Cyber attackers retain hostage data and computer systems in American businesses, schools and hospitals until they receive digital payments from victims, making cryptocurrencies a key element of the ransomware gang’s business model.
Congress is currently working to understand whether cryptocurrencies are driving the rapid spread of ransomware attacks and is trying to impose new rules on the digital currency business.
Oklahoma Republican Senator James Lankford said the Byden administration’s handling of cryptocurrencies is intertwined, involving five or more different agencies with jurisdiction over cryptocurrency issues, causing confusion. rice field.
“This is a complex mess for businesses, hospitals, and at worst, even if there is a ransomware attack,” Rankford said in a Homeland Security Commission hearing on Tuesday. “And now they are being attacked by these various federal agencies calling them for information and details about this. We need a single source. We handle it. I know I’m in the middle of doing it. “
Cryptocurrency companies and exchanges can also help catch cyber attacks, said Jacqueline Burns Koven, Head of Cyber Threat Intelligence at blockchain financial services firm Chainalysis.
“It’s much easier to investigate cases involving the illegal use of cryptocurrencies than other payment methods,” Coven told lawmakers. “For example, by identifying illegal actor cryptocurrency wallets from ransom payments, law enforcement agencies are not only cashing out, but also about the network of accomplices and malicious tools that underpin threat actor campaigns. You can also get insights. “
Coven said traditional financial crime investigations investigating bank accounts are resource-intensive, time-consuming, require subpoenas, and return less information than investigating digital ledgers and transactions. ..
Some lawmakers were skeptical about the usefulness of cryptocurrencies outside of criminal enterprises.
“It’s a criminal who uses this currency,” said Senator Gary Peters of the Democratic Party of Michigan. “In addition to speculators, it’s the criminals who appear to be using cryptography.”
Cryptocurrency analysts disagree. Mr. Coven said that legitimate transactions are conducted outside of criminal activity, and that the businesses and services that people do frequently adopt the practice of accepting cryptocurrencies.
Cryptocurrency regulations are not guaranteed, but there are several different routes that Congress may choose to pursue.
For example, the Know Your Customer or KYC requirements for financial services professionals to get more information about their clients can be applied to the cryptocurrency business. It can force cryptocurrency entities to make additional disclosures to combat money laundering.
Senator Maggie Hassan of the Democratic Party of New Hampshire said the IRS is recommending increasing the KYC requirements for the cryptocurrency business.
Other lawmakers are also paying attention to the new cryptocurrency law.
Senator Kirsten Gillibrand of the Democratic Party of New York and Senator Cynthia Lummis of the Republican Party of Wyoming have introduced responsible financial innovation legislation to create a new regulatory framework for digital assets.
The Biden administration was not waiting for Congress to set the agenda for new rules governing cryptocurrencies. Last year, the Treasury announced sanctions against SUEX, a cryptocurrency exchange operating in Russia, for facilitating payments to cybercriminals.
After Russia invaded Ukraine, the Biden administration imposed additional sanctions affecting Russians and Russian officials. Last month, Rob Joyce, director of cybersecurity at the National Security Agency, suggested that the cumulative effects of sanctions have reduced ransomware attackers. Report..
Private cybersecurity experts are less confident that sanctions are reducing ransomware attacks.
“Ransomware cases involving the US public sector appear to be declining this year, but that’s it,” Emsisoft threat analyst Brett Kalaw said on Twitter last week.
“And that’s a problem,” he said in another tweet. “If policy makers cannot measure the impact of their policies, how do they know if they are working?”