For some time now, the President of the United States and other US officials have been pursuing digital currency legislation and dealing with criminals in this area more seriously than before. But will the recent US approach further restrict digital currency-related activities?
to the Report On September 21, 2021, the US Treasury Department announced that it would boycott a digital currency exchange. The reason for this action of the Ministry of Treasury was the mentioned exchange aid to ransomware and facilitating financial transactions for them.
SUEX Exchange is a privately held digital currency exchange company registered in the Czech Republic. The company has traded illegally for at least eight different ransomware. The Treasury Department said more than 40 percent of the exchange’s trading history was related to illegal activities.
This means that the Soyux Exchange can no longer cooperate with American institutions and has no right to interact with American citizens. The SVOX exchange boycott is the first action taken by the United States since the 2020 crackdown on ransomware and cyberattacks. Ransom attacks caused $ 400 million in damage last year alone, almost four times as much as in 2019.
The US Treasury Department has emphasized that despite the legality of digital currency activities, those who use these technologies for illegal purposes and activities will be prosecuted. The new law was unveiled at a time when the recent attack on SolarWinds affected several government agencies, including the US Departments of National Security, State, Commerce and Treasury.
FireEye, a cybersecurity company, was able to detect the security breach and then report that high-level systems had been attacked. Shortly afterwards, Microsoft confirmed that it had detected signs of malware on its systems. Malware activities were such that the company’s customers were also affected. Disclosure of this issue by Microsoft was crucial to identifying and understanding the dimensions of these attacks. In light of these developments, the US government has stated that awareness of cyber-attacks and existing security breaches is the first step in enacting targeted laws and reducing the damage caused by such attacks.
Banning infringing exchanges and taxing digital currencies may make investors and bankers pessimistic about entering the industry.
Fortunately, the new rules may have the opposite effect, as they increase the transparency of digital currencies and a more legitimate business environment can increase overall acceptance of China’s blockchain technology.
Biden campaign against ransomware
In the spring of this year, Biden called on his campaign to target and deal with popular ransomware attacks. Studies show that some of these ransomware originated in Russia. The Treasury Department emphasizes that the new sanctions are not intended to destroy the prospect of digital currencies in the United States, but rather warn digital currency exchanges to comply with the law and refrain from engaging in illegal transactions.
As a result of the sanctions, all assets of the Sewax exchange and the benefits it derives from its assets in the US jurisdiction have been frozen.
Under the new rules, American citizens are generally not allowed to do business with sanctioned entities. US financial institutions that cooperate with sanctioned entities will be fined and may even be sanctioned themselves.
In addition, any natural or legal person in the United States who violates the embargo and does business with the embargoed companies will be punished, regardless of whether the company is sanctioned or not.
The Treasury Department’s official warning to businesses contains instructions on how to deal with ransomware attacks. The Cyber-Attack Information Act was passed in response to the attack on Solar Winds. The law requires government agencies and contractors and companies working in critical infrastructure to report ransomware attacks to the Department of Homeland Security.
Under the law, companies are only granted immunity if they report intrusion into their systems. In this case, the Ministry of National Security will not disclose their personal information. This means that American companies can easily report such incidents, and the government will continue to be effective.
In the event of a cyber attack or security breach, the Treasury Department will not allow companies to pay a ransom, as this would encourage attackers to attack other organizations as well. In such a situation, the best way is to report the attack and cooperate with the authorities.
The US Deputy Treasury Secretary has said that money changers such as Svox allow cybercriminals to cash in on the money they have received as ransom. As a result, legalizing such exchanges can reduce the risk of ransomware attacks and prevent the recurrence of such cases. Therefore, the security of the people who use these exchanges will also improve.
Also read: Once upon a time in the Wild West; The never-ending story of digital currency legislation
What effect does the recent US approach have on digital currencies?
Easy access is what has made digital currencies a revolutionary technology. The sanctions appear to be restricting the activities of institutions that promote free trade in digital currencies and blockchain technology. However, if the exchanges are standardized, it will be easier for companies like Svex to continue operating and the security of their users will increase.
Lack of proper rules and regulations in the digital currency industry can increase scams and information leaks, resulting in a more insecure environment for investors and users of digital currencies.
Gary Gensler, chairman of the Securities and Exchange Commission, warned earlier this year that the new digital currencies were fraught with fraud, fraud and misuse in some cases, and that the area was in dire need of a comprehensive regulatory framework. have. We must also take into account that this industry is on the verge of prosperity.
It seems that fans of digital currencies will not accept stricter rules. However, in order to be able to get the industry into the mainstream, we need these regulations.
The US House of Representatives has passed several special bills and is now waiting for the green light of the Senate. One of these is the Law on the Elimination of Barriers to Innovation, passed in 2021 and requiring the US Securities and Exchange Commission and the US Commodity Futures Trading Commission to form a special working group on digital currencies. These commissions must ensure that legislators and the private sector work together to encourage and develop innovation.
The Consumer Technology Safety Act is another example of two bills related to China’s blockchain industry. Under the law, the Ministry of Commerce and the Federal Trade Commission must investigate and report on the use of blockchain technology and digital currencies.
Recently, there have been reports that Biden is seeking an executive order to make the digital currency space more transparent and to have better control over the industry and related activities.
Finally, designing legal frameworks will be extremely beneficial for the digital currency industry, as these laws provide a safe haven for businesses and customers of the network. Stricter rules encourage skeptics to invest in this market. These people are not interested in investing in this market due to the illegality of China’s blockchain industry and digital currencies.
The Biden government is well on its way to regulating the digital currency industry. His government aims to protect users from fraud and information leaks. The new rules bring the digital currency industry one step closer to having a standard regulatory framework. However, this area still needs comprehensive regulations for digital currencies.