Pentagon uses Inca Digital to investigate crypto risks to national security
The Pentagon is spearheading a new program to delve into various types of cryptocurrencies and determine what kind of risks they may pose to national security and law enforcement, a Friday report published by The Washington Post revealed.
The Defense Advanced Research Projects Agency, the research and development arm of the United States Department of Defense, intends to investigate distributed finance applications.
As part of the program, the Pentagon and DARPA have enlisted the services of Inca Digital, a digital assets and analytics provider, for a one-year collaboration to investigate national security risks posed by cryptocurrencies using sophisticated tools to provide a more critical assessment of crypto markets .
A cryptocurrency is a digital asset used as a medium of exchange, where the ownership information is held in a registry in the form of a secure coded digital depository that stores transaction records, regulates the creation of new currencies and validates the transfer of ownership of that currency.
Image: Blogs iadb
Pentagon: Identifying Crypto Scams and Threats
Inca Digital and the Pentagon will embark on a project titled “Mapping the Impact of Digital Financial Assets” that aims to develop a “cryptocurrency ecosystem mapping software” for US government and commercial businesses.
Adam Zarazinski, CEO of Inca Digital, stated that his company will help the government better understand how blockchains work. The initiative is also intended to make it easier to identify bitcoin fraud and illegal trading activity.
DARPA will work with Inca Digital on the development of a “first-of-its-kind” crypto-mapping system under a Phase II Small Business Innovation Research (SBIR) contract, according to a Pentagon statement.
Zarazinski stated that given the growing prominence of crypto-assets, the Pentagon and other government agencies need “better tools to understand how digital assets work and how to exercise their jurisdictional power over virtual currency markets around the world.”
DARPA has been studying Blockchain for years
DARPA has been investigating blockchain technology for a number of years, both for potential consequences and as a practical method for its own goals. It teamed up with Trail of Bits in June this year to assess the extent to which blockchains are decentralized and to discover their weaknesses.
Meanwhile, there are already more than 12,000 cryptocurrencies and the growth rate is simply astonishing. From 2021 to 2022, the number of cryptocurrencies more than doubled. By the end of 2021, around 1,000 new cryptocurrencies were added to the market every month.
Joseph V. Micallef, a best-selling author of military history and world affairs, identifies three ways cryptocurrencies could affect US national security in a Military.com article.
First, Bitcoin and other cryptocurrencies are easier to “launder” than cash, or convert into other assets.
Second, the introduction of digital currencies means a huge wealth shift.
The third and most significant threat to US national security is the effects of digital currencies on the US dollar’s reserve currency status.
BTC total market cap at $364 billion on the daily chart | Source: TradingView.com Featured image from CoinEdition, Chart: TradingView.com
