Right in Front of Our Eyes: An Open-Source Financial Assessment for Threats to National Security

Abstract

Swaps are the monster of illicit financing once solely supported by Hydra–like cryptocurrencies and the informal value transfer system. Their complexity and opaque private market provide ideal cover for money laundering and proliferation financing beyond the reach of detection from lay professionals. The autonomy granted to Wall Street and their darling derivatives caused the worst economic contraction in modern history, but their prevailing sovereignty bore the now flagrant risk that pales in comparison before affixing a parallel financial system. Secretary of State Hillary Clinton and Secretary of the Treasury Timothy Geithner relinquished neutrality of SWIFT in the absence of alternative strategies for dealing with Tehran, but the power afforded by controlling financial networks is now greatly diminished. Despite their disappearing efficacy, sanctions remain essential to counterterrorism operations. The false sense of control birthed complacency and the refusal to innovate, allowing significant vulnerabilities to persist. The "Framework for Global Electronic Commerce" propelled the international community towards self–regulation before failing to rectify legislative deficiencies within the stale financial system. Emerging economies fighting for liquidity in the absence of swap lines and attempting to control inflation of their devalued currency gifted Hawala with the most significant vehicle for laundering money, swaps, the same sophisticated financial product the banks have used to launder money for the last 50 years. Sanctions merged the idol hands of solitude with revenge, and we gave our denied opponents valuable time studying our unaltered system for flaws to exploit. The Capital Markets Hawala network is a mocking distraction to years of greed from financial institutions, mirroring the vehicles of fraud and the system that created and enables its abuse. Swaps' architecture, mechanics, and behavior show how emerging technology merely replicates the existing network, preserving our role as creators. As such, we distinctly possess the expertise to develop a powerful counterattack in today's cyber pearl harbor and are responsible for its overall success or devastating failure.

Keywords: securities, cryptocurrency, geopolitical dynamics, economic stability, future of banking, threat financing, money laundering, terrorist financing, open door, illicit banking, financial inclusion

JEL Classification: C00, C1, C13, C3, C10, C20, C30, C40, C50, C60, F68, F51, F52, F31, F21, F23, F35, F33, F34, K00