The Biden administration is looking into the role of cryptocurrencies in recent cyberattacks, report says

• The Biden administration is investigating cryptocurrency’s role in ransomware attacks, according to a report from The Wall Street Journal.
• A number of companies have been hit by the attacks in recent weeks, which encrypt important files and require crypto payments to unlock the data.
• The US is exploring possible ways to trace transactions that are paid to the ransomware culprits.
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The US government is exploring ways to trace cryptocurrency payments made to culprits of ransomware attacks on private businesses and local governments, according to a report from The Wall Street Journal.

Cryptocurrencies like bitcoin have been the favored payment method of hackers that encrypt important files of businesses and hold that data ransom until they are paid. The anonymous nature of bitcoin makes the cryptocurrency ideal payment as hackers work to evade law enforcement.

Recent victims of these attacks include Colonial Pipeline, which paid a $4.4 million ransom payment to regain access to its data, and JBS, the world’s largest meat producer. The hack attacks have put a spotlight on the practice and many consider it a national security risk, as critical infrastructure can be targeted. The Colonial Pipeline attack led to a shortage of fuel in several south eastern states for a couple of days.

In a Wednesday letter to business leaders, Deputy National Security Adviser Anne Neuberger said US officials are working with international partners on developing consistent policies for when to pay ransoms and how to trace them, according to the report.

While the US government strongly discourages businesses from paying the ransom demands, many businesses have no choice as the encrypted data is essential to keep operations running. The hackers honor the terms of their ransom, as they want to build credibility that paying the fee will in fact get their data back.

To get a better handle on who’s making large bitcoin transactions, the Treasury Department has proposed additional rules that would require cryptocurrency transactions above $10,000 to be reported to the IRS, similar to cash transactions over that same threshold.

But ransomware experts are skeptical that bitcoin payment restrictions and tighter regulations will ultimately solve the problem, as the criminals would likely switch to another less-regulated currency that can evade governments, the report said.