Ransomware Attacks Could Mean a Big Crackdown on Bitcoin

Recent cyber attacks have prompted calls for regulation that could send a big chill across the crypto world.

Jun 30 2021, 3:18pm


Want the best of VICE News straight to your inbox? Sign up here.

Cyber crooks keep holding huge American companies hostage for hundreds of millions in cryptocurrency. And attempts to stop them could have big implications for crypto itself. 

That’s because the wave of cyber attacks is prompting calls for new regulation of cryptocurrency—an asset originally designed to exist beyond the reach of governments or central banks. 

Advertisement

Ransomware typically involves locking up or stealing a victim’s files, and then decrypting them when the ransom is paid or threatening to delete the files if it isn’t. And if a victim doesn’t pay up, the attacker will start leaking those files until they get paid. 

The frequency of ransomware attacks appears to be accelerating, although trustworthy figures are hard to come by because many companies still don’t want to go public with their ransomware difficulties. 

The attacks have begun to impact companies that factor into everyday Americans’ lives. 

In May, hackers targeted a company called Colonial Pipeline, which handles nearly half the gasoline and jet fuel supply to the East Coast. The attackers didn’t target Colonial’s operations, but the company said it shut down the pipeline out of fear the hack would spread—prompting gas-price hikes as drivers raced to fill their tanks. 

President Joe Biden’s Department of Justice elevated investigations of ransomware to a similar priority as terrorism after the Colonial attack. But the hackers are showing no sign of slowing down, and officials have few tools to stop them. 


That dynamic is spurring a debate over new regulations. The Biden administration has already proposed making businesses report any crypto transactions over $10,000 to the IRS. And a coalition of U.S. government agencies released a report this spring calling for tighter crypto regulations to help track and disrupt ransom payments. 

Advertisement

Most experts say an outright ban on crypto wouldn’t work, and would only push the tech underground. 

But crypto industry insiders say the dangers posed by potential future regulation are real.

“Cryptocurrency markets are not properly considering legal risk,” the investment firm Miller Tabak warned its clients earlier this year. 

Heightened regulation poses a challenge to one of the factors that’s helped make crypto so popular: it’s relative independence from government oversight. 

And while all this is happening, governments around the world are also racing to develop their own digital currencies. 

China is already testing a cyber-yuan. The U.S. federal reserve will release a plan this summer on developing its own so-called Central Bank Digital Currency—or CBDC. 

And a world of fully-regulated cryptocurrency wouldn’t be the crypto world we know today. It might be the start of a new era—one in which something that began as an experiment in taking power away from governments, ends up getting co-opted by governments.


Tagged:

Bitcoin, Dogecoin, ransomware, cryptocurrency regulation, Colonial Pipeline, The Couch Report

More
like this
Swedish Officials Call For EU-Wide Ban On ‘Proof of Work’ Crypto Mining
FYI: ‘Square’ Is Now ‘Block,’ Jack Dorsey Is Now Fully a Crypto Laser Eyes Guy
Bitcoin Just Hit an All-Time High Price: $67,000
New NYC Mayor Eric Adams Wants the City to Have Its Own Cryptocurrency
Received Some Random Cryptocurrency? It Might Be a Phishing Scam.
'Financial Colonialism': A Bitcoin Mine in Navajo Nation Flares Tensions
Bitcoin's Price Crashed 87% on a Major Exchange Thanks to a Bug
India Has Millions of Crypto Investors. A Proposed Ban Has Them Petrified.