LONDON: The White House is considering how it can regulate cryptocurrencies so they are not used to facilitate ransomware attacks and other cybercrime.
The National Security Council and the National Economic Council, forums through which the president consults and makes policy decisions, are working with other agencies to “ensure that cryptocurrency and other digital assets are not used to prop up bad actors,” a White House spokeswoman said on Saturday.
The oversight could include an executive order, Bloomberg News reported on Thursday, although that was not confirmed by the spokeswoman.
Cyber criminals often demand that ransoms are paid in cryptocurrencies, so they are harder to trace. There were an estimated 304 million ransomware attacks globally in 2020, with 68.5 percent of companies the subject of an attack, according to data from Statistica.
The FBI was informed of almost 2,500 ransomware attacks last year, which cost the victims about $29.1 million, up more than 200 percent from the previous year.
It is not the first rumblings of firmer action from the US. In September, the Treasury Department’s Office of Foreign Assets Control sanctioned a crypto exchange in a first as part of its response to a spate of ransomware attacks.
However, there are limits to what the White House, or anyone else, can do to stop cryptocurrencies being used for cybercrime.
Despite rumors to the contrary, cryptocurrencies are more traceable than cash. Every transaction involving a crypto asset is stored on a public blockchain. However, the identity of those carrying out the transactions is not always clear.
Scammers tend to move bitcoins or their crypto of choice through hundreds or thousands of transactions and may control dozens of wallets, making it a huge job for law enforcement to track. They even use software called a “mixer” to break it up into many smaller transactions and complicate tracing it even further.
So, if there is a really large ransom that the FBI, or another national law enforcement agency, wants to track down, they may be able to do it after investing a lot of time and expertise, but smaller amounts will usually fall between the cracks.
What the White House may be able to do is improve know-your-customer rules for exchanges and wallets that are allowed to operate in their jurisdiction. Banks have to do this kind of thing before taking on new customers; if cryptocurrency intermediaries were forced to do the same, it would make it harder for cyber criminals to hide their ill-gotten gains. But not impossible.