Introduced in 2009, Bitcoin (and the other cryptocurrencies that appeared in its wake) offered the prospect of a true virtual currency free of the government rules that regulate traditional fiat currency and the U.S. banking industry. In theory, at least, anyone who knew how it worked and understood its value could trade or invest in Bitcoin without concern over extensive government interference.
Since then, the price of Bitcoin has soared and virtual currencies have turned into a cutting-edge investment tool that many financial advisors now offer to their traditional clients. At the same time, however, there’s a darker side to this market—one that has helped ransomware gangs extort victims and created new instruments for money launderers to hide illicit funds.
A pair of studies published last year by the U.S. Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control concluded that about $5.2 billion in Bitcoin transactions are traceable to 10 of the world’s most well-known ransomware groups.
Now, the White House is seeking to bring some order and possible government regulation to the cryptocurrency realm. On March 9, President Joe Biden signed an executive order to address a host of issues with virtual currencies. This includes cybersecurity concerns as well as the role these digital assets play in U.S. financial markets, according to a fact sheet related by the administration.
The wide-ranging executive order looks to address six issues related to cryptocurrencies and other digital assets, including consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation, the White House noted.
“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk,” according to the White House. “The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate.”
Besides the White House, other federal agencies (such as the FBI and the U.S. Justice Department) are planning to step up their enforcement. Some lawmakers in Congress also see an expanding role for the government to regulate crypto markets.
The increased scrutiny of the cryptocurrency market will likely lead private firms, as well as government agencies, to seek out tech professionals who not only understand how virtual currency works but also have a working knowledge of blockchain—the digital ledger that undergirds Bitcoin and other cryptocurrency, experts noted.
“From El Salvador declaring Bitcoin as legal tender to the individual Bitcoin funding of individuals within the Canadian truckers convoy, as well as the Ukraine government to purchase military components and munitions, Bitcoin—and crypto—has come a long way towards mass adoption,” said Karl Steinkamp, director at cybersecurity consulting firm Coalfire. “To that end, I think the president and the White House see the potential of the United States missing out on critical innovations within the crypto and blockchain space if they delay actions.”
Focus on Cybersecurity
Since Biden came into office in January 2021, the administration has focused on increasing the nation’s cybersecurity capabilities. This includes additional protections for consumers as well as efforts to thwart nation-state or sophisticated cybercriminal attacks that target businesses and government agencies.
The cryptocurrency executive order also focuses on cybersecurity, noting: “The increased use of digital assets and digital asset exchanges and trading platforms may increase the risks of crimes such as fraud and theft, other statutory and regulatory violations, privacy and data breaches, unfair and abusive acts or practices, and other cyber incidents faced by consumers, investors, and businesses.”
Steinkamp noted that the focus on the security aspect of cryptocurrency means that organizations are likely to continue seeking out technologists and cyber professionals who can help meet possible government regulations related to these markets.
“If we thought that cybersecurity and regulation were important in less than the digital world of the past, it will be much more important moving forward. The digital transformation of enterprises will require more of a focus on cybersecurity of different and likely disparate technologies and processes that didn’t exist previously,” Steinkamp told Dice. “Tomorrow’s world will be enabled by much more automation and smart technologies and contracts, which each requires security and compliance to protect citizens, businesses, and nation-states. Ransomware and other crypto asset payments have been around for many years, but it is clear that the Justice Department and FBI have seen a turning point in their usage, given the current and upcoming adoption of crypto assets, and in doing so, rightly so, founded a division to focus on crypto assets and tracking.”
The cryptocurrency executive order is the latest example that highlights the transformation of cryptocurrency into the mainstream, which has also accompanied a raft of new positions emerging in the job market, said Chris Morgan, senior cyber threat intelligence analyst at security firm Digital Shadows.
“Companies will be required to stay abreast of the latest development in the crypto space, and need people with an understanding and passion for this emerging technology,” Morgan told Dice. “Like with jobs in cybersecurity, there isn’t one proven route into these jobs, and a genuine enthusiasm for the crypto space will likely put job seekers in the best position for new employment. Other cybersecurity skill sets, including incident management, security engineering, and threat hunting, will also likely translate well to jobs related to cryptocurrency.”
And while cryptocurrency is the main focus, Steinkamp also sees more companies trying to incorporate blockchain and digital ledger technologies, which will require added skills and knowledge.
“I think that we’ll continue to see more businesses integrating them into their business operations. The ability to have more real-time and trackable information across a business and its supply chains is immensely valuable,” Steinkamp said.
Through the executive order, experts believe that the federal government, especially those agencies with oversight over banking and currency, will also likely ramp up their hiring and look for those who can help with regulations around the cryptocurrency markets.
“While this executive order will require people knowledgeable about digital currency and cryptocurrency to be hired by the federal government—the Treasury, in particular, has been looking at getting talent in these areas—it’s important to note that this order is really towards finding ways to solve government problems with digital currency,” John Bambenek, principal threat hunter at security firm Netenrich, told Dice.
Bambenek added that if the federal government also decides to create its digital currency, the need for skilled workers across nearly every agency is likely to explode. “A digital dollar with something like a public ledger solves a long-desired goal of the IRS to track all money transactions in the American economy for purposes of tax collection,” he said.
Steinkamp also sees a need for added technologist help at regulatory agencies. These specialists can look at the technologies that power cryptocurrency and determine how to use those to restrict money laundering and other illegal operations.
“We’ll likely see regulation come more formally into the space from the Securities and Exchange Commission and international anti-money laundering and combating the financing of terrorism entities to protect people and limit fraud and counter-terrorism funding,” Steinkamp added.