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The government wants to bolster cybersecurity. Is bitcoin regulation one answer?by Daniel Bean
TechTrends

WATCH| "When you can just convince someone on the other end to just go to this site and click a few buttons and pay and buy a bitcoin ... it really does help to fuel cyber crimes."

Cybersecurity experts recently met with lawmakers to talk about ways for preventing an event like May’s international WannaCry ransomware attack from wreaking havoc in the U.S.

But one topic was not brought up: bitcoin, the virtual currency that ransom hackers often ask to be paid in exchange for unlocking infected computers.

Bitcoin's rise in value and popularity has occurred alongside a rise in ransomware attacks, which quadrupled from 2015 to 2016. This was the bitcoin request screen that victims of WannaCry saw after their files were locked.

Ben Johnson, a former NSA employee and current CTO of Obsidian Security, told Circa that Bitcoin is a currency of choice for ransomware payments online because payments can be received anonymously. But he believes a unique regulatory infrastructure for regulating bitcoin could change that.

"If a government embraces it and really start to support it and make it easy for citizens and others to use it for commerce and things like that ... then they can adopt it such they have a little more control," he said.

Robert Knapp, CEO and Co-Founder of CyberGhost, a secure private networking service, explained to Circa that, although bitcoin wallets -- or accounts -- don’t require a verified identity be attached, all bitcoin transactions are made on a public ledger, which should make the currency something regulators with a desire to weed out wrongdoing would want to embrace rather than outlaw.

"That’s what everybody dreams of that wants to regulate banks, that we could see every transaction done. And that exactly happens on the bitcoin blockchain," said Knapp.

Knapp also believes that if bitcoin to becomes more widely used in the U.S., it could actually slow one of the largest types of cyber crimes in the country: credit card hacks.

In 2013, the Financial Crimes Enforcement Network issued guidance applying anti-money laundering rules to bitcoin, but no special regulatory systems or infrastructure has been created in the U.S.

As it stands, the public nature of bitcoin transactions is already making it a difficult currency to launder money through -- if anyone is watching. The bitcoin wallets reportedly associated with the WannaCry hack, which contain over $100,000 worth of bitcoin, haven't been unloaded to bank accounts because of the amount of attention the crime got.

In April, Bitcoin became an official, state-sponsored currency in Japan, and Russian officials have recently said they are expecting cryptocurrency regulations to come to its country by 2018. Both countries are making its moves to adapt to the new financial format in order to get ahead of widespread fraud and wrongdoing with the currency -- and that would include cyber crime payments.