U.S. Officials Eye Ransomware Payments for Sanctions

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In Brief
  • The Biden administration plans a disruption of the digital financial backing which allows for cyberattacks.

  • Future sanctions will make it difficult for hackers to use digital currencies.

  • The U.S. government continues a tightened grip on all things crypto.

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The current U.S. administration lays out plans for more restrictive sanctions surrounding ransomware payments in a cybersecurity enhancement effort. 

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The U.S. Treasury Department prepares new sanctions against hackers and the use of digital currencies for ransomware payments. As soon as next week, the sanctions could be rolled out. In addition, the government plans a new series of guidelines for businesses on the risks of ransomware payments. 

In a similar vein, the administration plans new anti-money-laundering and terror finance regulations later this year. These moves, despite their potentially positive impact for cybersecurity, are the latest in the administration’s regulation efforts of digital finance.

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However, crypto ransomware regulations have been on the table this entire year. Back in April the Department of Justice called the situation a ransomware “epidemic”. During this time officials already hinted at financial regulations as a means of combating the issue. 

After the attack on JBS which prompted initial queries over ransomware attacks the Colonial Pipeline faced a heist. This incident saw the loss of $2.3 million in bitcoin. 

For the Treasury to successfully combat their cyberspace foes, they would need to focus on digital wallets which receive ransom transactions. Along with the wallets, the crypto platforms which help facilitate those transactions would be under surveillance as well. 

Increased regulations all around

Despite these new regulations imposed under the need for additional cybersecurity, U.S. regulators have the entire cryptoverse in view. In August the Senate passed a bipartisan tax infrastructure bill with a broad definition of the term “broker”. 

Thus far the bill is unchanged despite backlash from the crypto community. Gensler on the other hand claims crypto platforms need regulation for survival. He also singled out the DeFi sector and said those within this area are not exempt from federal surveillance. 

This past week the House Democrats brought  new crypto tax regulations to the table. However, these closed the “wash sale” loophole for crypto investors who avoid capital gains tax. Although some of these regulations do benefit users and larger entities from fraud and attacks, there are major downsides. The increased governmental presence in the decentralized space has those native to the space worried if decentralization is at stake. 

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Savannah Fortis is a multimedia journalist covering stories at the intersection culture, international relations, and technology. Through her travels she was introduced to the crypto-community back in 2017 and has been interacting with the space since.

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