Swift Quoted in Legaltech News About Impact of U.S. Treasury Department Sanctions in Ransomware Payments

07 August 2020 Legaltech News News
Partner Christopher Swift was quoted in the Legaltech News article, “Treasury Department Potentially Making Ransomware Payments More Complicated — and Costly,” which discussed how companies impacted by ransomware also need to think about  U.S.Treasury Department sanctions when deciding whether to pay ransomware. The Office of Foreign Assets Control, a financial intelligence and enforcement agency within the U.S. Treasury Department, maintains a Specially Designated Nationals and Blocked Persons List of groups or individuals that U.S. persons are “generally prohibited from dealing with,” which includes the payment of cryptocurrency ransoms. While OFAC has yet to levy penalties against businesses who pay ransom to an SDN list entity, companies in the midst of a cyber crisis may still have to proceed carefully.

Swift noted that a business could very quickly see its financial exposure rise beyond a hypothetical million-dollar ransom. “Not only have you paid a million dollars to a criminal group … the penalties when the Treasury Department finds out about it and comes after you are going to be anywhere from $300,000 to $2 million on top of the ransom you just paid, plus the cost of attorneys’ fees,” he said.

But the calculus that a company faces when deciding whether to pay a cryptocurrency ransom to an actor on the SDN list also extends beyond the financial considerations involved. Like many other types of cyber incidents, Swift pointed out that there’s a reputational element that a business has to consider when being publicly seen as doing business with a criminal or potentially even a terrorist organization.

Some businesses may also find unexpected value in consulting with their information technology departments about the full extent of their backups, which Swift thinks can often extend further than a business’ leadership knows. “IT departments tend to save a lot of data. Their sort of culture and outlook is built around saving and sustaining data. They save stuff they don’t need to save,” Swift said.

Insights

What’s Next for Blockchain and Crypto?
01 December 2022
Innovative Technology Insights
Case Law Update: Disputes Relating to Supply Chain Disruptions Hit the Courts
01 December 2022
Manufacturing Industry Advisor
Foley Partner André Thiollier Moderates Global Venture Market Session at BayBrazil Conference
01 December 2022
Foley Ignite
Podcast Episode 96: Eric Williams, Associate
01 December 2022
Foley Career Perspectives
What You Should Know About Payor/Provider Convergence
25-26 January 2023
Los Angeles, CA
ATA EDGE2022 Policy Conference | American Telemedicine Association
7-9 December 2022
Washington, D.C.
CLE Weeks
5-16 December 2022
Milwaukee, WI
Foley Sponsors Ernst & Young Entrepreneur of the Year® Program
1 December 2021 - 30 November 2022
Michigan and Northwest Ohio Region