In a report of Royal United Services Institute an Internation defense center based in London, Mr.David Carlisle, former Senior Officer in the Department of Treasury’s Office of Terrorism and Financial Intelligence said: “Use of Cryptocurrencies by Terrorist is not a major risk”.
He also added that “information on Terrorists’ application of cryptocurrencies is very limited and unreliable.
All the tech enthusiasts and investors around the world are really excited in Cryptocurrencies but at the same time, they have mixed beliefs and points of view. The tech giant Elon Musk said that cryptocurrencies are vulnerable and have very poor security protocols.
Before discussing further, check out the short intro on CryptoCurrency
In simple terms, it is a virtual currency or a digital asset that usually works as a medium of currency exchange. It is a distributed currency that uses cryptography to secure financial transactions and authenticates the transfer of assets.
This distributed ledger technology is basically a blockchain that acts as a public financial ledger.
And the first distributed cryptocurrency was named Bitcoin which came into effect in 2009 created by Satoshi Nakamoto.
The Rising Concern of Terrorism
Since investing in Cryptocurrencies became a trend, investors or people often forget that Cryptocurrency is still vulnerable and it definitely raises a question of security. The rise of Bitcoin has stimulated the evolution of other cryptocurrencies,.
But do you think everything is good going and safe?
I think no because of a recent study by the Middle East Media Research Institute (MEMRI) affirm that terrorist groups are using Bitcoin and Cryptocurrency to fund their terrorist activities all over.
The Financial Action Task Force (FATF) has recently issued new guidelines for all the countries that fall under its jurisdiction on ho to control cryptocurrencies.
Privacy Of Cryptocurrency is Under Assault
Data Privacy offers advantages for dishonest or illegal dealings. And when Cryptocurrencies uses become unfairly and unauthorized it can bypass government eyes and as a consequence, there is no crypto privacy.
As I spoke earlier of MEMRI which says” Cryptocurrency has come to terrorism with an alliance of terrorist organization misusing the anonymous blockchain technology for raising funds and financing”.
Several Jihad leaders are encouraging the use of Cryptocurrency because it is totally anonymous. The government is continuously running scrutiny on online anonymous services.
As every user is holding the same privileges, if Government agencies restrict the negative use of anonymity, it is actually restricting everybody’s freedom of using it.
Few Vulnerabilities In Cryptocurrency
We have accumulated legit information from our sources on vulnerabilities in Cryptocurrency and how to avoid such factors in order to make it more secure.
The price of Bitcoin grew almost to $20,000 and then again it dropped to $ 6,000 a few days after. This proves that cryptocurrency is highly volatile. Most of the people don’t have idea of how cryptocurrency operates and that is the reason the rise and fall of cryptocurrency values are unpredictable and complicated.
Lack of Regulations
Of all the serious issues, improper regulation of cryptocurrency is the major one. People often want to invest in Cryptocurrency due to the absence of suitable regulations. Implementing regulations would ensure ethical use, stability, and reduced vulnerability in cryptocurrency.
The first problem is scalability when it comes to the infrastructure of cryptocurrency. It is vulnerable because no one tries to understand the concept of scalability trilemma which states that among three options speed, decentralization and security a cryptocurrency can select only two. And most of the popular names go for decentralization and security.
Cryptocurrency is prone to cybersecurity and imminent hacks. Recent complaints are registered by a Swiss Blockchain company saying $8 million from their cold wallet was stolen. Multiple others have witnessed issues related to security breaches. Hackers also attack various organizations by encrypting their data and demanding a ransom in Bitcoin worth thousands of dollars.
The Solution to protect Privacy and Enforce Regulation
The U.S Government homeland security officials started researching about how the terrorist are using Bitcoin to prevent them from continuing the anonymous transactions for illegal exports of several things.
FinCen came up with several strict measures and regulations molding the developers as well as the users of privacy-protecting softwares.
The U.K Government also heightened regulatory measures to eliminate digital anonymous crime with digital curencyies.
The Financial Action Task Force made a new guideline that is likely to impact cryptocurrency and terrorism funding. With strengthened guidelines, Customers have to provide more information apart from KYC, AML, and CFT in order to make a transaction.
All these steps towards Crypto Privacy are decent but there should be a global regulatory framework for better use cryptocurrency.
Popular crypto organizations are currently working on scalability issues. Bitcoin is creating a Lighting Network for investors having a dedicate note which connects to at least one other node and it is trying to bring a multi-signature wallet that recognizes the real owner of the currency and the receiver of Bitcoin. This measure can also reduce transaction costs and help in faster transactions.
Ethereum focuses on the blockchain sharding process on the other hand. The entire network is supposed to be partitioned by sections of shards and every shard will have the privilege to grab their own state and transaction history. These will automatically speed up the transaction.
With forthcoming developments in Blockchain technology, the vulnerabilities in cryptocurrency will eventually fade off. And Financial experts say that Cryptocurrencies have the potential to revolutionize Finance Sector, as well as healthcare, technology, and many other industries.
Wrapping things Up
We talked on Privacy In Crypto: The Impact of Rising Terrorism Concerns as it creates tension among people. No one can deny that FATF’S increased regulations will pull the good strings and
broaden the sense of security among clients.
Global regulations will draw more people and they will eventually realize the value of anonymity. Moreover, regulators are trying to come up with better solutions in order to face terrorism and fight them without restricting our freedom to privacy.