New Bill Asks Homeland Security to Investigate Whether Terrorists Use Bitcoin
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New Bill Asks Homeland Security to Investigate Whether Terrorists Use Bitcoin

Despite little evidence.

One Wednesday, US congresswoman Kathleen Rice introduced a new bill that would task the Department of Homeland Security (DHS) with conducting a threat assessment for terrorists using virtual currencies like bitcoin to fund their operations.

If passed, the bill, called the Homeland Security Assessment of Terrorists' Use of Virtual Currencies Act, would task DHS to work with other federal agencies to investigate whether terrorists use virtual currencies, or receive funding with them. The assessment must be completed within 120 days of the Act passing Congress, and must be shared with state and local law enforcement agencies. Rice is a ranking Democrat in the House Counterterrorism and Intelligence Subcommittee, where the bill passed on Thursday.


Read More: Europe Wants to Crack Down on Bitcoin Despite Little Evidence that ISIS Uses It

"[Virtual currencies are] fast and efficient, there's a greater degree of anonymity, and the transactions can often be difficult for law enforcement to track," Coleman Lamb, a spokesperson for Rice's office, wrote in an emailed statement. These factors likely appeal to terrorist organizations like ISIS, Lamb continued.

Criminals like pedophiles and drug dealers certainly do use virtual currencies, but as far as terrorism goes, there's been lots of bark and very little bite when it comes to actually proving that terrorists use the virtual currency in any meaningful way.

Claims that ISIS has received millions in bitcoin funding have been debunked as unverifiable, and the most credible examples of ISIS-tied bitcoin use we have amount to a couple thousand dollars. According to previous reports, ISIS rakes in millions of dollars per day through more traditional avenues like oil.

An alleged ISIS funding page on the dark web, discovered in 2015. It's unclear if funds, if any, actually went to ISIS.

"The evidence suggests that terrorists' use of virtual currencies has so far been limited to a few instances and not widespread," Lamb, Rice's spokesperson, admitted in an email. "But those cases are all very recent, indicating that terrorists—like most people—are becoming more aware of and familiar with virtual currencies."

While the federal government wants to get ahead of what it sees as an emerging trend for terrorist organizations, some in the virtual currency community, like Zooko Wilcox (co-founder of super-anonymous bitcoin alternative Zcash), welcome the assessment as an opportunity to put the supposed link between terror and virtual currencies to bed for good.

"I think it would be good to have more data on whether it is true," Wilcox wrote me in an email, "that criminals use bitcoin but terrorists don't."