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Recently, an unclassified memo by the CTTSO was obtained by Bitcoin Magazine, which suggested what areas should be looked at to determine the level of threat virtual currencies actually pose.
A memo detailing some of the CTTSO projects states, "The introduction of virtual currency will likely shape threat finance by increasing the opaqueness, transactional velocity, and overall efficiencies of terrorist attacks," as reported by Bitcoin Magazine, according to IBTimes.
The anonymity offered by virtual currencies is a top point of concern for law enforcement as the transactions are public, but the people involved in the operations are unnamed.
The founder of Bitcoin Ross Ulbricht was arrested in October, 2013, and indicted in February. Prosecution alleges he was operating Silk Road, a black market website that allowed its users to buy and sell drugs and other illegal goods and services anonymously. The site could only be accessed through the Tor anonymizing service and the deals were made using a bitcoin-based payment system, which also enabled users to conceal their identities.
In January, federal charges were made public against Robert Faiella and Charlie Shrem, the CEO of the bitcoin exchange service BitInstant. They have been accused of operating a bitcoin exchange business in connection with the ongoing investigation involving Silk Road.
And in February, Mt. Gox, a top bitcoin exchange, suddenly filed for bankruptcy, claiming that hundreds of millions of bitcoins were stolen.
Accordingly, the Pentagon's CTTSO has called for research into the "anonymizing software" and "Dark Web", or corners of the internet not indexed on normal search engines.
The agency views anonymous networks like TOR as a convenient path to traffic drugs, humans, and weapons of all sorts.
The CTTSO's mission against potential threats also demands "methods and means to systematically discern and display 'precursors of instability' in the Dark Web."
CTTSO is concerned that anonymous networks are a way to successfully traffic drugs, weapons, people and nuclear tech under the radar. Bitcoins, according to the business site, can allow illegal operations with the speed of the Internet, but with the secrecy of a cash deal.
The CTTSO is also researching Android, Motorola, social media, and virtual reality for their potential to be used in terrorism campaigns, the International Business Times noted.
However, Treasury Department probe found no evidence of bitcoin being used to finance terrorism, but the anonymous nature of the transactions still has many law enforcement officials worried.
Pelle Braendgaard, the CEO of Bitcoin wallet Kipochi, explained in an interview that the cryptocurrency can actually help governments better understand what's happening with their economies since every transaction is recorded on the block chain, unlike when using real money when no one has a clue where the money ends up.
During the US Senate hearings on Bitcoin, FinCEN director Jennifer Shasky Calvery told Congress that "...cash is probably still the best medium for laundering money."
At the end of the day, at this juncture, Bitcoin poses an almost inconsequential security risk to what those who seek to curb money laundering for the purposes of national security and drug prevention mostly because of the market cap for the cryptocurrency.
Bitcoin is still in the early days of its life; the market cap of Bitcoin is shy of $6 billion (and the market cap of all other alt-currencies is certainly shy of $2 billion).
Globally, it is estimated that there is around $5.5 billion laundered each day. While the potential disruption of Bitcoin is great, it's barely a blip on the radar when it comes to current criminal enterprises, SiliconAngle analysts conclude in their article.
The true threat of Bitcoin is to the international banking community.
They are shut out of making a profit on the monetary system if people use a secure version of what is now Bitcoin.
They cannot allow this, therefore are in the process of criminalizing its use.