Opinion by: Genny Ngai and Will Roth of Morrison Cohen LLP
Since taking office, the Trump administration has designated several drug and violent cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). US President Donald Trump has also called for the “total elimination” of these cartels and the like. These executive directives are not good developments for the cryptocurrency industry. On their face, these mandates appear focused only on criminal cartels. Make no mistake: These executive actions will cause unforeseen collateral damage to the digital asset community. Crypto actors, including software developers and investors, may very well get caught in the crosshairs of aggressive anti-terrorism prosecutions and follow-on civil lawsuits.
Increased threat of criminal anti-terrorism investigations
The biggest threat stemming from Trump’s executive order on cartels is the Department of Justice (DOJ). Almost immediately after President Trump called for the designation of cartels as terrorists, the DOJ issued a memo directing federal prosecutors to use “the most serious and broad charges,” including anti-terrorism charges, against cartels and transnational criminal organizations.
This is a new and serious development for prosecutors. Now that cartels are designated as terrorist organizations, prosecutors can go beyond the traditional drug and money-laundering statutes and rely on criminal anti-terrorism statutes like 18 U.S.C. § 2339B — the material-support statute — to investigate cartels and anyone who they believe “knowingly provides material support or resources” to the designated cartels.
Why should the crypto industry be concerned with these developments? Because “material support or resources” is not just limited to providing physical weapons to terrorists. “Material support or resources” is broadly defined as “any property, tangible or intangible, or service.” Anyone who knowingly provides anything of value to a designated cartel could now conceivably violate § 2339B.
Even though cryptocurrency platforms are not financial institutions and never take custody of users’ assets, aggressive prosecutors may take the hardline view that software developers who design crypto platforms — and those who fund these protocols — are providing “material support or resources” to terrorists and launch harmful investigations against them.
This is not some abstract possibility. The government has already demonstrated a willingness to take this aggressive position against the crypto industry. For example, the DOJ indicted the developers of the blockchain-based software protocol Tornado Cash on money laundering and sanction charges and accused them of operating a large-scale money laundering operation that laundered at least $1 billion in criminal proceeds for cybercriminals, including a sanctioned North Korean hacking group.
Recent: Crypto crime in 2024 likely exceeded $51B, far higher than reported: Chainalysis
Moreover, the government already believes that cartels use cryptocurrency to launder drug proceeds and has brought numerous cases charging individuals for laundering drug proceeds through cryptocurrency on behalf of Mexican and Colombian drug cartels. TRM Labs, a blockchain intelligence company that helps detect crypto crime, has even identified how the Sinaloa drug cartel — a recently designated FTO/SDGT — has used cryptocurrency platforms to launder drug proceeds.
The digital asset community faces real risks here. Putting aside the reputational damage and costs that come from defending criminal anti-terrorism investigations, violations of § 2339B impose a statutory maximum term of imprisonment of 20 years (or life if a death occurred) and monetary penalties. Anti-terrorism statutes also have extraterritorial reach, so crypto companies outside the US are not immune to investigation or prosecution.
Civil anti-terrorism lawsuits will escalate
The designation of cartels as FTOs/SDGTs will also increase the rate at which crypto companies will be sued under the Anti-Terrorism Act (ATA). Under the ATA, private citizens, or their representatives, can sue terrorists for their injuries, and anyone “who aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism.”
Aggressive plaintiffs’ counsel have already relied on the ATA to sue cryptocurrency companies in court. After Binance and its founder pled guilty to criminal charges in late 2023, US victims of the Oct. 7 Hamas attack in Israel sued Binance and its founder under the ATA, alleging that the defendants knowingly provided a “mechanism for Hamas and other terrorist groups to raise funds and transact illicit business in support of terrorist activities” and that Binance processed nearly $60 million in crypto transactions for these terrorists. The defendants filed a motion to dismiss the complaint, which was granted in part and denied in part. For now, the district court permits the Ranaan plaintiffs to proceed against Binance with their aiding-and-abetting theory. Crypto companies should expect to see more ATA lawsuits now that drug cartels are on the official terrorist list.
Vigilance is key
Crypto companies may think that Trump’s war against cartels has nothing to do with them. The reality is, however, that the effects of this war will be widespread, and crypto companies may be unwittingly drawn into the crossfire. Now is not the time for the digital asset community to relax internal compliance measures. With anti-terrorism statutes in play, crypto companies must ensure that transactions with all FTOs/SDGTs are identified and blocked, monitor for new terrorist designations, and understand areas of new geographical risks.
Opinion by: Genny Ngai and Will Roth of Morrison Cohen LLP.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Marine Le Pen’s political career lies in tatters.
After decades of plotting her ascent to the very pinnacle of French politics, she has now been pushed down the mountain, and her fall could be long and painful.
The far-right leader, who had been the narrow favourite to win the 2027 French presidential election, will now be banned from running for public office for five years as part of a criminal conviction.
Marine Le Pen. Pic: AP
Marine Le Pen latest: ‘Catastrophic end of political career’
Le Pen, along with politicians and assistants from her National Rally (RN) party, has been found guilty of embezzlement – of taking millions of euros that were supposed to support work in the European Parliament and instead funnelling it to the party’s work elsewhere.
She will almost certainly appeal, but her ban has already come into effect.
Le Pen left the court in Paris shortly before her punishment was announced, heading towards her party’s headquarters for a meeting with its president, Jordan Bardella – the man most likely to take her place.
“Today, it is not just Marine Le Pen who is being condemned unjustifiably,” said Bardella. “It is French democracy that is being executed.”
Read more:
Who is 29-year-old far-right leader Jordan Bardella?
What it’s like to be trapped in rubble after Myanmar quake
RN president Jordan Bardella reacted to the verdict by saying French democracy was being ‘executed’. File pic: AP
Her downfall will be welcomed by some in France as a sign that politicians are not above the law.
Others, though, have already bemoaned the fact that a court has been given the power to disbar one of the nation’s most popular political leaders.
It hasn’t taken long for the court’s decision to be politicised. The Kremlin talked about European countries “trampling democratic norms”.
Hungarian Prime Minister Viktor Orban put out a short statement of support saying “Je Suis Marine”.
Assuming that Le Pen does not win her appeal, the favourite to win the 2027 election may now be Edouard Philippe, the former prime minister.
Bardella may benefit from being Le Pen’s anointed successor, but at 29, he is extremely youthful – a full decade younger than anyone who has ever won the presidency.
US
‘You can start with me’: Commander of NASA flight that was stranded in space for more than nine months says he is partly to blame
One of the astronauts who was stranded on the International Space Station (ISS) has said some of the blame for what went wrong lies with him.
Butch Wilmore and Suni Williams splashed down off the coast of Florida earlier this month after more than nine months onboard the ISS.
The two astronauts docked at the ISS on 5 June last year, expecting to be there for just eight days.
Instead, issues with Boeing’s long-awaited Starliner meant NASA decided to leave them waiting in orbit for months.
Suni Williams and Butch Wilmore. Pics: NASA
Please use Chrome browser for a more accessible video player
Splashdown! Butch and Suni’s space saga is over
Wilmore: ‘Start with me’ for blame
Mr Wilmore was asked at a NASA news conference on Monday evening where he lays the blame for the issues with Starliner, to which he said, “I’ll start with me”.
“There were issues, of course, with what happened with Starliner,” he added. “There were some issues, of course, that happened that prevented us from returning on Starliner.
“And I’ll start with me because there were questions that, as the commander of the spacecraft that I should have asked. And I did not, I didn’t know I needed to…
“Blame, that’s a term – I don’t like that term – certainly there’s responsibility throughout all the programmes, and certainly you can start with me.”
He then added that responsibility for the issues with returning home can be found “all throughout the chain”, including with NASA and Boeing.
Butch Wilmore and Suni Williams. Pic: NASA Johnson
Williams: ‘Life goes on up there’
Ms Williams also said she was somewhat surprised by the interest in their prolonged space mission.
“Life goes on up there. I mentioned today that we pivoted and became [ISS] crew members,” she said. “You maybe sort of get tunnel visioned into doing your job.
“We were just really focused on what we were doing… ‘the world doesn’t revolve around us but we revolve around it’.”
Ms Williams then said: “I don’t think we were aware to the degree [people were interested], pretty honoured and humbled by the fact of when we came home, it was like ‘wow there are a lot of people’.”
During their long wait in space, the two US navy veterans completed spacewalks, experiments and even helped sort out the plumbing onboard the ISS.
Please use Chrome browser for a more accessible video player
Stuck astronaut takes first spacewalk
Sky’s science and technology editor Tom Clarke asked the astronauts if the politics around their stay in the ISS made a difficult situation worse. Nick Hague – who also was onboard the Crew-9 flight – disagreed.
After explaining the timeline from the launch of SpaceX’s Falcon 9 to the return of the two astronauts, he said: “That was never in question the entire time.
“The politics don’t make it up there when we’re making operational decisions. There were a lot of options that were discussed, and the team on the ground… is gigantic, and everyone was working with a singular focus.”
Read more:
Stranded astronauts have just returned to a very different world
Nick Hague (left) said political changes in the US did not effect the mission. Pic: NASA
Astronauts more guarded answers show NASA giving politics a wide berth
The life of an astronaut is all about preparation.
And as Butch and Suni faced questions for the first back on Earth time about how their “stranding” in space was treated like an orbital political football – that really shone through.
The astronauts looked healthy and relaxed, despite having spent 35 times longer in space than they had expected to.
They were happy to answer questions about their safe return, the effects of their extended stay in space on their bodies.
But when it came to politics, the answers were much more guarded.
When I asked them about whether politics had made their difficult situation worse, it was quickly picked up, not by the pair themselves, but by astronaut Nick Hague, their mission commander for the ride back to Earth.
“The politics don’t make it up there when we’re making operational decisions,” he said.
“There were a lot of options discussed by the ground team, and everyone worked with singular focus on how do we end the Crew 9 mission at the right time and maintain the safety and the success of the space station mission.”
Their reluctance to address the political questions around the mission is understandable.
They have returned to a NASA bracing itself, like many federally funded organisations, for possible budget cuts and the mercurial decision-making of Donald Trump and his close ally Elon Musk.
Both men had suggested it was a political decision by the previous administration not to return them to Earth sooner.
Painting their already scheduled return as a “rescue mission” – despite presenting no evidence of the claim it put NASA in an embarrassing position.
It has been maintained all along that the plan was for the pair to return to Earth with the next rotation of the space station crew. Which is what subsequently happened.
But in the current political climate, and still awaiting the confirmation of a new leader for NASA’s administration, it’s giving politics a wide berth.
The crew were also asked about how weird it was to return to Earth in the SpaceX capsule – and about the welcome party of dolphins that swam around the vessel after splashdown.
“I can tell you that returning from space to Earth through the atmosphere inside of a 3000-degree fireball of plasma is weird, regardless of how you look at it,” Mr Wilmore said.
“It’s thrilling, it’s amazing, I remember thinking about the structure of the capsule,” as the Dragon Freedom capsule descended at pace toward our planet.
“And then the parachutes open and… it’s exhilarating.”
Mr Hague then remarked, “I had requested dolphins as kind of a joke”.
Please use Chrome browser for a more accessible video player
Dolphins greet returning astronauts
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway