US Justice Department Creates Task Force to Combat Cryptocurrency Ransomware

The United States continues to contemplate taking further action in regards to the growing crypto space. In the latest endeavor, the Justice Department has decided to create a task force to stop hackers from utilizing digital asset exchanges to conduct ransomware attacks.

Ransomware on Exchanges

As reported by Bloomberg, the new team’s goal is to target infrastructure that allows hackers to exploit their victims financially. Typically, this is done by freezing a victim’s data and demanding a ransom payment – often using cryptocurrency.

Lisa Monaco – Deputy Attorney General of the United States – believes digital asset exchanges can play a role in this.

“Cryptocurrency exchanges want to be the banks of the future,” says Monaco. “We need to make sure that folks can have confidence when they use these systems.”

There is some reason for Monaco to be concerned. Last month, the US treasury department decided to sanction the Czech Republic-based exchange “Suex” for facilitating ransom payments.

The Justice Department has also started a new cyber-fraud initiative requiring government contractors to report hacking attacks and security vulnerabilities. Otherwise, Monaco said there will be steep consequences:

“We will extract very hefty fines. This is a tool we have to ensure that taxpayer dollars are used effectively.”

Using Crypto for Ransomware Attacks

The department’s new team is one part of the United States’ increasing war on ransomware attacks. These crimes have skyrocketed in the country in recent years, with over $400 million being lost in ransomware payments in 2020. This is over four times the amount lost in 2019.

Cryptocurrencies play a partial role in this. Due to the peer-to-peer and decentralized nature of blockchain networks like Bitcoin, payments are uncensorable and irreversible. This makes them helpful for cyber criminals to use without their payments being identified or stopped.

It’s not just Bitcoin either: Privacy-enhancing coins like Monero are also utilized to facilitate these payments. Two months ago, John Oliver poked fun at Monero for deliberately catering to cyber-criminals in its advertisements.

That said, the use of cryptocurrency for financial crimes may be overstated. Data shows that illegal activity accounted for less than 1% of crypto transactions in 2020. Of that, only a small portion are ransomware crimes, and most of the others simply involve scams.

Featured Image Courtesy of DW