Tuesday, October 15

Non-Compliant Fintechs Won’t Survive the War on Terror

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United States Treasury undersecretary Sigal Mandelker stated that cryptocurrencies could become “the next frontier” in the war on terrorism.

According to a press release published on the U.S. Treasury’s website on Sept. 11, Mandelker made her remarks during the 19th annual international conference on counterterrorism.

Cash is still predominant

While Mandelker admitted that most terrorist organizations still rely on various traditional means of financing such as cash, she also said that she believes crypto could become “the next frontier”:

“Terrorist organizations and their supporters and sympathizers are constantly looking for new ways to raise and transfer funds without detection or tracking by law enforcement.  While most terrorist groups still primarily rely on the traditional financial system and cash to transfer funds, without the appropriate strong safeguards cryptocurrencies could become the next frontier.”

Hamas already tried to use Bitcoin

She also noted that in February Palestinian Sunni-Islamist fundamentalist militant organization Hamas asked for Bitcoin (BTC) donations via social media. By March, it is claimed that the two specified addresses received at least $5,000 each. Mandelker added:

“While this may not seem like a lot of money, a FinCEN analysis found remittances linked to terrorism averaged less than $600 per transaction.  As we know, the cost of carrying out a terrorist attack can be very low. But the human costs to victims is always extraordinarily high.”

Non-compliant networks won’t survive

According to Mandelker, she recognizes that cryptocurrencies are developments in the field of value transmission that require a “tremendous amount of energy and expertise.” However, she also warned that cryptos may never become compliant if a system capable of preventing illicit finance is not in place, and that now is the moment to put the same technological expertise to work. Mandelker added:

“Absent appropriate safeguards to keep our nations and our communities safe from terrorists, rogue regimes, and others who threaten us, the U.S. will work with governments around the world to make sure that non-compliant networks and fintechs do not survive.”

Congressman is not so sure

The last statement seemingly contradicts the declarations made in July by U.S. congressman Patrick McHenry, who represents North Carolina’s 10th District. McHenry is confident that any attempts to stop Bitcoin are futile:

“The world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building, is an unstoppable force.”

As Cointelegraph reported earlier this week, Mandelker also recently stated that Facebook’s Libra stablecoin must meet the highest anti-money laundering and terrorism financing standards.

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