The government and industry officials are currently being faced with surging cases of ransomware, a type of cyber crime wherein attackers would enrcypt the target's network and demand for financial ransom for the decryption key.
Both the industry and government officials are planning to pass a stricter cryptocurrency regulation as they see it as the key to combat the ransomware issue.
Cryptocurrency Regulation for Ransomware Cases
In a report by NBC News, the panel of experts is expected to call for more aggressive tracking of cryptocurrencies, including Bitcoin, which is among the most popular cryptocurrencies, thus far.
Cryptocurrencies are deemed as the "lifeblood" of ransomware operators and other online criminals who face little risk of prosecution, even when the digital currency has become more mainstream, and with investors looking at it as a great source of revenue.
According to CNBC, ransomware gangs collected more than $350 million in 2020 alone, which is three times more than what they collected in 2019.
Companies, government agencies, hospitals, and school systems are among the victims of ransomware groups, some of which U.S officials say have friendly relations with nation-states, including Russia and North Korea.
With that, the central bank regulators and financial crime investigators around the world are debating if and how cryptocurrencies should be regulated. The new rules proposed by the public-private panel, some of which would need Congressional action, are mostly aimed at piercing the anonymity of cryptocurrency transaction.
If implemented, they could temper enthusiasm among those who see the cryptocurrencies as a refuge from national monetary policies and government oversight of people's financial activities, having increased past $1 trillion in capitalization.
The task force included representatives from the FBI and the United States Secret Service, as well as major tech and security companies.
It will recommend additional steps like extending the know-your-customer regulations to currency exchanges, imposing tougher licensing requirements for those processing cryptocurrency, and extending money-laundering rules to facilities such as kiosks for converting currency.
This will also call for the creation of a special team of experts within the Justice Department to facilitate seizures of cryptocurrency.
According to federal investigators, a proposal to register accounts would be helpful for identifying drug smugglers, terrorists, human traffickers, ransomware groups, and more.
Governments are already using the blockchain ledger that documents all bitcoin transactions to bring charges, as per Venture Beat.
Last week, authorities arrested a man in Los Angeles who is accused of laundering more than $300 million through a service that combines transactions from different cryptocurrency wallets to obscure who is paying whom.
Records from the U.S Marshals Service show that more than $150 million in crypto assets were seized in 2020 and offered to the public at auction.
Last week, the Marshals Service signed a $4.5 million deal with BitGo, a California-based exchange, to hold and sell more forfeited cryptocurrency.
However, many of the exchange, which conduct the critical operation of turning cryptocurrency into dollars or other widely accepted currencies, are in countries outside the reach of U.S regulators.
The Institute for Security and Technology's Reiner said that international cooperation will be critical, and that pressure could be brought by allies with similar regulations, which could help push exchanges into countries where Americans will hesitate to send their funds.
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Written by Sophie Webster