The Defense Advanced Research Projects Agency (DARPA) has contracted digital asset data and analytics provider Inca Digital to research national security risks posed by cryptocurrency.
DARPA, the research and development agency of the U.S. Department of Defense, plans to analyze activity related to financial applications of distributed ledgers.
The agency has awarded Inca Digital a Phase II Small Business Innovation Research (SBIR) to conduct this research in a project labelled "Mapping the Impact of Digital Financial Assets."
Inca will develop a crypto ecosystem mapping tool to analyze crypto financial data and risk. Its aim will be to help the U.S. government and the private sector understand how crypto may be linked to money laundering, terrorist financing and sanction evading, as well as identify how cryptocurrency may affect traditional financial systems and vice versa.
"Given the increasing prevalence of digital assets, the Department of Defense and other federal agencies need to have better tools to understand how digital assets operate and how to leverage their jurisdictional authority over digital asset markets globally," Adam Zarazinski, CEO of Inca, said.
DARPA's contract further demonstrates the concerns government agencies have over crypto being used to fund crime, terrorism, rogue states and other malevolent actors, as well as their desire to get pro-active in thwarting them.