Since October is National Cybersecurity Awareness Month, FinCEN and OFAC have published advisories aiming to increase cybersecurity awareness and aid institutions in responding and reporting incidents.
The FinCEN Advisory – Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments
The advisory provides information on: (1) the role of financial intermediaries in the processing of ransomware payments; (2) trends and typologies of ransomware and associated payments; (3) ransomware-related financial red flag indicators; and (4) reporting and sharing information related to ransomware attacks.
Red flag indicators listed in the advisory are:
- IT enterprise activity is connected to cyber indicators that have been associated with possible ransomware activity or cyber threat actors known to perpetrate ransomware schemes. Malicious cyber activity may be evident in system log files, network traffic, or file information.
- When opening a new account or during other interactions with the financial institution, a customer provides information that a payment is in response to a ransomware incident.
- A customer’s CVC (Convertible Virtual Currency) address, or an address with which a customer conducts transactions, appears on open sources, or commercial or government analyses have linked those addresses to ransomware strains, payments, or related activity.
- A transaction occurs between an organization, especially an organization from a sector at high risk for targeting by ransomware (e.g., government, financial, educational, healthcare), and a DFIR (Digital Forensics and Incident Response) or CIC (Cyber Insurance Companies), especially one known to facilitate ransomware payments.
- A DFIR or CIC customer receives funds from a customer company and shortly after receipt of funds sends equivalent amounts to a CVC exchange.
- A customer shows limited knowledge of CVC during onboarding or via other interactions with the financial institution, yet inquires about or purchases CVC (particularly if in a large amount or rush requests), which may indicate the customer is a victim of ransomware.
- A DFIR, CIC, or other company that has no or limited history of CVC transactions sends a large CVC transaction, particularly if outside a company’s normal business practices.
- A customer that has not identified itself to the CVC exchanger, or registered with FinCEN as a money transmitter, appears to be using the liquidity provided by the exchange to execute large numbers of offsetting transactions between various CVCs, which may indicate that the customer is acting as an unregistered MSB.
- A customer uses a CVC exchanger or foreign-located MSB in a high-risk jurisdiction lacking, or known to have inadequate, AML/CFT regulations for CVC entities.
- A customer initiates multiple rapid trades between multiple CVCs, especially AECs (Anonymity-Enhanced Cryptocurrencies), with no apparent related purpose, which may be indicative of attempts to break the chain of custody on the respective blockchains or further obfuscate the transaction.
The advisory also reminds institutions of their obligations to report activity involving ransomware on Suspicious Activity Reports.
This is a good advisory to share with all the institution’s staff.
The OFAC Advisory – Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments
The Advisory states that demand for ransomware payments has increased during the COVID-19 pandemic as cyber actors target online systems that U.S. persons rely on to continue conducting business. Companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response, not only encourage future ransomware payment demands but also may risk violating OFAC regulations. The advisory describes these sanctions risks and provides information for contacting relevant U.S. government agencies, including OFAC, if there is a reason to believe the cyber actor demanding ransomware payment may be sanctioned or otherwise have a sanctions nexus.
This is a good advisory to share with the institution’s BSA and Risk Management staff.
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