New security flaw threatening thousands of medical devices

Published in the March 8, 2022 Morning Cybersecurity Newsletter

Politico writer Sam Sabin sat down with GuidePoint Security’s Drew Schmitt on the possible hurdles of preemptively blocking addresses, showing what these exchanges are capable of in the fight against cybercrime.

When Coinbase decided to block 25,000 wallet addresses linked to Russian people and businesses earlier this week, it inadvertently showed the cybercrime community what it’s capable of in tackling other crypto-enabled crimes, including ransomware.

Coinbase proactively blocked thousands of addresses that it believes are “engaging in illicit activity” amid concerns that Russian oligarchs could lean on cryptocurrency to evade the slew of new U.S. and EU sanctions. It’s a move that is unprecedented by any crypto exchange, even as lawmakers and law enforcement have tried to push exchanges to become more proactive in targeting Russian ransomware gangs and other cybercriminals in recent years.

“This highlights how the compliance culture and the importance of compliance have been baked into the emergence of the U.S. crypto industry,” said Michael Parker, a former federal prosecutor in the DOJ’s money laundering and asset recovery section.

• In a way, Coinbase’s decision to preemptively block these addresses shows what these exchanges are capable of in the fight against cybercrime. Before this, exchanges typically only blocked addresses after the Treasury Department sanctioned them, and they’ve pushed back against any legislative efforts to bring more transparency to transactions to fight cybercrime.
• Possible hurdles : Drew Schmitt, principal threat intelligence analyst at GuidePoint Security, said applying this preemptive strategy to cybercrime might not be as smooth since researchers and law enforcement often don’t have the information they need about “which addresses need to be blocked.” And preemptively blocking addresses could also open Coinbase and other companies to civil lawsuits.
• The war effect: Schmitt also noted that Coinbase might be making an exception in this one case because of the Western world’s galvanization against Russia. “Cryptocurrency and crypto providers, in general, have been hesitate to contribute to takedowns of suspected cybercrime and e-crime groups and wallets and stuff like that,” he said. “This speaks to the unity that these different organizations are feeling.”