Bitcoin Owning Contractors With U.S. Security Clearance May be Flagged 'Risky'

According to multiple reports, the Pentagon and the Defense Department are debating on whether or not cryptocurrency ownership is a problem for those who have U.S. security clearances and those applying for these privileges. The U.S. agencies may define digital currency owners as a ‘security risk’ in order to protect foreign and domestic classified information.

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If You Own Bitcoin and Have U.S. Security Clearance Then You Might Have a Problem

American bureaucrats are deliberating on whether or not they should flag cryptocurrency investors who have special security clearances to classified government information. An individual who owns a cryptocurrency like bitcoin or ethereum, may be considered “risky” in the eyes of the Pentagon. This past February the Defense Security Service (DSS) and the Pentagon revealed they were working on guidelines for reporting cryptocurrency ownership. According to another report published on May 22, the debate is currently being argued and government contractors are already upset about the backlog of other security clearance issues.

A director for Financial Services Innovation at Carnegie Mellon University, Param Vir Singh, believes cryptocurrencies do have security risks.

“There are a lot of good things about cryptocurrencies, but at the same time there are these security risks,” explained Param Vir Singh this week.

Think about a knife: It could be used for good things and it can be used for bad things as well.

DSS Recommends Cryptocurrency Owners With Security Clearance Should Report Their Virtual Currency Holdings

Further, the columnist Adam Reese recently reviewed an email by a DSS employee named Chad M. Campbell — which indicates that the security specialist recommends individuals who apply for U.S. security clearance need to report their cryptocurrency holdings on the agency’s Standard Form 86 (SF86). Additionally, the reporter received a reply from Defense Security Service Public Affairs which stated:

“DSS has fielded a number of questions from industry as to whether ownership of cryptocurrencies, such as Bitcoin, should be reported by cleared persons or security clearance applicants,” explains the Defense Department.

There is no current Department of Defense guidance related to the reporting of ownership of cryptocurrencies. DSS is working with DoD policy offices for further clarification and once such guidance is issued, DSS will ensure the widest dissemination to industry. Additionally, the email [Campbell’s email] was an internal discussion document which was not intended to serve as policy guidance.

University of California Researcher: ‘Bitcoin Owners Deserve Suspicion’

Individuals and organizations see the security clearance/cryptocurrency discussion as a controversial subject as opinions differ depending on who is discussing the matter. Steve Aftergood of the Federation of American Scientists believes holding cryptocurrencies or other behaviors don’t necessarily make a person risky. “I don’t know if the government has a clear understanding of what makes a person actually a security risk — Instead they look at proxy factors like excessive debt, drug use and contact with the criminal justice system, which don’t necessarily translate to risk,” Aftergood explains.

However, a researcher at the University of California, Nicholas Weaver, disagrees and thinks digital currency holders should be suspects. “Since Bitcoin’s only real use is to buy drugs, etc., it deserves suspicion,” Weaver said this week. It’s also worth noting that some of these DSS and Pentagon officials who firmly believe cryptocurrencies are a ‘security risk’ have no problem with defense contractors who shill centralized blockchains. The DSS is not calling blockchain projects sponsored by Booze Hamilton Allen or the company’s employees suspicious — Nope just bitcoin and public blockchains seem to be a threat at the moment.

What do you think about the DSS and Pentagon’s discussion about bitcoin classification and raising suspicion against cryptocurrency owners? Let us know in the comments below.

Images via Pixabay, DSS, and Shutterstock.