Affect Regulations
Japan is one of the countries that have accepted cryptocurrencies openly. However, upon the recent hack, Japan’s FSA decided to take a closer look at the operations of cryptocurrency exchanges. However, one development in Japan’s crypto regulation is its fight against digital currencies that offer an extra layer of anonymity to its users.
On June 18, Japanese Financial Security Agency announced a ban on all cryptocurrencies that offer anonymity to its users. These digital currencies include zcash, dash, and monero. And for this reason, Japanese crypto exchanges have pulled out these cryptocurrencies.
This can be a wakeup call for regulators especially after the recent case wherein Russian hackers made use of Bitcoin in their operations to influence the US elections two years ago.
Money Laundering and Other Illicit Activities
The reason why countries are hesitant to deal with cryptocurrencies is the fact that digital currencies can be used to launder money and do illicit activities. For this reason, exchanges are pressured and are subject to anti-money laundering rules. In most countries, exchanges are now required to know who their clients are. Identification, address, and bank accounts are collected in order to make it easier for authorities to take a closer look if something looks fishy.
Though Bitcoin has been considered by the US SEC as a commodity along with Ethereum, how will this recent development affect the price of Bitcoin in the coming days? Bitcoin has been staying within $6,000 after dropping to around $5,700. Also, will we be seeing more countries using Bitcoin and other cryptocurrencies for their operations?