Digital assets and cryptocurrencies are considered a new entrant in payment settlement avenue but there are simmering issues heating the corner these include fear that the widespread adoption of crypto assets could threaten the effectiveness of the monetary policy. Further, there are rising issues of tax evasion, price volatility, eroding the effectiveness of capital flow, a proliferation of crypto assets that can affect the international monetary system and fiscal risks for public finance.
Governments and multilateral institutions are developing a foolproof ecosystem for better establishment of the crypto ecosystem. Amid these preparations, Christy Goldsmith Romero, Commissioner at the U.S. Commodity Futures Trading Commission (CFTC), during her speech at the FIA International Derivatives Expo Conference, highlighted that Cyber hackers today are “more coordinated, innovative, and resourced.
Commissioner Romero underlined that The combination of the top three cyber threats, ransomware, zero-day vulnerability, and third-party servicer vulnerability, along with the increasing use of artificial intelligence poses a challenging landscape for cybersecurity.
During her speech, she stated that as one part of the advancement to cyber resilience, the U.S. Government, including the CFTC, is advancing to Zero Trust under a White House Executive Order.
Notably, the Cybersecurity and Infrastructure Security Agency (CISA) created the Zero Trust Maturity Model. The framework aids organizations in converting to a zero-trust architecture, which is more secure.
In the event, she categorically highlighted the North Korean menace in the sphere of cryptocurrencies. It is important to note that North Korea allows state-sponsored hackers who often use mixers to hide the trail and launder money to allegedly benefit top leaders. In April, the U.S. Treasury Department imposed sanctions on three individuals linked to North Korea’s Lazarus Group. It is important to note that the issue was also discussed in the United Nations Security Council and a report was published later.
North Korea-backed hackers stole $1.7bn (£1.4bn) of crypto in 2022, says blockchain analysis firm Chainalysis. This nearly quadruples the country’s previous record for cryptocurrency theft – $429m in 2021. The loot also made up 44% of the $3.8bn stolen in crypto hacks last year, which the firm called “the biggest year ever for crypto hacking”. Experts have said the country, facing heavy sanctions, is turning to crypto theft to fund a clear defence arsenal.
During her speech, the Commissioner proposed a proportionate and appropriate strategy that fits the organization while considering unique risks. Second, the commissioner issues instructions to adhere to generally recognized norms and best practices. To elevate accountability, she also advocates for governance. The two final pillars are enhancing third-party risk resilience and leveraging existing work already done in the cybersecurity space.
She calls for collaboration between regulators, industry participants, and the government as a defence against cyber criminals. It is crucial to understand that a collaborative effort with comprehensive policymaking can eliminate the rising crypto menace.