London Daily

Focus on the big picture.
Monday, Jun 30, 2025

Crypto’s Anonymity Has Regulators Circling After the Colonial Pipeline Hack

Crypto’s Anonymity Has Regulators Circling After the Colonial Pipeline Hack

When Berkshire Hathaway Inc. Vice Chairman Charlie Munger earlier this month called Bitcoin “useful to kidnappers and extortionists” and “contrary to the interests of civilization,” crypto enthusiasts mocked his investment performance, compared him to an elderly Muppet, and said he was too old to understand the technology.
Michael Saylor, a crypto investor and chief executive officer of MicroStrategy Inc., asked rhetorically in an interview with a precious metals website, “Do you go to your great-grandfather for investment advice on new technologies?”

Munger’s warning is looking pretty good about now. Days ago, a criminal gang hacked Colonial Pipeline Co., in effect shutting down the conduit for 45% of the East Coast’s fuel supply. Details of the hack haven’t been revealed, but the group’s modus operandi is to encrypt its victims’ data and threaten to release it publicly unless paid a ransom in Bitcoin or another cryptocurrency.

How’s that for “contrary to the interests of civilization”?

The overwhelming majority of Bitcoin users have nothing to do with the criminal underworld, and plenty a heist is funded by plain old U.S. dollars. Blaming Bitcoin for the activities of its holders is a bit like getting mad at a $100 bill for being used in a drug deal.

But after letting Bitcoin spend most of its 12-year rise outside the watchful eye of government, regulators from the U.S. to Europe are cracking down. Their ambition is to take away the treasured anonymity that makes Bitcoin and other cryptocurrencies a haven for hackers and other criminals. “We don’t really have an adequate framework to deal with the different issues that they pose from a regulatory perspective,” said U.S. Treasury Secretary Janet Yellen at the Wall Street Journal CEO Council Summit on May 4, calling crypto’s use in illicit activities a topic “well worth addressing.”

Cryptocurrencies can be a pretty poor currency for criminals. Bitcoin is built on a digital ledger that publicly records every transaction, with users identified by a string of characters called a “wallet address.” If a law enforcement agency can figure out a wallet’s owner, it essentially has access to that person’s entire transaction history, no subpoena required. Compare that with the relative untraceability of paper money, and the good old greenback starts to look pretty good for your average criminal enterprise. But for online crimes, Bitcoin remains the default payment. Since the FBI shut down the Silk Road marketplace in 2013, other digital currencies that aren’t as easily traceable have emerged. Yet Bitcoin is still the most prevalent, in part because it’s so easy to get and because it’s held its value better than others.

As the Colonial hack shows, ransomware is by far the fastest-growing problem. In 2020 almost $350 million worth of cryptocurrency went to wallets associated with those attacks, quadruple the level of 2019, according to Chainalysis Inc., a Bitcoin forensics firm.

Regulators have taken notice. Toward the end of 2020, the U.S. Treasury Department proposed rules that would require banks, exchanges, and anyone else dealing in Bitcoin to make a greater effort to discover the true identities of people trying to withdraw the currency—and, in some cases, to figure out to whom they’re sending the currency.

The Treasury drew more than 7,000 letters during its official comment period. Negative comments came not just from crypto-focused companies such as cryptocurrency exchange Coinbase Global Inc. but also from Wall Street heavyweights like Fidelity Investments, which has recently tried to build a presence in the cryptosphere. Some analysts said the proposal could even cause the price of Bitcoin to crash. Former Treasury Secretary Steven Mnuchin pushed to finalize the rules before President Donald Trump left office, but his department ultimately punted the final decision to the Biden administration.
Newsletter

Related Articles

0:00
0:00
Close
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
×