US Treasury Department Warns Crypto Agencies About Russian Counterattack

US Treasury Office warns of Russian retaliation against crypto agents in the US. (photo: twitter @USTreasury)

JAKARTA – The US Treasury has contacted cryptocurrency companies about their cybersecurity controls amid concerns that Russia could carry out retaliatory cyberattacks in response to Western sanctions.

The United States and its allies have issued a series of sanctions targeting Russian banks, Russian state-owned entities and the elite, following the country's invasion of Ukraine last week.

The US government has warned for weeks that Russia or its allies could carry out cyber attacks in retaliation for the sanctions. They also directed banks to increase monitoring, scenario planning, and prepare additional staff if hostile activity spiked.

US regulators see the bloated cryptocurrency industry as a growing source of systemic risk. US Treasury officials have also been in discussions with cryptocurrency exchanges and trading groups to ensure US digital assets are secure.

The official, as reported by Reuters, also shared indicators that IT systems had been compromised, such as network infiltration or data breaches, where cryptocurrencies and other financial companies were being targeted.

According to research by the University of Chicago, the value of all cryptocurrencies has soared past $3 trillion last year, of which about 13% to 14% of Americans are investing in digital assets by 2021.

As digital assets become more popular, cryptocurrency hacking has also grown. Last year, for example, an anonymous hacker stole some 600 million US diesel (Rp 8.6 trillion in cryptocurrencies from Poly Network, a decentralized financial network, before returning it. The hacker also stole at least 150 million US dollars (Rp 2.1 trillion) from crypto exchange BitMart.

US regulators have also warned that the defeat of crypto or the use of cryptocurrencies could pose risks to the wider financial system.

Several US lawmakers have expressed concern that digital assets could be used to evade Western sanctions, although administration officials from President Joe Biden's administration have played down that risk.

Cryptocurrency exchange Binance on Thursday, March 3 said holders of sanctioned Russian bank cards will not be able to use it on their platform. Binance also confirmed that the access of sanctioned individuals has also been restricted.

However, some of the largest cryptocurrency exchanges in the world are still operating in Russia. They violate sanctions imposed by the US and its allies, which experts say have undermined Western efforts to isolate Moscow after the invasion of Ukraine.