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U.S. Treasury warns cyber insurers payments to hackers may violate sanctions
Oct 1, 2020
(Reuters) - Cyber insurers and other financial institutions that facilitate payments to hackers to end cyberattacks risk running afoul of sanctions rules, the U.S. Treasury Department warned on Thursday.
FILE PHOTO: A hooded man holds a laptop computer as blue screen with an exclamation mark is projected on him in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration
The warnings, which referenced malicious programs known as ransomware, came in advisories from Treasury’s Office of Foreign Assets Control (OFAC)and Financial Crimes Enforcement Network (FinCEN).
Hackers use ransomware to take down systems that control everything from hospital billing to manufacturing. They stop only after receiving hefty payments, typically paid in cryptocurrency.
The warnings add another layer of concern for cyber insurers, who have been ramping up rates and trying to curb exposure to vulnerable customers because of surging costly ransomware claims in recent years.
Cyber policies often cover ransom, data recovery, legal liabilities and negotiators fluent in hackers’ native languages.
Ransomware payment demands have increased during the pandemic as people work remotely and hackers target online systems.
The average ransomware payment jumped by 60% to $178,254 between the first and second quarters, according to Coveware a firm that helps negotiate and facilitate cyber ransom payments.
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