Congress Considers Legal Ban on Huge Ransomware Payouts

 Last week, a bill was introduced in Congress to protect America’s finances from the threat of ransomware. This is coming in response to the ever-increasing rate of ransomware attacks in the US, with 121 incidents reported in just the first half of 2021.

What's Happening?

The senior Republican on the House Financial Services Committee, Patrick McHenry, introduced a bill on November 10 in the first session of Congress. The bill, which the North Carolina congressman named the “Ransomware and Financial Stability Act,” mandates financial firms to inform the US Treasury before making any ransomware payout to hackers. The bill also stated that firms would have to first get a nod of approval from the government before making payments above $100,000.

Why did Congress Introduce the Bill?

Congressman McHenry pointed out that ransomware payouts since 2020 have totaled more than $1 billion, using the May 7 attack on Colonial Pipeline as an example. This cyber attack caused the oil supply in the eastern United States to be shut down until the company paid the 75 bitcoin ransom requested. However, the FBI was able to recover 63.7 bitcoins from the attackers, identified to be the Darkside group.

He stated that as problematic as that event was,

“...it pales in comparison to what would happen if America’s critical financial infrastructure were to be taken offline.”

According to the congressman, the bill will help.

“...deter, deny, and track down hackers who threaten the financial institutions that make the day-to-day economic activity possible. The legislation will also provide long-overdue clarity for financial institutions that look to Congress for guidance as ransomware hacks intensify.”

Another selling point for the bill was that it would create a clear roadmap for financial firms that get hit by ransomware attacks and help them respond adequately to any incident.

How Does This Affect Companies Attack with Ransomware?

The proposed Ransomware and Financial Stability Act is limited to Financial Market utilities and companies in the financial sector such as large securities exchanges and some third-party technology providers that partner with banks for their core processing services.

The bill would:

• Mandate companies to inform the US Treasury Department before making any payout to ransomware attackers.
• Make it illegal for firms to make ransomware payouts above $100,000 unless they obtain a Ransomware Payment Authorization from law enforcement authorities or if the Presidency decides that it is in the nation’s best interest to pay.
• Ensure that the affected company’s information remains confidential even after notifying the authorities of an attack.
• Give firms clarity on how to handle ransomware attacks.

Not everyone agrees that this is the right way to go about the problem, though. In a hearing before the Senate Judiciary Committee in July, FBI Cyber Division Assistant Director Bryan Vorndran stated that although the FBI discourages victims from making ransom payments, it is still their position that “...banning ransom payments is not the road to go down.”

Vorndran said that,

“If we ban ransom payments now, you're putting U.S. companies in a position to face yet another extortion, which is being blackmailed for paying the ransom and not sharing that with authorities.”

In his statement, he made it clear that,

“...one of  the  most important things  Congress  can  do  to assist  the  U.S. government’s  fight against  ransomware  is  to  pass  a national  cyber  incident  reporting standard.” 

The Assistant Director went on to say that mandatory reporting of ransomware incidents by affected companies would go a long way in protecting both national and cybersecurity.