Inca Digital Wins DARPA Contract to Map Crypto Contagion Risk

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Illustration: Eniola Odetunde/Axios

There are many theories out there that say crypto could screw it all up and now the US has given a company the go-ahead to study how.

Why it matters: The same government agency credited with developing life-changing technologies like GPS, Siri and the Internet, is deepening its understanding of digital assets.

Leading the news: The Defense Advanced Research Projects Agency (DARPA) has awarded a research contract to crypto market data provider Inca Digital, building on a relationship that began last year.

This is part of DARPA’s small business research effort, Mapping the Impact of Digital Financial Assets (MIDFA), which explores advanced methods to identify and analyze activities involving distributed ledgers, cryptography, and other digital assets.

What they say: Although DARPA is not involved in forensics and has no law enforcement authority, part of its mission “is to prevent strategic surprise, and Situational awareness is critical to national security,” Mark Flood, DARPA program director, tells Axios.

“A beneficial side effect is a better understanding of the behavior of illicit actors,” he said.

Between the Lines: Any potential threat that crypto could pose to the US financial system also has national security implications.

“Understanding the complexities, relationships, and interactions between the myriad of actors, entities, and geographies can help shed light on the potential impacts of stressors, including those intentionally generated by nations or groups opponents,” adds Flood.

Zooming In: Understanding the intersection of cyber threats to traditional finance and cryptography is what Anita Nikolich, Inca Project Manager and Director of Research and Technology Innovation at the University of Illinois.

“People talk about contagion, it’s actually very theoretical,” Nikolich said, “What we’re trying to do is show if there is and where.”

For example, “Everyone uses [Amazon Web Services (AWS)]Nikolich said both traditional finance companies and digital asset companies.

“From a national security perspective: were physically in places where, if [someone] took it off, [they] could have an impact.” “Crypto digital assets are no longer a standalone vertical. They depend on banking services, the internet and that’s what people should be alerted to: that this is a unique and ubiquitous combined system in daily services. »

Inca aims to create a taxonomy of risk, by studying indicators of compromise.

The language of token drops and airdrops. “Words that were thrown around a few years ago could have been ‘quick money’ now it’s ‘I have a new project’, a softer sell,” says Nikolich, who in his life no inca studies misinformation and social engineering. Demographics of romance scams. Young, tech-savvy people were the first targets, now these scammers are going after the elderly.

The Bottom Line: “Our goal is that the tools developed under MIDFA will help industry and government maintain safe and secure markets,” Flood said.

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