Namaste Yogis. Welcome to the Blockchain & AI Forum, where your technology questions are answered! As a bonus, a proverb is also included. Today’s question, comes from Kirk in Chicago and he wants to know if the U.S. Department of Defense (DoD)is fighting global money laundering?
WHAT IS DARPA
Kirk, you came to the right place. Yes, DoD is fighting global money laundering. However, not with tanks and rifles, missiles, etc. as you might expect from a military organization. Nope, the DoD says it has enlisted in the battle using advanced technology, including artificial intelligence! I’ll explain shortly what this is all about but first let’s take a moment to understand what office within the DoD will lead the effort. It’s a fascinating agency with a stellar record of accomplishments; its acronym is DARPA. The formal name is the Defense Advanced Research Projects Agency. If you like the internet, GPS, stealth technology, and autonomous systems you can thank DARPA as it was the driving force behind all of those innovations, plus numerous others, and perhaps even more that have been kept secret from the public as a matter of national security. Generally, DARPA is known as the office with DoD responsible for developing technologies for military use. Why DARPA is involved in global money laundering begs the question as opposed to leaving the job to the the U.S. Treasury? But for now, let’s put that aside and examine the recent DARPA announcement regarding anti-money laundering.
DARPA ANTI-MONEY INITIATIVE ANNOUCEMENT
According to a January 23rd, announcement by DARPA, it (DARPA) wants to eliminate global money laundering by replacing the current manual, reactive, and expensive analytic practices with agile, algorithmic methods. Good idea, but isn’t that the job of the U.S. Treasury and if it is why would DARPA be involved? In other words, what is the nexus between money laundering and DARPA’s mission? Well, the answer given by DARPA is “… U.S. adversaries launder billions of U.S. dollars yearly and half of North Korea’s nuclear program is backed by laundered funds. Money laundering finances our adversaries’ weapons programs, global terrorism, and the illicit drug trade, all of which threaten U.S. national security”. A stretch but okayyyyy…
WHAT PROBLEMS DOES DARPA INTEND TO SOLVE
DARPA is facing two challenges not one. The first is the global money laundering issue. Essentially, DARPA states that money laundering schemes often evade detection and disruption, because anti-money laundering (AML) efforts today rely on manual analysis of large amounts of data and are limited by finite resources and human cognitive processing speed. The second problem requires the reader to read between the lines. What is it? Essentially, the financial industry writ large and the U.S. Treasury have been unable or unwilling to invest in the technology to combat the problem, hence DARPA will step in because the illicit funds are not just a finance issue—they are a national security concern. What is the DARPA solution?
DARPA SOLUTION—APPLICATION OF ADVANCED TECHNOLOGY
In their announcement, DARPA says it seeks new technological ideas that “… preserve privacy while setting a course to end to our adversaries’ financial warfare”. The goal is to develop rapid graph-search algorithms to sift through financial transactions graphs for suspicious patterns and learn new patterns to anticipate future activities. Program success will depend on algorithms’ ability to learn a precise representation of how bad actors move money around the world without sharing sensitive data.” A tall order indeed. When it comes to moving illicit money around the world they may want to read the Panama Papers as a manual.
DARPA envisions creating technologies that identify patterns of illicit financial behavior in a concise, machine-readable format that are also easily understood by human analysts. Resulting algorithms would be able to search financial databases that matches patterns of illicit behavior, alerting to the likely presence of money laundering without directly sharing sensitive financial data. DARPA does acknowledge that developing technology that enables information exchange while safeguarding Americans’ privacy will be a challenge. What an understatement!
Companies interested in submitting bids should attend the DARPA bidders conference on February 20, 2025 in Arlington, VA. https://sam.gov/opp/22562059531b4979814b8b9fcd03e3ec/view.
Time to go but first a proverb from Mongolia: “… if the source is muddy, the end will be muddy too.”
Until next time,
Yogi Nelson
Blockchain & AI Forum 