The Cyber Security and Geopolitical Discussion - Crypto Cubed

Crypto Cubed

It’s enigmatic and potential problematic. Lisa Forte, Partner at Red Goat Security , Phil Ingram MBE of Greyhare Media and Ian Thornton-Trump CD, CISO for Cyjax go around the table on Cryptocurrencies and the wide-ranging impact they are having on geopolitical conflict and economic conflict. The panel covers a lot of ground. The sensational trial of Sam Bankman-Fried who was found guilty on all seven counts related to the collapse of FTX could land him 115 years in jail depending on how much momentum there is for an appeal – his attorney Mark Cohen said Bankman-Fried respects the jury's decision but maintains his innocence and will continue to "vigorously fight the charges." So, yet another chapter in the saga may yet unfold.

The background to the trial was straight forward. The FTX exchange fell into bankruptcy after users found they could no longer withdraw their funds, worth billions of dollars in aggregate. The money was funnelled it into a sibling company, called Alameda Research, and used it for risky stock trades, political donations, and funding his extravagant lifestyle. He also flamboyantly ignored his lawyer's advice and prior to the trial he conducted many media interviews as well as written testimony to Congress and then as part of the final trial preceding's appeared on the witness stand to defend himself. It's safe to say the jury was unimpressed as he crumbled against all the evidence, he himself had provided to government prosecutors due to his public statements.

The fundraising efforts and overt Iranian funding of the Hamas terrorist organization came under discussion.  Eleven days after the Terrorist attack in Israel the "U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on ten key Hamas terrorist group members, operatives, and financial facilitators in Gaza and elsewhere including Sudan, Türkiye, Algeria, and Qatar. This action targets members managing assets in a secret Hamas investment portfolio, a Qatar-based financial facilitator with close ties to the Iranian regime, a key Hamas commander, and a Gaza-based virtual currency exchange and its operator." Digging deeper into this it was soon realised crypto currency and exchanges had played a massive part in providing the funds to conduct the sinister attack into southern Israel.  It appears financial sanctions against terrorist organizations were easily bypassed by cryptocurrencies exchanges despite intelligence of digital-currency wallets connected to Hamas receiving about $41 million over the past two years according to Tel Aviv-based crypto analytics and software firm BitOK and information on Palestinian Islamic Jihad receiving $93 million in crypto during the same period, based on crypto researcher Elliptic’s data.

Zooming out of these specific revelations the panel examined the wider implications of both nation state sanction avoidance, the ability to effectively bypass the American financial system and the role of crypto currencies in funding global political movements - somewhat anonymously. There are rather chilling revelations as cryptocurrencies are found at the very centre of political agendas, disinformation campaigns and financial transactions between countries subject to economic sanctions by both US and EU/UK governments. Despite analysis proclaiming that far more legitimate and legal transactions are occurring on crypto currency blockchains than illegitimate and illegal transactions the simple conclusion is we don't know how bad the problem is until the damage has already been done.