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Is Crypto Finally Ready To Pay The Piper?

Is Crypto Finally Ready To Pay The Piper?

Last December, the outgoing Trump administration said it was preparing a few measures that would, among other things, strip anonymity from cryptocurrency. However, the Biden administration has declared a freeze on all agency rule-making, pending a review by appointees to be made.  

That could change if unnamed high-level sources speaking to the media this week are to be believed.

Considering the recent surge in popularity for crypto among investors and its significance in this year’s most dangerous ransomware attacks, the time may have come for serious regulation. 

Bloomberg has cited anonymous sources familiar with the matter as saying that the Biden administration is weighing an executive order that could lead to regulations on cryptocurrency 

But while crypto doom-and-gloom stories are now circulating widely, further examination of the Bloomberg anonymous source statements this is still an “exploration” event.

According to the news agency, the administration is first considering an executive order that would require federal agencies to study the crypto industry and recommend appropriate oversight, which could include “regulation, economic innovation and national security”

So at this point, we might only end up seeing what the administration’s potential strategy is for crypto, but it sounds like a relatively long road to any particular destination.

That doesn’t mean that crypto investors are on edge right now. Something will come eventually, and it will likely be a big disappointment for a digital coin world that thrives on anonymity and monetary freedom.

There have already been plenty of recommendations, including Intelligence Committee senators who have proposed an increase in measures to regulate and trace cryptocurrencies.

Last year, the U.S. Financial Crimes Enforcement Network (FinCEN) proposed a new rule that would require cryptocurrency wallets not hosted by financial institutions in the U.S. to be tied to verified identities.

The proposal would require banks and money services businesses dealing in crypto, including exchanges, to collect and report on crypto owners who use wallets that aren’t held by any custodian.

Treasury secretary Janet Yellen recently has also said the government should create a regulatory framework for cryptocurrency

None of this is surprising given the fact that the cryptocurrency market has now hit a whopping $2 trillion. That is a huge market running amok. 

Since last year, cryptocurrency has been the fourth most traded asset, following real estate, stocks, mutual funds and bonds. A recent poll conducted by CNBC and Momentive now finds that 10% of investors surveyed have invested in cryptocurrency 

In 2019, cryptocurrency theft skyrocketed year-over-year, with losses from digital currency crime topping $4.4 billion, a 150% increase over the first nine months of 2018.

In 2020, due mainly to improved security, crimes targeting the cryptocurrency sector dropped by more than half compared to the previous year.

Yet, this year crypto was used in several ransomware attacks, in the U.S. and abroad.

In May, Colonial Pipeline revealed that it paid hackers nearly $5 million in Bitcoin to regain access after a massive ransomware attack. Two months earlier, one of the largest insurance companies in the United States, CNA, was reported to have secretly paid $40 million to regain control of its network under similar circumstances.  

In July, cyber criminals hijacked VSA software used by Florida-based IT firm Kaseya, which provides IT services to thousands of small- and medium-sized businesses. 

Elsewhere, last week, the Bank of England said that as the risk grows, increased bitcoin and crypto regulation is needed.

Last month, China expanded an earlier ban on bitcoin and crypto mining, cracking down on all crypto trading activity.

The People’s Bank of China has announced that all transactions of crypto-currencies are illegal, effectively banning digital coins across the board.

Others are attempting to control crypto by making their own digital legal tender. 

El Salvador recently added bitcoin as a parallel legal tender, and Panama is preparing to follow suit.  

The European Central Bank also confirmed earlier this year that it was exploring the possibility of a “digital euro” currency of its own. 

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