The US Department of Defense is launching a new project to investigate the threat posed by new technologies that could threaten national security which includes research into the potential dangers posed by virtual currencies.  According to several reports, the Combating Terrorism Technical Support Office is soliciting vendors for innovative research and development projects to help the military understand new technologies that pose a threat to national security, “bitcoin” and “virtual currency” being among them.

The CTTSO is a division of the Department of Defense that develops counterterrorism faculties and investigates growing threats and irregular warfare through rapid research, development, test, evaluation, and operational support.

According to an unclassified memo dating from January 2014, the project came to the CTTSO because the “introduction of virtual currency will likely shape threat finance by increasing the opaqueness, transactional velocity, and overall efficiencies of terrorist attacks” and that the project “will develop solutions to combat vulnerabilities posed by virtual currencies.”

David S. Cohen, the US Treasury’s Under Secretary for Terrorism and Financial Intelligence, shot down the idea that any digital currency was currently being used as a means of supporting terrorism in a speech covering the Treasury’s findings in March:

Terrorists generally need ‘real’ currency, not virtual currency, to pay their expenses - such as salaries, bribes, weapons, travel, and safe houses.”

He added “The same is true for those seeking to evade sanctions.”

In fact, Cohen highlighted the upside of the US embracing digital currencies, stating “Advancements in technology that allow entrepreneurs and businesses to innovate, grow and hire are crucial to our country’s long-term success.”

CTTSO looks to focus on how to battle the anonymity of the Dark Web, “a region of the internet where activities such as trafficking in drugs, weapons, humans, and chemical, biological, nuclear, and radiological technologies in support of disruptive, nefarious actions goes undetected.”

This is not the first time crypto-currencies have been connected with illicit activity. In Silk Road’s heyday, over 70% of the items listed on the eBay-like site at one point were narcotics, including LSD, heroin and meth-amphetamine. The marketplace was eventually closed down by the FBI, the creator arrested on several pending charges, and “Silk Road” became a buzzword for Bitcoin opponents to illustrate how low the virtual currency world can dip. The United States Department of Defense is taking steps to make sure it doesn’t dip any lower.


The Reddit community has been quite jovial with the news, who wrote headlines such as “Department of Defense to study birth as possible terrorist threat” and “Department of Defense to study FBI and CIA as ongoing terrorist threats.”

The CTTSO looks to spend anywhere from $20 to $60 million on the project, which include other terrorism research topics such as Android, social media, and Motorola. Let’s see if they can beat the hand Silk Road’s reputation has left them.