A bill designed to allow Congress to assess the risks posed by digital currencies and their use by terrorists and criminals could pave the way for more substantial legislation later this year.
The draft law, which sources suggest will be worked up later this week, aims to grant powers and obligations around reporting on the potential criminal misuses of digital currencies, in particular relating to terrorism.
The bill is thought to have been brought forward in light of recent global ransomware attacks, which have led to significant disruption in public and private networks across the world.
The Homeland Security Assessment of Terrorists Use of Virtual Currencies Bill is scheduled to be marked up by lawmakers Thursday, as it paves the way for immediate further study into the subject.
The bill was originally proposed by Kathleen Rice, representative for New York. It outlines the process for the proposed threat assessment.
“Not later than 120 days after the date of the enactment of this Act, the Under Secretary of Homeland Security for Intelligence and Analysis … shall, in coordination with appropriate Federal partners, develop and disseminate a threat assessment regarding the actual and potential threat posed by individuals using virtual currency to carry out activities in furtherance of an act of terrorism, including the provision of material support or resources to a foreign terrorist organization.”
The unprecedented volume of co-ordinated ransomware attacks over the last week has been a key motivation in bringing this bill to light.
With vulnerabilities exposed in networks across the world, and bitcoin being the currency of choice for the perpetrators, there are fears growing over the implications this could have for the funding of terrorism.
Bitcoin provides anonymity through online transactions, shielding the identity of the parties to transactions. This has made it the de facto currency of choice for ransomware attacks, as well as terrorist fundraising and exchange online and a host of other crimes.
The risk assessment is expected to lead to proposals for more comprehensive legislation in the near future, particularly if practical policy measures are identified in the process.