New Legislation Aims to Curb Cryptocurrency Use in Terrorist Financing

Understanding the New Legislation

U.S. Representative Ted Budd (R-NC) has taken the plunge into the murky waters of cryptocurrency legislation with his new bill, H.R. 296. This bill aims to create a dedicated agency focused on the use of cryptocurrencies for terrorist financing. Talk about a buzzkill for crypto enthusiasts, right?

What’s in the Bill?

Besides establishing this shiny new task force, the bill also proposes:

• Reward programs for tips leading to convictions linked to terrorist use of digital currencies.
• A Fintech Leadership in Innovation and Financial Intelligence Program aimed at fostering innovative tools to fight back against the dark side of digital currencies.
• Various other unspecified purposes — because who doesn’t love a little mystery?

Legislative Process and Support

After making its grand entrance on Wednesday, the bill was referred to the Committee on Financial Services and the Committee on the Budget for its first dose of deliberation. Co-sponsored by a bipartisan group from both sides of the aisle, including Warren Davidson (R-OH) and Darren Soto (D-FL), it seems like Rep. Budd has found some willing partners for this legislative endeavor.

Ted Budd: A Crypto Advocate

Hold your horses; Budd isn’t just some crypto-hater trying to rain on everyone’s Bitcoin parade. He’s a known supporter of blockchain and cryptocurrencies in Congress. Back in 2019, this dude was all about greater clarity in crypto tax laws, even introducing a couple of bills aimed at improving regulations around the industry.

The Counterargument: Is Crypto Really a Terrorist Tool?

Now, let’s address the elephant in the room. While combating terrorist financing is a crucial task, the actual use of cryptocurrencies by terrorist groups is still somewhat of a gray area. In 2020, the Chainalysis firm found that the claims of ISIS holding a whopping $300 million in Bitcoin were, well, more fiction than fact.

But wait—there’s more! The U.S. Justice Department has indeed seized crypto funds from networks linked to groups like ISIS and Al-Qaeda, suggesting a more complex relationship between the crypto world and these networks. Also, it’s reported that some ISIS media outlets were collecting donations in Monero, the go-to for privacy lovers everywhere.

The Ripple Effect of Cryptocurrency in Recent Events

Adding fuel to the fire, a recent report from Chainalysis indicated that participants in the January 6th Capitol riot received substantial Bitcoin donations from a now-deceased French programmer known for backing far-right causes. U.S. law enforcement must be shaking their heads as they investigate possible connections between these donations and the riot planning.

The Bottom Line

With Rep. Budd’s new bill, it seems like we’re standing at the crossroads of innovation and regulation. Can crypto be a tool for good, or will it always have a dark side? Only time—and a whole lot of research—will tell.