Christopher Ballod Speaks With Legaltech News About Impact of U.S. Treasury Sanctions on Payment of Cryptocurrency Ransoms
Philadelphia, Penn. (August 10, 2020) - Data Privacy & Cybersecurity Partner Christopher E. Ballod recently spoke with Legaltech news (part of Law.com) for an article titled “Treasury Department Potentially Making Ransomware Payments More Complicated – and Costly,” which discusses how U.S. Department of Treasury sanctions may impact companies’ decisions regarding paying cryptocurrency ransoms following a ransomware attack.
As the article describes, the Office of Foreign Assets Control (OFAC), an enforcement agency within the U.S. Treasury Department, maintains a Specially Designated Nationals (SDN) and Blocked Persons List, which prohibits U.S. companies from “dealing with” certain groups and individuals. Companies that pay a cryptocurrency ransom to an SDN-listed entity could face penalties. The threat of penalties thus complicates a company’s decision to pay a ransom, particularly when the company cannot identify the entity or individual who is responsible for a ransomware attack.
Mr. Ballod told Legaltech that in many cases, a company is able to identify the type of ransomware involved in an attack, but not the attacker. He explained that forensic agencies have started forming theoretical links between types of ransomware and specific malicious actors, although these links do not constitute concrete evidence. “A couple of opinions on what’s probably just open-sourced intelligence doesn’t mean it’s clearly tied,” he noted.
Mr. Ballod further described that companies that have suffered a ransomware attack often must quickly determine the value of the data being held captive in order to decide whether to pay a ransom. “One case that I had, it [was] 45 years of intellectual property and the company was shut down for 6,000 employees overnight,” he explained.
Mr. Ballod, CIPP/US, CIPP/E, is a vice chair of Lewis Brisbois’ award-winning Data Privacy & Cybersecurity Practice, and a member of its Corporate and Complex Business & Commercial Litigation Practices. He regularly counsels clients on the prevention of data breach incidents, as well as during the response and notification process after an incident occurs, and is a frequent commentator on the intersection of cybersecurity and the law. He is also a regular contributor to Lewis Brisbois’ Digital Insights blog.
You can read the full article on Legaltech news here (subscription may be required).