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Current director of the Central Intelligence Agency William Burns said his predecessor at the government agency initiated projects focused on gathering intelligence on cryptocurrency.
Fielding a question on crypto at the Wall Street Journal CEO Council Summit on Monday, Burns said the CIA was looking to add expertise in cryptocurrencies and blockchain to its team of intelligence analysts in addition to communicating with industry experts. He said the challenges from the crypto space “could have enormous impact” on the United States given what he has already seen in ransomware attacks.
“My predecessor had started this,” said Burns, likely referring to the actions of former acting CIA director David Cohen. “[They] had set in motion a number of different projects focused on cryptocurrency and trying to look at second- and third-order consequences as well and helping with our colleagues in other parts of the U.S. government to provide solid intelligence on what we’re seeing as well.”
He added that building such knowledge on crypto was “an important priority” for the Agency, and he planned to devote “resources and attention” to it. The CIA director did not mention specifics on the direction the Agency planned to take in regard to fighting cyberattacks, but hinted it would aim to “get at the financial networks” for criminal groups using digital currencies for ransom.
Burns, who assumed the director position in March, has seen hackers demand millions in crypto over an attack on Colonial Pipeline system in May, but also a task force from the U.S. government respond by recovering the majority of the lost funds. Michael Morrell, a former acting CIA director from 2012 to 2013, said “blockchain analysis is a highly effective crime fighting and intelligence gathering tool,” one underutilized by law enforcement agencies.
Related: CIA Has Had Keys to Global Communication Encryption Since WWII
There is no fixed term for a CIA director, meaning Burns will likely serve at the Agency at the pleasure of U.S. President Joe Biden. At the time of publication, Biden has yet to announce his picks to fill three empty seats on the board of governors of the Federal Reserve System.
Don’t read this Kaspersky report if you’re prone to paranoia. The cybersecurity experts and antivirus manufacturers released its annual “Cyberthreats to financial organizations” paper and two items are about cryptocurrencies. Prepare to be spooked. The report begins with an evaluation of last year’s predictions and they were only wrong about one, and not by much. Plus, this year’s cyberthreats sound very much like a possibility. Luckily, you found this article and can prepare yourself accordingly.
Related Reading | Hackers Nab $16 Million In BTC Through Bitcoin Wallet Exploit
First, Kaspersky paints the picture and gives us the least scary threat:
“The cryptocurrency business continues to grow, and people continue to invest their money in this market because it’s a digital asset and all transactions occur online. It also offers anonymity to users. These are attractive aspects that cybercrime groups will be unable to resist.”
And then, Kaspersky makes our skin crawl:
“And not only cybercrime groups but also state-sponsored groups who have already started targeting this industry.”
As the honeypot grows, criminals will be increasingly attracted to cryptocurrencies. That much we can deal with. However, the state-sponsored groups are also a logical progression. How could they not target cryptocurrencies? And they’re going to use much more sophisticated methods to get at you. For example:
Friendly reminder that @fold_app recently partnered with @NianticLabs, backed by the @CIA #DeleteFoldApp https://t.co/IdyXO5eAKb
— Louisa Alexa (@LouisaAlexa) November 24, 2021
The people behind Pokémon GO recently partnered with Bitcoin rewards card Fold App to make a Bitcoin-themed Pokémon GO clone that pays in BTC. We have no idea if what this Twitter user says holds any water, but the whole enterprise does sound suspicious. And in light of this prediction by Kaspersky, even more so.
However, just to be clear, NewsBTC knows nothing about Niantic Labs and the Fold App. Do your own research.
BTC price chart for 11/26/2021 on Oanda | Source: BTC/USD on TradingView.com
Once again, Kaspersky makes us rethink our security methods:
“While some people consider it risky to invest in cryptocurrencies, those who do realize that their wallet is the weakest link. While most infostealers can easily steal a locally stored wallet, a cloud-based one is also susceptible to attacks with the risk of losing funds. Then there are hardware-based cryptocurrencies wallets. But the question is, are there sufficiently reliable and transparent security assessments to prove that they are safe?”
However, their prediction is much more concerning:
“In the scramble for cryptocurrency investment opportunities, we believe that cybercriminals will take advantage of fabricating and selling rogue devices with backdoors, followed by social engineering campaigns and other methods to steal victims’ financial assets.”
There are already horror stories about dubious software wallets that end up in lost funds. And yeah, fake hardware wallets seem to be a logical next frontier. Just this year, following the Ledger hack, reports of weird-looking Ledger wallets took over the Internet. However, if a more sophisticated criminal made a better-looking device, it could wreak havoc through the cryptocurrency community.
And if Kaspersky says it will happen…
Related Reading | DeFi Hack: Vee Finance Losses $35 Million To Hackers Following Mainnet Launch
The “Cyberthreats to financial organizations” contains a few more items that aren’t fully related to cryptocurrencies, but may be of interest to all of you. They predict “an exponential growth in infostealers,” and a rise in ransomware from “small regionally derived groups.” Plus, data breaches in Open Banking, Mobile Banking Trojans, and identify risk in remote workers using company equipment for entertainment purposes. Read the whole thing and be prepared for everything.
Featured Image: vickygharat on Pixabay | Charts by TradingView
Michael Morell, the former acting CIA Director, is confirming what the crypto community has held for years. In a report, he said money launderers and other criminals don’t use the Bitcoin network because transactions are too open and public.
This is a conclusion reached by the Crypto Council for Innovation (CCI)–a new lobbying group that hopes to eventually inform and influencer regulatory action in the emerging cryptocurrency sector.
CCI “wants the same thing from technology,” the new group will never yield in “providing useful information – and dispelling misinformation” for policymakers, regulators, and citizens around the world.
“CCI focuses its efforts on the three areas where crypto has the greatest potential to transform lives and livelihoods for the better, by creating stronger economic growth and more jobs, a more inclusive, accessible financial system, and enhanced privacy and security.”
The report notes that the transparent nature of the underlying public chains is a deterrence for criminals looking to launder cash or finance terrorists.
According to Gus Coldebella–the Chief Policy Maker at Paradigm, who now serves as one of the organization’s heads, wants to determine whether the conventional wisdom that Bitcoin (and crypto) is a tool for money laundering and tax evasion is objectively accurate.
Interestingly, the CCI is looking beyond the U.S. Their focus is on advising and “moving” the regulatory needle across the globe.
This, Gus, explains is because the borderless nature of cryptocurrencies makes it irrelevant to address policymakers in one country and leaving out the rest.
Their coordination–especially of defining crypto as an industry, would mean opting for a global approach in readiness for crypto adoption.
“If we don’t engage with governments as an industry, then governments are still going to do what they’re going to do without the benefit of hearing from people who are literate in crypto and have been thinking about these issues for years.”
As BTCManager reports, more U.S. states, including Wyoming and Miami, want to be leaders in crypto and blockchain.