Bitcoin is a matter of national security — Deputy CIA director

The US Central Intelligence Agency is increasingly incorporating Bitcoin as a tool in its operations, and working with the cryptocurrency is a matter of national security

The Central Intelligence Agency (CIA) is increasingly incorporating Bitcoin (BTC) as a tool in its operations, and working with the cryptocurrency is a matter of national security, according to Deputy Director Michael Ellis.

Speaking on the Pomp Podcast with Anthony Pompliano on April 27, Ellis explained that the agency is tracking and collecting data on BTC as part of its broader counter-intelligence activities and works closely with U.S. law enforcement to monitor the cryptocurrency.

“Bitcoin is here to stay — cryptocurrency is here to stay. As you know, more and more institutions are adopting it, and I think that is a great trend. One that this administration has obviously been leaning forward into,” Ellis stated.

The deputy director’s comments highlight the evolving role of cryptocurrency in the domain of national security. While Congress continues to debate comprehensive legislation for crypto regulation, U.S. intelligence agencies have already integrated cryptocurrencies into their operations.

Earlier this year, the agency reportedly used BTC to pay ransom to a hacker group that threatened to shut down a major hospital. However, Ellis clarified that the agency prefers to use fiat currency for ransom payments whenever possible.

“We try to avoid paying ransom. It’s a last resort. And when we do pay it, we prefer to pay in U.S. currency. But in this case, the facts of the matter required us to pay in Bitcoin.”

The agency’s involvement with crypto is part of its broader efforts to counter threats from nation-state actors, such as North Korea, which has been known to engage in crypto theft to fund its nuclear and missile programs.

Earlier this year, a North Korean hacker applied for an engineering role at U.S. crypto exchange Kraken but was ultimately spotted during the interview process.

“What started as a routine hiring process for an engineering role quickly turned into an intelligence-gathering operation to spot red flags in candidates applying for roles at Kraken but weren't necessarily applying to work at Kraken,” the exchange stated in a May 1 blog post.

According to Kraken, the applicant appeared to be guided through the interview and switched between voices.

“This candidate was also performing tasks that appeared to be designed to frustrate or stall the hiring process. For example, he joined the interview using a name different from the one on his application and changed his voice at times during the interview.”

Instead of immediately rejecting the applicant, which would have tipped him off, the crypto exchange decided to stall him and advance him through its hiring process to collect information about the tactics used by the North Korean hacker.

The European Union is planning to ban privacy-preserving tokens, such as Monero and Zcash, and also to outlaw anonymous cryptocurrency accounts by 2027 as part of broader Anti-Money Laundering (AML) measures.

Under the new Anti-Money Laundering Regulation (AMLR), which will come into effect in 2027, credit institutions, financial institutions and crypto asset service providers (CASPs) will be prohibited from maintaining anonymous accounts or handling privacy-preserving cryptocurrencies.

“Article 79 of the AMLR establishes strict prohibitions on anonymous accounts […]. Credit institutions, financial institutions, and crypto-asset service providers are prohibited from maintaining anonymous accounts or performing transactions without knowing the beneficiary at any stage of the transaction chain,” explains the European Crypto Initiative in its latest AML Handbook.

The EU’s plans to ban privacy coins and anonymous crypto accounts were announced in September 2023 as part of a package of proposals to revise the Union’s AML framework.

The proposals are currently being finalized by the European Parliament and Council, with the final legal acts expected to be published later this year.

The European Union’s plans to ban privacy-preserving tokens and also to outlaw anonymous cryptocurrency accounts by 2027 as part of broader Anti-Money Laundering (AML) measures have been rolling out gradually.

According to the latest update by the European Crypto Initiative, which provides analysis and commentary on EU legislation and regulation affecting crypto, the European Parliament and Council are planning to ban so-called privacy coins, such as Monero and Zcash.

The plans were announced in September 2023 as part of a package of proposals to revise the Union’s AML framework, which are now being finalized by the European Parliament and Council, with the final legal acts expected to be published later this year.

The proposals are also set to ban so-called "high-risk" crypto service providers from offering any type of service to non-EU residents.

The European Union's plans to ban privacy-preserving tokens and also to outlaw anonymous cryptocurrency accounts by 2027 as part of broader Anti-Money Laundering (AML) measures are rolling out gradually.

According to the latest update by the European Crypto Initiative, which provides analysis and commentary on EU legislation and regulation affecting crypto, the European Parliament and Council are planning to ban so-called privacy coins, such as Monero