Podcast: “The National Security Challenges of Ransomware and Cryptocurrency”
This intro to the podcast was written by my colleague, Professor Shane Stansbury, who also moderated the panel:
As many readers know, ransomware is a serious and growing problem not only for U.S. businesses, but also for our national security. Last year’s Colonial Pipeline attack, which caused fuel shortages throughout the Southeastern United States, was a vivid reminder of the degree to which U.S. critical infrastructure has been targeted. In fact, last year 14 of 16 critical infrastructure sectors were targeted by ransomware attacks, causing losses and disruption for entities ranging from hospitals to municipal governments.
The financial impact alone is staggering. According to the U.S. Treasury Department’s Financial Crimes Enforcement Network, $590 million in reported suspicious activity related to ransomware in the first six months of 2021, exceeding the entire amount in 2020. As I recently pointed out in testimony before the U.S. Senate Banking Committee, one of the key drivers of this surge is cryptocurrency—the payment of choice for ransomware perpetrators looking for a convenient and reliable way to obfuscate their activity.
But why exactly does cryptocurrency play such an important role in ransomware attacks? And what role could cryptocurrency play with respect to other threats to our national security, such as the evasion of sanctions by covered Russian individuals and entities?
At this year’s 27th Annual LENS Conference, I had the opportunity to speak with three of the best in the business when it comes to answering these kinds of questions. Even better, they provided three very different perspectives—from industry, government, and academia.
From industry, we were joined by Ari Redbord, the Head of Legal & Government Affairs at TRM Labs, a leading analytics company that advises clients on matters relating to cryptocurrency-related fraud and other financial crimes. Mr. Redbord is also a veteran of government, having served a federal prosecutor for 11 years and at the Treasury Department as a Senior Advisor to the Deputy Secretary and the Under Secretary for Terrorism and Financial Intelligence.
We were also fortunate enough to get a law enforcement perspective from Jessica Nye, the Supervisor of the FBI Cyber Squad in Raleigh, NC. Special Agent Nye has a wealth of experience leading cyber-related investigations, having previously worked for eight years on the Baltimore Field Office’s Cyber Squad and for two years at FBI Cyber Division Headquarters in Washington D.C.
Finally, we were joined by Duke Law’s own Lee Reiners. Professor Reiners is the Executive Director of the Global Financial Markets Center and teaches in the areas of FinTech and financial regulation. In recent years, he has become a leading voice on matters relating to cryptocurrency and the regulation of digital assets. (If you missed his recent post on the relationship between cryptocurrency and Russian sanctions, please do yourself a favor and give it a read.)
All three guests offered exceptional insights on ransomware, cryptocurrency, and their implications for national security. Whether you are new to these subjects or are well-versed and simply want to know more, it is worth your time to learn from these seasoned pros. Our discussion covered topics ranging from the basics of how ransomware works to the role of cryptocurrency in sanctions evasion and the U.S. government’s current efforts to disrupt the ransomware industry.
The video of our panel discussion is available here. If you were not able to join us for the conference, please give it a watch/listen. You will be glad that you did.
Remember what we like to say on Lawfire®: gather the facts, examine the law, evaluate the arguments – and then decide for yourself!