Pentagon Considers Cryptocurrency Impacts on Security Clearences

In an age of evolving blockchain technology, many resounding legal questions continue to characterize a complex political debate. In particular, recent concerns over the SEC’s classification of cryptocurrencies as securities and ICOs as functional security exchanges has created a variety of financial regulatory concerns.

But another branch of the United States government is currently grappling with how to account for the new technology within their own area of expertise. Reports suggest that the Pentagon has sparked a national debate regarding cryptocurrency speculation—and how ownership of cryptocurrencies might affect the viability of applicants for top secret security clearances.

The discussion is not limited to the Pentagon, either. The Defense Department has continually grappled with the question of how and where to classify cryptocurrencies, and how to integrate the budding currency into their existing framework and infrastructure.

Because of currencies like Bitcoin had been heavily used in the criminal undergrounds of the dark web for illicit activities in their conception, many government officials worry that even possessing the coin could mark the capacity for problematic character traits. For those looking to hire someone for a government job requiring extensive background checks, even having associated with Bitcoin could be a problem.

This is one reason why the Pentagon is considering including cryptocurrency association among one of the many things they screen for in their comprehensive background checks to obtain a top secret security clearance.

Cryptocurrencies And Criminality

Bitcoin and other prominent alternative currencies have consistently been used to nefarious ends by criminals all around the world. In addition to having been the official currency used for drug deals in the original Silk Road on the dark web, criminals in the modern era have taken advantage of the anonymity inherent to Bitcoin to hide their misdeeds.

Recent investigations in several countries have uprooted several prominent money laundering schemes using cryptocurrencies as cover for major criminal operations.

Despite the criminal underground’s resounding interest in the technology, public commitment to cryptocurrencies has never been higher. Young investors on Wall Street have joined the ranks of Bitcoin investors, taking advantage of volatile prices and a quickly-changing market to make significant gains.

An Ongoing Debate

It is unclear thus far what the exact Pentagon stance on cryptocurrencies might be. The Defense Security Service noted in a recent email that Bitcoin is a “foreign currency,” thus subjecting it to a complicated reporting document known as the SF-86 security form.

However, the department was quick to muddy the waters, responding to questions by saying that, as of now, no official department stance exists on the place of cryptocurrencies in security checks, and how an applicant’s involvement in the industry might affect their trustworthiness moving forward.

The confusion regarding cryptocurrencies and their place in security reporting is clear; some jobs sites even recommend that American hoarders of cryptocurrencies take advantage of the lack of a governmental consensus, deeming that whether cryptocurrencies should be reported to a security officer “depends upon who you ask.”

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