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07.29.21

US Senate focuses on crypto-related risks from ransomware attacks to banking stability

BY Andrew L. Share

US Senator Gary Peters (D-MI), Chairman of the Homeland Security and Governmental Affairs Committee, recently announced that he is conducting an investigation into what role cryptocurrencies play in facilitation of ransomware attacks and other cybercrimes. Acknowledging that cryptocurrencies are a preferred method of payment in ransomware attacks due to the anonymity of the user and difficulty in traceability, the investigation is intended to look into what policy changes are needed to disrupt ransomware attacks. Senator Peter’s full statement on this investigation can be read here.

Separately, Senator Elizabeth Warren (D-MA), a member of the Senate Banking Committee, urged Treasury Secretary Janet Yellen, in a letter to the Secretary earlier this week, to identify and remedy the threats and risks posed by cryptocurrencies and to craft a “comprehensive and coordinated” framework through which to regulate virtual coins.

While no policy changes concerning cryptocurrencies have been proposed by the committee, yet, it is likely that they should be expected to extend beyond ransomware attacks. However, whether any such policy will impose any sort of chilling effect on cryptocurrencies remains to be seen.

Nixon Peabody’s Cybersecurity and Privacy Team will continue to monitor developments.

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Andrew L. Share

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