Infosec Exec Urges US Lawmakers to Tighten Crypto Regs Over Pandemic-Driven Scams

Infosec Exec Urges US Lawmakers to Tighten Crypto Regs Over Pandemic-Driven Scams

Tom Kellermann, head of cybersecurity strategy at VMWare, addresses a virtual hearing of the House Financial Services Subcommittee on National Security. (Sandali Handagama/CoinDesk)

Cryptocurrencies should be regulated more stringently, a VMWare security executive told U.S. lawmakers, citing a rise in cybercrime during the pandemic.

The focus of , hosted by a House Financial Services subcommittee, was criminal activity around financial services during the COVID-19 lockdowns, when bad actors online are targeting people who are unemployed or working from home. But crypto made an appearance, with lawmakers questioning witnesses about its potential uses in fraud or organized crime.

Tom Kellermann, head of cybersecurity strategy at publicly traded software company VMWare, need stronger oversight. There has been an increase in the number of security breaches and thefts at digital currency exchanges, which cybercriminals used to launder stolen money, he said.

“In addition to organized crime, extremist organizations are also known to use alternative payment systems for operational purposes and to raise funds. Many of these payment systems and cryptocurrencies offer true or relative anonymity. This raises the necessity of increased regulation of digital money,” Kellermann said during his opening remarks. 

He urged the House members to pressure their Senate colleagues to that would revise requirements related to anti-money laundering and counterterrorism financing laws. He also suggested charging the Financial Stability Oversight Council, a monitoring body of the Treasury Department, with the responsibility of creating a framework for regulating cryptocurrencies and developing guidelines for strong protections against money laundering as well as cyber threats to those marketplaces.

In his testimony, Kellermann claimed social media platforms are rife with advice on “regarding jihadists’ potential use of Dark Wallet, a bitcoin wallet that provides anonymity.”

The use of capital letters in his written statement suggests he was referring specifically to , one of the earliest anonymizing wallets. That project appears to have been inactive for some time; the last code update was made in 2016, according to its

Later, Kellermann and Rep. Anthony Gonzalez (R-Ohio) used the phrase in a seemingly generic sense, to refer to anonymizing services.

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