Donald Trump’s potential return to the White House promises a crypto-friendly presidency, with proposed regulatory rollbacks likely to impact diverse stakeholders. While cryptocurrency investors welcome this shift, experts warn that such policies could also empower extremist and terrorist groups.

Looser Regulations and Extremist Financing

Trump’s pro-crypto stance includes promises to integrate digital currencies into mainstream financial systems. However, analysts, like Jessica Davis of Insight Threat Intelligence, caution that loosening regulations could enable extremist groups to raise and transfer funds with less scrutiny. Groups like The Base, a neo-Nazi organization, have already solicited crypto donations for paramilitary training and equipment, exploiting the anonymity of digital assets like Monero.

Over recent years, cryptocurrency has become a favoured tool for far-right and terrorist organizations. These groups use crypto to bypass traditional banking systems, which often block or flag suspicious transactions. For example, during Trump’s campaign, Bitcoin and Monero wallets were openly advertised by groups seeking donations for activities ranging from legal defence to propaganda creation.

Biden’s Crackdown vs. Trump’s Embrace

The Biden administration has taken a strict approach to crypto, citing national security concerns. Regulatory agencies have targeted exchanges to enforce anti-money laundering laws. In contrast, Trump’s policies, including naming pro-crypto advocate Howard Lutnick as Commerce Secretary, signal a friendlier environment. Plans for a strategic Bitcoin reserve further highlight his administration’s crypto enthusiasm.

Private Sector and Oversight Challenges

Mark Dwyer from the Anti-Defamation League notes that the private sector has lagged in addressing extremist financing, including in the crypto space. Without clear regulatory oversight, platforms like Monero have become hotspots for illicit activity due to their enhanced privacy features. Analysts urge stronger measures to prevent misuse of digital currencies by extremist actors.

While Trump’s policies may boost innovation in cryptocurrency, they risk creating avenues for misuse. Experts warn that without proper safeguards, these changes could inadvertently fuel extremist agendas, threatening broader security interests.