Right in Front of Our Eyes: An Open-Source Assessment of Immediate Threats to National Security Revealed by the Perspective of a Financial Professional

10 Pages Posted: 18 Nov 2021 Last revised: 14 Apr 2022

See all articles by Melissa Murphy

Melissa Murphy

Massachusetts Institute of Technology, Sloan School of Management

Date Written: July 12, 2021

Abstract

Swaps are the monster of illicit financing once solely supported by Hydra–like cryptocurrencies and the informal value transfer system since their complexity and opaque private market provide ideal cover for money laundering and proliferation financing. 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, while complacency birthed the refusal to innovate and a stale financial system. The “Framework for Global Electronic Commerce” propelled the international community towards self–regulation before failing to rectify legislative deficiencies allowed significant vulnerabilities to persist. Emerging economies fighting for liquidity in the absence of swap lines and attempting to control inflation of their devalued currency gifted Hawala with the greatest 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 a mastery of the inner workings required to develop a powerful counterattack in today's cyber pearl harbor and saliently own responsibility 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

Suggested Citation

Murphy, Melissa, Right in Front of Our Eyes: An Open-Source Assessment of Immediate Threats to National Security Revealed by the Perspective of a Financial Professional (July 12, 2021). University of Massachusetts Law Review, Forthcoming, Harvard Business Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3954732 or http://dx.doi.org/10.2139/ssrn.3954732

Melissa Murphy (Contact Author)

Massachusetts Institute of Technology, Sloan School of Management ( email )

Cambridge, MA 02139
United States

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