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Treasury blocks Chinese‑sponsored AI on state devices, seeks cyber funds and says crypto investments remain off the table
Summary
Treasury told the committee it has banned certain China‑sponsored AI apps (DeepSeek) and TikTok on Treasury devices, reported 200 million firewall attempts last year and requested an additional $200,000 for cyber operations; the office said it is not prepared to invest state funds directly in cryptocurrency.
Treasury officials told the committee they have blocked DeepSeek and TikTok on Treasury‑issued devices and that the department is prioritizing cybersecurity work as attacks and illicit targeting rise.
"DeepSeek and other platforms like TikTok... because they're sponsored by the CCP, they pose a significant security risk," Treasurer Garrity said, noting that an AI tool that can ingest data presents a higher threat profile. Garrity said Treasury’s firewalls recorded about 200 million attempted intrusions last year and that the department requested an additional $200,000 in cyber appropriation for expanded operations and monitoring.
Garrity told members the Treasury treats cybersecurity as a top priority because the agency handles a high volume of financial transactions and personally identifiable information for programs such as PA 529 and PA ABLE. The department also educates bureaus about fraud indicators and partners with state and national peer groups on best practices.
On digital assets, Garrity said Treasury is watching developments but that state pension and treasury fiduciary standards ("prudent person" and sole‑purpose duties) make direct crypto holdings inappropriate for now. She said any crypto exposure, if considered in the future, would likely be via regulated ETFs and not direct coin holdings; Treasury is also exploring third‑party vendor models to accept crypto as a payment method for some services, with conversion to cash before it reaches state bank accounts.
Committee members asked how the legislature could help; Garrity said informational briefings and continuing appropriation support for cyber operations would be helpful. No vote or policy change was taken at the hearing.
