At a glance.
- Financial firms prepare for SEC’s new incident reporting proposals.
- What Biden’s EO means for the future of cryptocurrencies.
Financial firms prepare for SEC’s new incident reporting proposals.
The US Securities and Exchange Commission’s (SEC) recently proposed cybersecurity disclosure rules for financial institutions could require company directors to divulge extensive details about how their boards operate and mitigate cybersecurity risks. In addition to reporting cyberincidents to the SEC and developing clear attack-response strategies, the SEC proposes that company directors must disclose specifics regarding the cybersecurity expertise of their board members (or lack thereof), and how the board integrates cybersecurity into their overall leadership of the company. As the Wall Street Journal notes, this could be a tall order, given that a recent survey conducted by Code42 Software Inc. found that 91% of the cyber and technology executives surveyed feel their boards need a better understanding of internal cybersecurity threats. Scott Kimpel, who previously served as counsel to former SEC Commissioner Troy Paredes, agrees that financial firms will need to invest much time and effort into meeting the new proposed demands. “I think there’s going to be some heavy lifting to do here to get prepared,” Paredes stated.
What Biden’s EO means for the future of cryptocurrencies.
US President Joe Biden last week issued his long-awaited executive order on cryptocurrency, and Digital Shadows breaks down exactly how the EO could impact the country’s approach to the regulation of digital currencies. Though some experts argue the EO is lacking in specific details regarding regulation, the major takeaway is that generally, the administration supports the adoption of cryptocurrency and wants to focus on how digital currency can bolster the US’s position as a global financial leader. Crypto advocates worry that government regulation could hinder the growth of the market, but Biden’s EO focused mainly on the positives of cryptocurrency.
That said, the order does call for cracking down on the use of digital currency in cybercrime. Cryptocurrency has become a go-to for criminals seeking a way to conduct illicit transactions with anonymity, and in the midst of the war between Russia and Ukraine, Western leaders worry digital currency might provide a means for Russia to circumvent financial sanctions. The EO also prioritized researching the development of US central bank digital currencies (CBDCs), which some experts worry might be a flawed attempt at centralizing a market that, at its essence, is defined by its decentralization. Biden also highlighted the need to examine the impact of crypto-mining on the environment, as bitcoin’s energy-intensive proof of work mechanism has garnered global criticism, with China and Russia proposing bans on bitcoin, and the EU’s Crypto Bill calling for ways to cut back on the proof of work process. Though Biden didn’t detail any specific strategies for the US, one solution might be to rely on more environmentally friendly blockchains like Cardano and Nano, and Ethereum plans to switch to a proof of stake system that could drastically reduce energy consumption. In general, Biden’s EO tells us that for now, his administration will be focused on research and assessment, and we shouldn’t expect any sweeping changes to crypto regulation, at least not any time soon.