U.S. officials have formed a task force to crack down on the use of digital currencies like Bitcoin in ransomware attacks. They plan to focus their efforts on tracing proceeds paid to hackers who disable the operations of companies, government agencies and other groups. The price of Bitcoin fell while Bitcoin-related stocks were mixed.
The Biden administration’s effort, first reported by Bloomberg, includes offering bounties of up to $10 million for information that leads investigators to identify hackers.
The Treasury and State Departments will work together to establish norms for cryptocurrencies and to combat money-laundering schemes.
Meanwhile, Fed chief Jerome Powell, testifying before the Senate Banking Committee, said Thursday that Bitcoin and other cryptocurrencies have completely failed to become a payment mechanism, except for those desiring anonymity.
The value of Bitcoin dropped 3.5% to $31,550 on Thursday, toward the lower end of its range since late May. The Bitcoin price peaked at $64,829.14 in April.
MicroStrategy (MSTR), which borrowed big sums to buy up Bitcoin, fell 3.5% to 541.04 on the stock market today, below its 50-day line. MSTR stock has lost more than half its value since hitting an all-time high of 1,315 intraday on Feb. 9, according to MarketSmith chart analysis. Its relative strength line is trending downward. MicroStrategy’s RS Rating is 97 out of a possible 99, while its EPS Rating is 64.
Among Bitcoin mining stocks, Marathon Digital Holdings (MARA) dipped 0.65% and Riot Blockchain (RIOT) lost 1.3%.
Coinbase (COIN), the largest U.S. based cryptocurrency exchange, was off 2.3%.
Scrutiny of cryptocurrencies is growing around the world, as regulators intensify their efforts to protect consumers from criminal gangs that ensnare unsuspecting traders into money-laundering schemes and other crimes.
On Thursday, Reuters reported that Italian regulators told Binance, one of the world’s largest crypto exchanges, it was unauthorized to operate in the country. Last month the U.K. barred Binance from performing regulated activities in Britain.
Meanwhile, China continues to tighten Bitcoin trading and mining restrictions. Chinese officials have shut down mining activity and directed banks to stay away from cryptocurrencies.
Many of the recent ransomware attacks, including the one on U.S. meat supplier JBS, involved a Russia-linked gang. Typically, the criminal gang gets hold of all of a company’s data, making it impossible for the business to operate. Once the ransom is paid in Bitcoin, the data is released. JBS eventually paid an $11 million ransom to REvil.
REvil suddenly disappeared from the dark web on Tuesday. It is unclear who shut them down. But the disappearance came on the heels of President Biden’s warning to President Putin to act against hackers based in Russia.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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