US Regulators Scrutinizing the Cryptocurrency Space

The mainstream media has experienced massive crypto coverage that indicates regulators’ worries about the crypto market in the past few days. Their concerns revolve around the lack of protection over investors’ money. And this runs up to 2 trillion U.S. dollars while being associated with financial risks.

With this, we saw how federal agencies are going after individuals and corporations involved in cryptocurrency cases related to bribery, intellectual property espionage, ransomware attacks, violation of sanction rules, and tax evasion.

A Financial Crimes Enforcement Network report revealed that most of the threats witnessed in the U.S. financial sector are related to ransomware attacks. This occurred due to a 30% increase by June 2021 from what we saw in 2020.

The present U.S. administration (Biden Administration) is considering charging different federal agencies to study the crypto industry. Hence, they will recommend essential areas associated with economic innovation, regulatory acts in finance, and national security. As a result, this will help monitor agencies’ works on crypto across the executive branch.

The “Pandora Papers” Mystery

The “Pandora Papers” released by the International Consortium of Investigative Journalists revealed about 12 million papers from legal agencies and other organizations exposing anonymous owners of offshore companies. These companies are about twenty-nine thousand, concealing about 32 trillion U.S. dollars’ worth of assets. These are used to evade taxes across the world.

As revealed by the released papers, celebrities, criminals from the underworld, and political leaders from more than 200 countries are the recognized companies’ owners. This release has led to a corruption and tax evasion investigation. And it is hitting different layers of government authorities globally. On the other hand, the World Economic Forum believes that blockchain can dissolve corruption within the government.

The Treasury Department’s Probe

As part of the government’s endeavor to dissolve ransomware attacks and demobilize criminal networks across the nation, there is a campaign to probe cryptocurrency exchanges involved in illegal activities of laundering ransoms obtained from victims. One of those exchanges probed was Suex. The Office of Foreign Assets and Control (OFAC) went after it to investigate its participation in the laundering.

The U.S. government is leveraging this to establish its goals of providing cybersecurity for firms in the private sector. Likewise, this attempt is to enhance how ransomware incidents and payments are reported to government agencies.

Most significantly, agencies such as Treasury Department and law enforcement departments are looking critically into cryptocurrencies and exchanges because they are associated with these illegal activities. As part of the follow-up by the U.S. government, OFAC published an advisory update stating the U.S. position on cyber ransoms and mitigation measures.

This updated advisory encouraged firms or individuals who are victims of ransomware attacks to report to the appropriate government agencies and cooperate with government officials to conduct a mitigation process and receive self-closure credit. Self-disclosure credit will protect victims should there be a sanctioning case.

Recognizing the financial risk associated with ransomware attacks and money laundering under the disguise of crypto, nations that participated in the G7 meeting in June vowed to work collectively and address the risk associated with digital currency as it escalates.

Locked Between Crypto and Intel Espionage

While the fight against ransomware is on the hike, the government is fighting another war-related to intellectual espionage. One of the recent cases came with Virgil Griffith – an Ethereum developer—pleading guilty to a violation of intellectual property espionage.

He accepted that he was guilty of violating the International Emergency Economic Power Act that prevented U.S. citizens from selling technology and intellectual property to communist nations. He revealed that he did this while delivering a presentation at a North Korean Conference—a blockchain and crypto conference—in 2019.

Another reported case is that of Jonathan Toebbe. Jonathan is a U.S. Navy nuclear engineer with top-secret security clearance and access to top-level atomic secrets. He was caught while trying to sell nuclear information for crypto to a supposed foreign government representative.

While all these are going on, the U.S. government accused China of leveraging the Microsoft Exchange Server attacks stating that the Chinese government used black hat hackers for the attacks. Likewise, the U.S. warned the Chinese government of penetrating its department to steal intellectual property.


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