With the increased usage of cryptocurrency, cybersecurity specialists project an increase in crimes that involve the asset in 2021. For example, a recent Twitter hack compromised several high-profile accounts, including those of Jeff Bezos, President Barack Obama and Kanye West, leading to a subsequent scam where the hackers defrauded users of $140,000 in Bitcoin. While the perpetrators were ultimately caught, that hack shows the relative ease in which criminal use of cryptocurrency can pose significant threats to public safety and national security.
Cryptocurrency has several legitimate uses, and holds significant potential for efficient transfers of funds worldwide, facilitating micropayments with lower transaction costs and providing new opportunities for emerging markets without access to traditional banking means. However, criminals are taking advantage of the inherent anonymity of the currency to prevent authorities from tracing funds in ransomware attacks and other illicit behavior.
To combat these risks, the Department of Justice’s Cyber-Digital Task Force issued guidance to help organizations understand cryptocurrency challenges and federal enforcement priorities, and regulatory agencies including FinCEN, the SEC and the CFTC have developed statutes and regulations to govern virtual asset-related activities. In addition, with cybercrimes on the rise, many regulatory agencies have issued guidance to help financial institutions be proactive with their cryptocurrency compliance programs.
Read our white paper to learn more about cryptocurrency, its growing popularity and its increasing risks. The unique nature of cryptocurrency makes it attractive for both legitimate and criminal use, and you must monitor the currency’s evolving environment—along with regulatory and enforcement advances—to ensure any emerging challenges are managed appropriately.