Government Gunning for Cryptocurrency—Uses Ransomware as Pretext

The U.S. Treasury Department is telling cryptocurrency fans to stop breaking sanctions and laundering money. Washington’s warning’s worried many of a crackdown on decentralized finance (DeFi).

As if that wasn’t enough, the White House also just brokered a 30-nation agreement to regulate “virtual assets”—i.e., cryptocurrency. And all this is in the name of combating ransomware, which appears to have grossed $5.2 billion in suspicious payments. How very convenient.

Won’t somebody think of the children? In today’s SB Blogwatch, we point at palatable excuses for regulation.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Don’t touch my screen.

OFAC & FinCEN SARs Vs. DeFi

What’s the craic? Daphne Psaledakis reports—“U.S. Treasury puts crypto industry on notice”:

Illegal payments from ransomware attacks
Washington [has] put the cryptocurrency industry on alert about its role in combating ransomware attacks. … Suspected ransomware payments totaling $590 million were made in the first six months of this year, more than the $416 million reported for the whole of 2020.

Treasury told members of the crypto community they are responsible for making sure they do not “directly or indirectly” help facilitate deals prohibited by U.S. sanctions. … The new guidance also advised virtual currency exchanges to use geolocation tools to block access.

Hackers use ransomware to take down systems that control everything from hospital billing to manufacturing. They stop only after receiving hefty payments, typically in cryptocurrency.

How big is the problem? Nikhilesh De unpicks the alphabet soup—“Ransomware Payments in 2021 Already Dwarf Last Year’s”:

Global blacklist
The Financial Crimes Enforcement Network (FinCEN) … tied the reported amounts, which came through Suspicious Activity Reports (SARs), to a total of $5.2 billion in transactions that may be “potentially tied” to ransomware payments. … It was not immediately clear what amount of this total was comprised specifically of cryptocurrency transactions, versus more traditional payment methods.

The Treasury Department’s Office of Foreign Asset Control (OFAC) published a “sanctions compliance guidance” brochure for crypto businesses. … Last month, the Treasury Department added [Suex,] an over-the-counter crypto trading platform, to a global blacklist for the first time in its ongoing fight to tamp down on ransomware attacks and payments.

But what’s the rest of the world doing? Simon Sharwood says—“White House ransomware summit calls for virtual asset crackdown”:

Eliminate safe havens
[A] 30-nation gabfest convened under the auspices of the US National Security Council’s Counter-Ransomware Initiative has ended with agreement that increased regulation of virtual assets is required. … While the document never mentions cryptocurrencies, it’s plain they’re a target.

As incident after incident of ransomware infection requires payments in cryptocurrency, there is little reason to doubt this is a cryptocurrency crackdown. … Such actions are already under way: Ahead of the summit Australia announced a ransomware policy under which the nation promised to amend its criminal statutes. … Other initiatives promised in the statement include diplomatic efforts to build capacity that helps to disrupt ransomware operations, and work “to eliminate safe havens.”

And that’s not all. Rob Garver describes the response—“Crypto Learns to Play the DC Influence Game”:

Slew of new legislative and regulatory challenges
Facing a head-spinning array of new legislative and regulatory action … the crypto industry is reacting the way any sector flush with cash would: It’s throwing money at the problem. [But] The crypto industry is late to the game … crypto companies have largely avoided engagement with Washington.

The lack of engagement was partly down to the deep vein of libertarian sentiment running through the crypto world, and partly a result of wishful thinking. … The recognition that the industry can successfully wield influence on Capitol Hill comes at a time when crypto is facing a slew of new legislative and regulatory challenges [including] the concerns of the Biden administration that stablecoins and other digital assets are making it easier for the perpetrators of ransomware attacks to get away with their victims’ money.

tl;dr? Here’s alientech13’s neat precis:

No bitcoin, no ransomware.

Does this make sense? dmay34 vomits the Kool Aid:

Only useful for crime
Bitcoin only has value for crime. There is literally absolutely no value to Bitcoin whatsoever, other than easy and difficult to track ways for criminals to transfer money.

Bitcoin is only useful for crime. That’s it.

Yes, but will it actually work? Tony Burzio thinks not:

The real problem
Say they do succeed in stopping ransomware payments. Companies still use Windows. The bad guys will continue ransomware attacks until governments are forced to relent.

You can only put so many hospitals and power grids out of service and not relent. Not a single group is looking at the real problem: Windows.

Do you smell a rat? Chris G senses a mere pretext for regulating DeFi:

A handy stick
It appears the august assembly at the White House have few solid ideas other than the usual safe practices to combat ransomware so are using crypto regulation as a stick to try and beat the crims with. At the same time ransomware makes a handy stick to beat some regulation into crypto-coins, something that was always going to happen but now has a good reason for doing so.

Meanwhile, watch this space, thinks gweihir, who is no fan of imaginary digital money:

Running a complexly disguised advanced Ponzi-scheme variant like Bitcoin is currently legal—as is running a money laundering operation for it. But the law will catch up and quite a few people involved may go to jail.

And Finally:

The real problem with returning to the office

Previously in And Finally


You have been reading SB Blogwatch by Richi Jennings. Richi curates the best bloggy bits, finest forums, and weirdest websites … so you don’t have to. Hate mail may be directed to @RiCHi or [email protected]. Ask your doctor before reading. Your mileage may vary. E&OE. 30.

Image sauce: Thought Catalog (via Unsplash)

Richi Jennings

Richi Jennings is a foolish independent industry analyst, editor, and content strategist. A former developer and marketer, he’s also written or edited for Computerworld, Microsoft, Cisco, Micro Focus, HashiCorp, Ferris Research, Osterman Research, Orthogonal Thinking, Native Trust, Elgan Media, Petri, Cyren, Agari, Webroot, HP, HPE, NetApp on Forbes and CIO.com. Bizarrely, his ridiculous work has even won awards from the American Society of Business Publication Editors, ABM/Jesse H. Neal, and B2B Magazine.

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