WASHINGTON – The U.S. House of Representatives today passed H.R. 428, the Homeland Security Assessment of Terrorists’ Use of Virtual Currencies Act, introduced by Rep. Kathleen Rice. The bill would require the Homeland Security Assessment of Terrorists’ Use of Virtual Currencies Act would require DHS’ Office of Intelligence and Analysis to develop and submit a threat assessment report on the use of virtual currencies by terrorist organizations. The bill, which was co-sponsored by Rep. Peter King, passed by a bipartisan vote of 422-3.
In recent years, there have been several instances in which terrorist organizations have turned to virtual currencies to support and finance their operations. In December 2017 for example, a woman in New York was arrested and pled guilty after she obtained $62,000 in Bitcoin and other virtual currencies to send to ISIL. Using those virtual funds, she was able to send the money via shell entities in Pakistan, China, and Turkey that were fronts for ISIL. Virtual currencies offer high-speed, low-cost financial networks with access to users across the globe. And many forms of virtual currencies also offer their users anonymity. These factors have made virtual currencies an increasingly appealing tool for terrorists seeking to circumvent American law enforcement and financial institutions. As terrorist organizations and lone-wolf attackers become more technologically sophisticated, and virtual currencies become more widely accessible, this threat is only likely to grow.
“There’s no question that threat of terrorism has evolved with the advent of new technology, and it’s critical that we stay ahead of these threats at all times,” said Representative Kathleen Rice. “Virtual currencies have exposed deep vulnerabilities in our counterterrorism efforts, creating new opportunities for terrorist organizations to finance their operations using the darkest corners of the Internet. And right now, our government lacks a comprehensive strategy with which to respond. This bill will give law enforcement officials at all levels the 21st-century solutions, information and resources they need to counter this emerging threat.”
This legislation follows a May 2017 report from the Center for a New American Security (CNAS) that explored the potential threat of the use of virtual currencies to finance terrorist activities. Two of the report’s authors wrote an article in The Hill reiterating the report’s recommendations that Congress and the Administration develop a comprehensive national strategy for virtual currencies and foster innovation in the private sector to help address the threat of terror financing.