Bitcoin Could Pose as a Problem for Security Clearances in the US

Various Security Organizations Claim

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Just as the Pentagon is in the struggle for the recruitment of more qualified workforce, there is confusion in the process posed to the investors of Bitcoin. The major question would be if investment in Bitcoin and other cryptocurrencies is a risky personal behavior which can flag scrutiny in the security clearance.

Param Vir Singh said;

“There are a lot of good things about cryptocurrencies, but at the same time there are these security risks, think about a knife: It could be used for good things and it can be used for bad things as well.”

The debate has been ongoing in the government where the defense department is in the struggle to define cryptocurrencies. Some people view them as payment and investment methods while others see them as a platform for illegal activities such as drug dealing and money laundering.

Therefore, this debate in the US national security apparatus might keep a total of 4 million people off security clearance. They believe that workers might sell US secrets to enemies through crypto transactions.


In accordance with the International law enforcement groups, cybercriminals and also terrorists protect transactions from investigations by payment using digital assets.

However, Bitcoin has fallen with more than half of the highest level in December and is around $8,400 just as regulators globally evaluate digital assets management. According to Singh, if the US declared crypto as security risks, this could have negative impacts. Additionally, the move to investigate the job applicants owing crypto could be a distractor to the Pentagons efforts in cyberspace expansion.

“If we’re going to say that if you’ve got a Bitcoin or another digital currency account that could be a signal or shoot up a red flag for a security clearance, guess what? Those people aren’t going to sit around waiting to try to onboard for a government job, It would grow the backlog considerably, in my view,” Greg Touhill Said.

Conflict in Messages

The Pentagon has come up with conflicting messages in regard to how they will handle the matter. Just after a certain employee in the defense security service made a suggestion that Bitcoin should be considered a foreign currency and also said that the SF-86 security form should be filled by the clearance applicants, DSS said that there is no guidance by the department of defense.

DSS website Posted;

“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 the industry.”

Huge backlog

The absence of the clear direction from the Pentagon adds to the troubles by government based contractors of if they can hire employees with security clearances. They want to create a clearance system with a backlog of 700,000 investigations and also billion dollar costs.

Raytheon Co. said that working on the clearance system is their first priority. Therefore, Pentagon needs more information from the financial regulators based in the country in order to issue the guidance. The US does not trust Bitcoin as a foreign currency for the tax purposes. Therefore, in case it is viewed as a foreign currency in the US, this can affect the determination of security clearance.

Bad Intent

Steve Aftergood said that the government should consider the fact that owning cryptocurrencies might not be a sign of bad intent.

He said;

“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.”

However, Nicholas Weaver indicated that the pentagons have the right to scrutinize the clearance applicants who own crypto and those holding them as investments.

He said;

“Since Bitcoin’s only real use is to buy drugs, etc., it deserves suspicion. As for the HODL’ers, eh, they will pass through the clearance process OK because it’s clear they are just little speculators. Or outright delusional speculators, in which case, do you really want that type of government?”

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