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SEC Briefed on Quantum Threat That Could Break Crypto Encryption

Key Takeaways

  • ​A proposal to the SEC warns that quantum computers could break the encryption securing cryptocurrencies like Bitcoin and Ethereum;
  • The "Harvest Now, Decrypt Later" risk suggests attackers may be saving encrypted crypto data to exploit once quantum tech advances;
  • The framework urged that regular security checks and a gradual shift to quantum-resistant encryption.

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SEC Briefed on Quantum Threat That Could Break Crypto Encryption

The US Securities and Exchange Commission (SEC) has received a proposal warning that cryptocurrencies like Bitcoin BTC $111,389.47 and Ethereum ETH $4,352.56 could be vulnerable to future quantum computing attacks.

The submission came from Daniel Bruno Corvelo Costa and was addressed to the SEC’s Crypto Assets Task Force.

The document, titled the Post-Quantum Financial Infrastructure Framework (PQFIF), outlines how digital asset systems might defend themselves from quantum computers that could one day crack the encryption methods used to secure crypto assets.

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At the core of the concern is the possibility that quantum machines, once powerful enough, could break the cryptographic tools that keep crypto funds secure.

The proposal noted that current encryption methods protect a huge amount of value, and failure could result in investor losses and disruptions to exchanges and wallet providers.

A concern raised is the strategy known as "Harvest Now, Decrypt Later". In this scenario, attackers store encrypted data today and wait for future quantum breakthroughs to access it. The PQFIF urged early action before that window of opportunity opens.

The framework recommends regular checks to identify weaknesses in platforms that hold or manage crypto assets. High-value systems, such as centralized exchanges and institutional wallets, should be prioritized.

Once weak areas are found, platforms could begin shifting to quantum-safe algorithms. This would include a mix of current encryption methods and new approaches designed to resist quantum attacks.

Recently, Justin Drake, a researcher at the Ethereum Foundation, introduced a proposal called "Lean Ethereum". What did it say? Read the full story.

Aaron S. Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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