Key Lawmaker: Digital Passport Only Way to Deter Crypto Use for Ransomware Attacks

During a hearing that highlighted the dual-sided implications technology often creates for privacy and security, Rep. Bill Foster, D-Ill., promoted the idea of regulating cryptocurrency exchanges by implementing a digital passport, saying it’s the only way to make the industry less attractive to perpetrators of ransomware attacks and other transnational crime.

“You're ultimately going to need to have a uniquely identified, biometrically de-duped crypto driver's license, as it were, if you're really going to prevent it from being used for ransomware and all this sort of thing,” Foster said. “That's going to involve setting up very much like I guess a passport system,” he said, noting, “one of the tough things that we're going to face as a government is sharing data with other governments.”

Foster is chair of the House Science Committee’s panel on investigations and oversight. His comments during a hearing the subcommittee held Wednesday on “privacy in the age of biometrics,” come as some of his fellow Democrats in the House and Senate push federal agencies to stop doing business with facial-recognition firm Clearview AI and generally spurn the technology. 

Privacy advocates fear authoritarian leaders in other nations, state governments and private-sector entities will be able to gain access to federal databases of individual’s biometric information for inappropriate surveillance and persecution. Their concerns are particularly acute after the Supreme Court’s decision to overturn Roe v. Wade. There are also issues with the technology’s accuracy in identifying people of color. But Foster discouraged its outright dismissal, noting the potential flip-side benefits for security. 

“Though we're all aware of some concerning aspects of biometric technologies, it's important to recognize that there are valuable uses for these technologies that can improve our lives and security,” he said, emphasizing that the purpose of the hearing was to investigate the viability of technology that promises to protect privacy and ensure federal policy is in line with its capabilities. 

Foster has proposed legislation—the Improving Digital Identity Act of 2021—which calls on federal agencies to harmonize national digital identity infrastructure by leveraging biometric databases states have been building to participate in REAL ID, a standard the federal government has put in place for accepting state-issued identification. He said the legislation would additionally explore “using this standard to make sure that these identity tools are interoperable, that it can be used for presenting that identity, both online and offline, in a privacy preserving way.” 

During the hearing Foster cast significant doubt on “privacy enhancing technologies,” or PETS. Based largely on homomorphic encryption, these refer to the use of algorithms to enable search and other functions to be conducted while the data is still scrambled in accordance with a particular code that can be shared for matching identities across databases. 

“Are they really ready for primetime?” he said, posing a question to witnesses from the National Institute of Standards and Technology and the National Science Foundation. “Things like homomorphic encryption … I've been told that there's still a privacy budget that you have to enforce … you can't just [interrogate] it repeatedly without at some point, revealing the underlying database. So there must be limits to these. Have we pretty much understood and hit the limits of these or is there a lot of work yet to be done to understand how effective it can be?”

The answer from NIST and NSF representatives—that the technology is promising but that there is indeed a lot of work to do—positions the agencies for increased resources through the America COMPETES Act, a massive funding vehicle for federally supported research and development of emerging technologies. The legislation is led by House Science Committee Chair Eddie Bernice Johnson, D-Tex. Lawmakers are currently resolving differences with Senate counterparts.