In Letter to Senator Hassan, IRS Shares How Increased Disclosure Policies Can Help Counter Cyberattacks

WASHINGTON – Following Senator Maggie Hassan’s (D-NH) call for action in the aftermath of the cyberattack on the Town of Peterborough, the Internal Revenue Service (IRS) shared with Senator Hassan multiple ways that Congress can help combat the illicit use of cryptocurrencies. The IRS’s response to Senator Hassan, a member of the Homeland Security and Governmental Affairs Committee, follows her call to the IRS and other federal agencies to address current aspects of the cryptocurrency market that allow for criminal usage, such as what was seen in the cyberattack on Peterborough. In August 2021, thieves stole $2.3 million in taxpayer dollars, almost all of which was converted into cryptocurrency rendering it nearly impossible to recover.

In her original letter to the IRS, Senator Hassan discusses how lax requirements create anonymity that facilitates criminal use of cryptocurrency. In the agency’s response to the Senator, the IRS shared how strengthening disclosure rules for buying and selling cryptocurrencies and requiring additional information for customers using cryptocurrency exchanges - similar to what is currently used at traditional banks - could help prevent future cyberattacks. 

“Cyberattacks like the one we saw in Peterborough last summer are not an anomaly, they are our new reality. We must make sure that state and local governments have the tools and resources they need to prevent such cybercriminals from gaining access to our online systems and taxpayer dollars,” said Senator Hassan. “I look forward to working in Congress and with the administration to crack down on criminals who seek to use cryptocurrency to hide illicit activity.”

Senator Hassan has worked across the aisle to strengthen cybersecurity. Senator Hassan’s bill, the State and Local Cybersecurity Improvement Act, created a state and local cybersecurity grant program as part of the bipartisan infrastructure law. The law authorizes a new grant program at the Department of Homeland Security dedicated to improving cybersecurity for state, local, tribal, and territorial entities and is set to provide at least $10 million to New Hampshire. Senator Hassan also got signed into law her bipartisan amendment to the 2021 National Defense Authorization Act to create a cybersecurity state coordinator in each state. 

Read the Senator’s original letter here and the IRS’s response to Senator Hassan here.

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