Recent US Treasury Sanctions and their Impact on Crypto Access

Although the US Treasury has emphasized, on several occasions, that virtual currency activities are legal, it maintains that there is a need to punish bad actors who use these technologies for illicit gain and activities.

in 21 In September, the US Treasury announced that it would sanction a cryptocurrency exchange for its role in facilitating financial transactions for ransomware representatives.

Where facilitated the company SUEX For cryptocurrency exchange, a private company registered in the Czech Republic, transactions involving illegal proceeds, for at least eight variants of ransomware.

The Treasury Department indicated that more than 40% of the company's transaction history, associated with illegal actors.

And sanctions will inevitably mean that SUEX It will not be able to deal with US entities, and communicate with US citizens.

This punishment also represents the first action against the virtual currency exchange, after a series of ransomware and cyber attacks in a year 2020.

The ransom payments caused a total loss of 400 Million dollars per year 2020 Alone, four times the losses of ransomware attacks for a year 2019.

These new regulations became public with the recent attack on solar Windows / SolarWinds, which affected many government agencies including homeland security, state, commerce and the treasury.

It was a company FireEye For cyber security, they have discovered this breach and have reported an attack on their advanced systems.

Subsequently, confirmed Microsoft Also, it has found signs of malware in its own systems, and that the hack affects its customers as well.

It was necessary to disseminate this information, in order to discover and understand the extent of the attack.

With these backgrounds, the government maintains that its knowledge of cyber attacks and breaches was the first step toward targeted mitigation legislation.

But with the sanctions and tax implications of cryptocurrency in full force, it may sound pessimistic for investors and bankers looking to get into digital currency.

Fortunately, these new laws may do the opposite, as they will provide more clarity to the crypto landscape. Whereas, a more regulated trading environment may result in a higher approval rating for blockchain completely.

Biden's campaign against ransomware attacks

This spring, the Biden administration accelerated its campaign to target and respond to high-profile ransomware attacks, including several that trace their origins to Russia.

The US Treasury emphasized that the new sanctions are not intended to cripple the cryptocurrency scene in the United States; Instead, it will serve as a warning to cryptocurrency exchanges, to improve their compliance and avoid illicit transactions.

With this new classification, all properties are blocked SUEX and interests in real estate that are subject to the jurisdiction of the United States.

Furthermore, under this new law, US citizens are generally prohibited from engaging in any transactions with any sanctioned entities.

Financial institutions in the United States that do business with these sanctioned entities will be sanctioned, and they may also be sanctioned.

The warning also states that a US entity that violates this designation will be punished if it makes payments to a sanctioned actor, regardless of whether it is aware that the perpetrator has been sanctioned.

A new advisory paper has also been released from the US Treasury, which includes guidance for companies to deal with ransomware attacks.

The Cyber ​​Incident Notification Act that was passed in response to an attack on SolarWinds From federal agencies, federal contractors, and critical infrastructure companies, a ransomware attack is reported to the Department of Homeland Security when a breach is determined.

On the other hand, this legislation gives companies immunity when they report a violation, as the Department of Homeland Security will be required to anonymize personally identifiable information.

This means that companies can easily report incidents, and the government can act efficiently.

The Treasury has also urged companies to pay a ransom in the event of an attack or breach, as it may encourage attackers to target other organizations, and has identified reporting the attack and cooperating with law enforcement as the best way to handle the situation.

In a statement, the Deputy Treasury Secretary said that the operations of cryptocurrency exchange platforms such as… Suex "Essential to attackers' ability to profit from ransomware attackers".

Thus, regulating such exchanges may reduce the risk and frequency of ransomware attacks, and improve the security of exchange users.

What does that mean for cryptocurrencies?

What makes crypto revolutionary is its accessibility, and such sanctions, on the face of it, limit agencies that promote the mission of free trade in digital currency and blockchain.

But with the increasing standardization of exchanges, it may become easier for bodies like SUEX to exist, and hopefully in safer forms.

The lack of regulation on cryptocurrencies can lead to fraud and increase the risk of data breaches, making it a more risky environment for cryptocurrency investors and users.

Earlier this year, the head of the Securities Commission warned Gerry Gensler SEC Although the new crypto asset class is riddled with fraud and abuse in certain applications, there is a dire need for a comprehensive regulatory framework for cryptocurrencies, as the industry is on the cusp of boom.

While libertarian crypto enthusiasts may not welcome stricter regulations, regulation is sorely needed to bring the industry into widespread adoption.

Bills passed by the US House of Representatives

There are some bills passed by the House, and waiting for a green signal from the Senate.

That includes Elimination of Barriers to Innovation Law 2021, which requires from SEC And CFTC Create a digital asset working group, in order to ensure collaboration between regulators and the private sector, to encourage innovation.

Consumer Safety Technology Act It is also a combination of two bills related to technology Blockchain, and requires the Secretary of Commerce and the Federal Trade Commission, to examine the use of technology blockchain digital codes, and their reporting.

Ultimately, the regulations will be very beneficial to the crypto industry, as it will provide a safety net for businesses and customers.

Stricter regulation may encourage crypto skeptics to invest in the market, as they have always been reluctant due to the largely unregulated nature of the cryptocurrency industry and Blockchain.

The Biden administration is moving in the right direction to regulate these industries, in order to provide better safeguards to customers against fraud and data breaches.

As these new regulations bring the crypto industry one step closer to a unified regulatory framework, however, comprehensive regulation is still needed.