The U.S. Senate Committee on Homeland Security and Governmental Affairs held a public hearing June 7 focused on cryptocurrency and ransomware.
The chairman of the committee, Sen. Gary Peters, D-Mich., spoke about the surge in crypto crimes, according to a transcript of his opening statements. Peters noted most of the crimes are committed by foreign actors who target U.S. citizens. Cryptocurrency transactions are easy targets by criminals because the exchanges are hard to trace, leaving few clues for police to track.
"In 2020, according to a Chainalysis study, malicious hackers received at least $692 million in cryptocurrency extorted as part of ransomware attacks, up from $152 million in 2019, and over a 300% increase year-over-year," Peters said in his opening statement. "These figures are likely a drastic underestimation of the actual number of attacks and ransom payments made by victims."
Peters noted one ransomware attack could force the closure of a business, even if they pay the ransom demand, according to his statement.
"Cybercriminals may shut down computer systems, expose sensitive data or erase data entirely, causing significant disruption to business continuity," Peters said in his statement.
"For example, last year, according to Chainalysis, approximately 74% of global ransomware revenue went to entities either likely located in Russia, or controlled by the Russian government," Peters added, according to his statement. "And attacks from Russia-based entities are only expected to increase, especially as the United States continues its support of Ukraine against Russia’s illegal invasion."
Ranking Member Sen. Rob Portman, R-Ohio, said crypto crimes and crypto popularity both rise in frequency together, according to his statement. Markets have developed among criminal hackers, where ransomware developers sell their malware software to buyers around the world, which increases the frequency of the attacks.
According to a notice about the hearing, cyber security expert witnesses Megan H. Stifel, chief strategy officer at the Institute for Security and Technology; Bill Siegel, CEO of Coveware; and Jacqueline Burns Koven, head of cyber threat intelligence at Chainalysis, testified at the hearing.
Koven's testimony spoke positively of cryptocurrency, linking it to Americans’ historical values of free exchange in her 25-page report. Koven explained cryptocurrency's significance in global market competition with China, saying it makes a perfect opportunity to develop cryptocurrency literacy among the U.S. population as a way to limit the risks of this expanding market.
"At Chainalysis, we share concerns about the illicit use of cryptocurrency, but we know that the inherent open nature of this technology can be leveraged to mitigate the risks associated with it and bring bad actors to justice," Koven said, according to her testimony.
Koven talked about the importance of cryptocurrency blockchains that help secure crypto exchanges because they enable policymakers and government agencies to detect, disrupt and, ultimately, deter illicit activity. She detailed blockchain technologies, the varieties of ransomware sold and then made recommendations for the committee. She insisted that cryptocurrency and crypto crimes are so large that a joint public-private initiative must be made to secure the market, according to her testimony.
