Regulators And Industry Are Joining The Fight Against Ransomware
With an increasing number of people being forced to work from home, the data shows that ransomware attacks are at an all-time high, with the incidence of these incidents increasing by 45% in April 2021 alone, excluding April 2021, but some believe that the surge in ransomware attacks is closely related to the explosive growth of the cryptocurrency sector.
Amid the recent positive crypto market activity, news that U.S. regulators are actively investigating the link between cryptocurrencies and ransomware also seems to lighten sentiment somewhat.
As the adoption of digital assets continues to expand in the United States, it appears that lawmakers are trying to better understand how these services can be used for a variety of legal and illegal purposes. For example, the Ransom Disclosure Act, introduced on October 5th by Senator Elizabeth Warren and Representative Deborah Ross, requires victims of ransomware attacks to disclose information about all possible ransom payments to the Department of Homeland Security (DHS).
The aim, according to Warren and Ross, is to collect vital data on fiat and crypto payments that can ultimately be used by the relevant regulators to protect investors from cybercrime and restrict illegal financial activity in the US. In addition, the bill also seeks to examine the direct role of cryptocurrencies in ransomware attacks, an effort that would be led by the Department of Homeland Security.
Similarly, and only recently, Assistant Attorney General Lisa Monaco announced that the Justice Department has launched a new initiative called the National Cryptocurrency Enforcement Group, which aims to eradicate any projects that could allow criminals to launder money from their cryptocurrencies. Monaco is quoted as saying, “We want to strengthen our ability to disrupt the financial ecosystem that allows these criminals to thrive and benefit from what they do.
What is driving this wave?
To better understand why U.S. regulators are making such concerted efforts to crack down on crypto-related ransomware, Cointelegraph contacted Kadan Stadelmann, chief public officer, technology at open source blockchain solutions provider Komodo.
A quick look at the data available online, in his opinion, shows that all types – not just cryptocurrencies – ransomware attacks are becoming more common and adds, “Just look at the statistics. Palo Alto Networks reported last month that the average ransom payment for 2021 is now around $ 570,000 – 82% higher than the 2020 average of $ 312,000. 2020 is also much worse than 2019, ”he added:
“Reversing this trend requires a more mature regulatory landscape for the blockchain industry and improved cybersecurity in general over the next decade.”
When asked whether large expenditures for such research were justified, Stadlemann said that governments should not only introduce more measures, but should also provide more funds and resources. On the subject, he said that governments could first adopt guidelines to ensure that companies and anyone who operates critical infrastructure are better prepared for such events: “Together, proactive and reactive plans for cybersecurity will surely become the aftermath of ransomware attacks to reduce.” . “
Du Jun, co-founder of Huobi crypto exchange, shared relatively similar views, telling Cointelegraph that it is the responsibility of every government to prevent the fight against money laundering (AML) and the fight against terrorist financing (CFT) within its borders, and added that It is only natural for the US government to take regulatory action to regulate the crypto market. He added:
“It is very difficult to treat cryptocurrencies as a payment method because the responsibilities for compliance with AML / CFT are not clear and there is no central regulatory authority. These measures can pose challenges for crypto companies, but will be good for the ecosystem in the long run, protect investors from uncertainty, and promote a better business environment.
Finally, he stressed that beyond mere surveillance, the U.S. government should devote more resources to encouraging new business development in this area to make the country more competitive and attractive to crypto enthusiasts.
Taking a more numbers-driven approach to the problem, Marie Tatibouet, director of marketing at crypto exchange platform Gate.io, told Cointelegraph that by 2020, total ransom money paid by victims will reach nearly $ 350 million in cyberattacks payable in cryptocurrencies. With that number in mind, she added:
“That number will certainly continue to grow every year. So Warren’s “Ransom Disclosure Act” on paper makes sense. If you are a victim, you must disclose information about the payment of the ransom no later than 48 hours after the payment date.
However, she acknowledged that the main problem most people face with the U.S. government is that Biden and his company have severely undermined the crypto industry through the introduction of recent infrastructure laws as well as sanctions. “So it’s understandable why people are a little cautious about everything the government does,” added Tatibouet.
Sergey Zhdanov, executive director of EXMO digital currency trading platform, told Cointelegraph that the actions taken by the US confirm the fact that regulators are not trying to ban cryptocurrencies (in some ways) from China, but want to find a way through the digital Assets could be integrated into the traditional financial system. Then he continued:
“Introducing new effective methods to prevent the illegal use of cryptocurrencies and money laundering is an important step that will take the crypto industry to the next level of development.”
Does everyone benefit from increased regulation?
Hunain Naseer, chief editor at OKEx Insights, told Cointelegraph that regulatory efforts are being made around the world to provide a level of clarity in this area that can make it easier for investors. Enter this rapidly growing area with complete confidence. He takes the subject further by saying:
“The focus should be on initiatives like this to make online interactions and trades, including cryptocurrency transactions, more secure for everyone. These steps will also help regulators approve more crypto-based financial products for retail. “
Nischal Shetty, founder of the WazirX crypto exchange, told Cointelegraph that any regulatory steps to prosecute and eradicate criminal activity are always welcome, especially in a fast-paced industry like today.
In his view, the reason for such movements seems pretty clear to be found in the fact that governments ultimately want to protect consumers without stifling innovation, adding, “For cryptocurrency this is an even more positive sign as it proves that Innovations of digital assets are possible to flourish while ensuring that criminal activity is identified and eliminated. “
Additionally, blockchain analytics firm Chainalysis announced on Oct. 5 that it had facilitated the acquisition of cybercrime investigative firm Excygent for an undisclosed amount, suggesting that buying that merger will allow the two companies to work together and “ransomware – Disrupt operations “that may be active worldwide.
In the past, Chainalysis partnered with Excygent to seize cryptocurrencies related to the now defunct darknet Silk Road market and shut down the online portal line for terrorists and child abuse.
All in all, crypto-native blockchain analytics firms have received support not only from the U.S. government but a number of key private players, with CipherTrace being acquired by a mainstream company – in this case, MasterCard – earlier this year.
What is the future of ransomware criminals?
As the crypto landscape evolves and evolves, Chainalysis CEO Michael Gronager believes that tracking ransomware cash flows on the blockchain will be a tool for law enforcement agencies to prevent, analyze and remove all ransomware activity existing today Cointelegraph:
“Paradoxically, it can actually benefit investigators if bad guys choose to use crypto to commit crimes.”
In this context it should be mentioned that hackers have become aware that contrary to what people still say that cryptocurrencies are completely anonymous, it is actually extremely easy to trace individual transactions back to their owners, like all records and Transitions are managed on a blockchain.
Amid the recent spate of big hacking stories like those from Poly Network and SushiSwap, it’s also interesting that the incidents didn’t result in the platform or its users losing money when the …