US Treasury seeks to keep digital assets safe

US Treasury seeks to keep digital assets safe

The US Treasury DepartmentUS Treasury Department reached out to companies regarding their cybersecurity controls amid concerns that Russia could wage retaliatory cyber attacks in response to Western sanctions, according to a person familiar with the situation.

After the invasion of Ukraine, the United States and its allies have unleashed a slew of sanctions against Russia's banks, state-owned entities, and elites.

Governments have warned for weeks that Russia or its allies could carry out cyber attacks as a retribution for sanctions, leading banks to increase monitoring, scenario-planning and line up extra staff in case of hostile activity surges.

US Treasury officials have been in discussions with exchanges and trade groups to make sure US digital assets are safe, as the US regulators see the ballooning industry as a growing source of systemic risk, according to a person familiar with the matter.

The person said that officials are sharing indicators that IT systems have been compromised, such as a network infiltration or a data breach, with crypto and other financial firms.

The value of all cryptocurrencies went above US $3 trillion last year, with approximately 13 per cent to 14 per cent of Americans invested in digital assets as of 2021, according to research by the University of Chicago.

As the digital asset has become more popular, hacks have grown. An anonymous hacker took $600 million in cryptocurrencies from the Poly Network, a decentralised finance network last year, before giving it back. The hackers also stole $150 million from BitMart, which is a cryptocurrency exchange that is owned by BitMart.

Regulators have warned that routs or runs on Cryptocurrencies could pose a risk to the financial system.

Some US lawmakers have expressed concern that digital assets could be used to evade Western sanctions, but Biden administration officials have played down that risk, despite the fact that digital assets can be used to evade Western sanctions.