U.S. officials are looking closely at trends in cybersecurity and how economic sanctions might force rogue countries to take extreme measures related to using cryptocurrencies for fraud.
Remarks from FBI Cyberdivision deputy assistant director Tonya Ugoretz reported by Korea Herald and other publications today refer to activities by North Korea under pressure of international sanctions.
Ugoretz cited the Wannacry operation in 2017 that caused so much damage internationally, and suggested Pyongyang has also made other moves on global attacks involving cryptocurrencies.
“Sanctions are having an economic impact, so cyber operations are a means to make money, whether it’s through cryptocurrency mining or bank theft,” Ugoretz reportedly said.
Another major threat involves ‘ransomware’ operations, situations where hackers lock or steal files and hold them for financial ransom – often asking for payment in Bitcoin in order to avoid tracking.
The issue of bad actors using cryptocurrency attacks to ease pressure from sanctions is one that’s getting a lot of attention currently as U.S. relations with Venezuela continue to become more complex, and the situation in that country deteriorates.
Venezuela’s “Petro” central bank cryptocurrency is pointed to by detractors as an example of potentially harmful cyber-activity.
There are also concerns that Iran could move to issue a national crypto coin as part of a strategy to deal with sanctions there.
“Iranian authorities see an opportunity in cryptocurrencies due to its potential to challenge exertion of extraterritorial restrictions,” writes Maziar Motamedi at Coindesk today. “Be that as it may, people actually working on ongoing local projects know they can’t – and are not designed to – circumvent sanctions.”
Others are not so sure that crypto couldn’t become this kind of tool in the future.
As in this January NYT story, commentators continue to lay out ways that Iran could skirt the impact of sanctions using a crypto play.
All of this bears down on the central debate around cryptocurrency: whether the decentralized platform inherently aids transparency and efficiency, or whether it opens the doors to crime and fraud. What do you think? Write us a note and let us know your outlook on the utility of crypto – and how that is likely to enhance markets.