Donald Trump’s potential return to the White House brings the prospect of sweeping policy shifts, including a surprising promise: fostering a cryptocurrency-friendly presidency. For crypto enthusiasts and investors, this signals a potential loosening of regulations that have stifled innovation. Yet, beneath the surface, this vision carries darker implications, with experts warning that extremists and terrorist groups could become unintended beneficiaries.

Jessica Davis, a former intelligence analyst and president of Insight Threat Intelligence, cautions, “Any loosening of regulations on crypto—or even the perception of it—could significantly bolster extremists’ ability to use crypto for funding.” While legitimate integration of cryptocurrency into the financial system can enhance innovation, inadequate regulatory frameworks risk enabling bad actors.

Already, groups like The Base—a neo-Nazi terrorist organization under FBI scrutiny—have shown how crypto can fund their activities. On election day, the group solicited cryptocurrency donations to finance paramilitary training, listing a disturbing shopping list of military-grade equipment. While its Bitcoin wallet remains inactive, a Monero address—known for its enhanced privacy features—has been circulated to evade law enforcement.

This isn’t an isolated case. From Hamas to American neo-Nazi groups like Blood Tribe, extremists have long recognized the value of cryptocurrencies for anonymous fundraising. Such transactions bypass traditional financial oversight, making it harder to track and disrupt illicit activities.

The Biden administration has taken a hardline stance on cryptocurrency, citing national security concerns. Agencies like the SEC and the Treasury Department have aggressively pursued crypto exchanges for alleged violations of anti-money laundering laws. In contrast, Trump’s campaign embraced crypto, even launching a personal cryptocurrency venture. Howard Lutnick, a vocal crypto advocate, has already been named his Commerce Secretary pick, signaling a sharp policy pivot.

Critics, including Mark Dwyer of the ADL, argue that the private sector has also failed to act decisively against extremist financing in the crypto space. “Without proper regulatory oversight, extremists will continue to exploit these gaps,” he warned.

The appeal of cryptocurrencies like Monero, with its untraceable transactions, is undeniable among extremists. Groups have openly advised followers on how to use these tools to avoid detection, often pairing their fundraising with ideological messaging. A 2023 Telegram post by Atomwaffen Division affiliates, for example, outlined specific instructions for donors to circumvent scrutiny.

The stakes are high. Looser crypto regulations could unlock unprecedented innovation but also create a playground for those looking to undermine security. As the crypto boom under Trump’s campaign promises continues, policymakers face a critical challenge: balancing the benefits of a decentralized financial future with the urgent need to prevent its misuse.

The question remains: Can a Trump-led administration strike that balance, or will the allure of deregulation open Pandora’s box?