Pentagon taps Inca Digital to review crypto national security risks

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The Pentagon is spearheading a new program to dig deep into different types of cryptocurrencies and uncover the kind of risks they could pose to national security and law enforcement, a report said. revealed a report published Friday by the Washington Post.

The Defense Advanced Research Projects Agency, the research and development arm of the United States Department of Defense, intends to examine distributed ledger financial applications.

As part of the program, the Pentagon and DARPA enlisted the services of Inca Digital, a provider of digital asset data and analytics, for a year-long collaboration to investigate security risks national posed by cryptocurrencies using sophisticated tools to provide a more critical assessment. crypto markets.

A cryptocurrency is a digital asset used as a medium of exchange, where ownership information is kept in a ledger as a securely encoded digital repository that stores transaction records, regulates the creation of new currencies and validates the transfer of ownership of this currency.

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Pentagon: identifying fraud and cryptographic threats

Inca Digital and the Pentagon will embark on a project called “Mapping the Impact of Digital Financial Assets” which aims to develop “cryptocurrency ecosystem mapping software” for the US government and commercial enterprises.

Adam Zarazinski, the chief executive of Inca Digital, said his company will help the government better understand how blockchains work. The initiative also aims to simplify the identification of bitcoin fraud and illicit trading activities.

DARPA will collaborate with Inca Digital on the development of a “first-of-its-kind” cryptographic mapping system under a Phase II Small Business Innovation Research (SBIR) contract, according to a statement from the DARPA. Pentagon.

Zarazinski said that given the growing importance of crypto assets, the Pentagon and other government agencies “need better tools to understand how digital assets work and how to use their jurisdictional power in virtual currency markets to worldwide”.

DARPA has been studying blockchain for years

DARPA has examined blockchain technology for a number of years, both for its potential ramifications and as a practical method for its own purposes. He partnered with Trail of Bits in June this year to assess the degree of decentralization of blockchains and detect their weaknesses.

Meanwhile, there are already over 12,000 cryptocurrencies, and the growth rate is simply staggering. From 2021 to 2022, the number of cryptocurrencies more than doubled. At the end of 2021, around 1,000 new cryptocurrencies were added to the market every month.

Joseph V. Micallefa 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 to other assets.

Second, the introduction of digital currencies means a huge shift in wealth.

The third and most important national security threat to the United States is the effects of digital currencies on the position of the US dollar as a reserve currency.

BTC total market cap at $364 billion on the daily chart | Source: TradingView.com

Featured image from CoinEdition, Chart: TradingView.com
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