updated 07:45 pm EDT, Mon May 5, 2014
CTTSO solicits vendors for program to aid military understanding of technologies
A division of the Department of Defense is investigating cryptocurrency, including Bitcoin, for possible links to crime and terrorism activities, according to an article from the International Business Times. The Combating Terrorism Technical Support Office, a department responsible for developing and investigating counterterrorism abilities, created solicitation number N41756-14-Q-3272 in order attract vendors to aid military branches in understanding the developing technology.
The anonymity factor with Bitcoin and other virtual currencies has lead to the office's research in this situation, based on the possibility that such alternative currencies may pose a threat to national security. With no governing body or regulation, and only public character string addresses for identification, tracking or blocking cryptocurrencies would be difficult if a threat is detected.
There is no entry barrier to cross for virtual currencies, or nationally adopted trading houses -- so the online currency offers flexibility without a paper trail, much like cash. Government agencies have caught Bitcoin in the middle of criminal dealings before, such as Silk Road, leading to the precedent that virtual currencies can be used for nefarious means.
Bitcoin Magazine discovered an unclassified memo detailing the support request in a Broad Agency Announcement (BAA) from the Department of the Navy. Information in the memo asks for support to help "develop and/or enhance new concepts and constructions for understanding the role of virtual currencies." The memo asks for specific strategies and warning signs that could be used to help detect wrongful actions based on their trends and history.
One statement from the memo calls attention to the idea that "radical connectivity is blurring national lines, and facilitating the transfer of virtual currency between otherwise disparate non-state actors." It goes on to say that "the introduction of virtual currency will likely shape threat finance by increasing the opaqueness, transactional velocity, and overall efficiencies of terrorist attacks."