Biden’s cryptocurrency executive order will help unify counter-ransomware strategy

President Joe Biden signed an executive order on Wednesday for “ensuring responsible innovation in digital assets,” which is designed to, among other things, crack down on the use of cryptocurrency among cybercriminals.

The long-awaited directive orders federal agencies, including the Department of Justice and Treasury Department, to coordinate their approach to the booming cryptocurrency sector. Although the order does not lay out specific policy suggestions, it takes aim at consumer protection, financial stability, illicit financing, leadership in global finance, financial inclusion, and responsible innovation.

Some of the more talked-about provisions include the exploration of a U.S. central bank digital currency, as well as an order to the Treasury Department to issue a report on the future of money and payment systems. But the order also builds on the U.S.’s counter-ransomware strategy that has been underway for several months, according to a senior Biden administration official.

In September, the Treasury Department announced steps it took to disrupt cryptocurrency exchanges that helped criminal networks launder ransoms, as well as increase incident and ransomware reporting to government agencies and law enforcement. The Department of Justice and Federal Bureau of Investigation have also launched cryptocurrency-focused crime units in recent months.

“Digital assets have facilitated sophisticated cybercrime-related financial networks and activity, including through ransomware activity.  The growing use of digital assets in financial activity heightens risks of crimes such as money laundering, terrorist and proliferation financing, fraud and theft schemes, and corruption,” the executive order reads.  These illicit activities highlight the need for ongoing scrutiny of the use of digital assets, the extent to which technological innovation may impact such activities, and exploration of opportunities to mitigate these risks through regulation, supervision, public-private engagement, oversight, and law enforcement.”

The order comes about two weeks after Russia invaded Ukraine, triggering a wide range of sanctions against the country and its top officials. The order makes no mention of the conflict, but does highlight in several places how cryptocurrency could be used to circumvent sanctions in general.

However, the senior official said that cryptocurrency would not be a viable workaround for the aggressive sanctions the U.S. has issued across the Russian economy and the country’s central bank.