Is Paying Ransomware Extortion Illegal? Navigating the Legal and Ethical Minefield

The Expert Podcast

Introduction

• Recent news highlights major ransomware and cyber attacks, such as the CDK Automotive and AT&T hacks.
• These attacks impact millions and involve hackers locking down company systems.

How Ransomware Attacks Work

• Hackers infiltrate systems, lock them, and demand a ransom to restore access.
• Companies face the choice of paying the ransom or spending time and money to recover, often weighing the cost-benefit of paying.

Risks of Paying Ransoms

• Increased Ransom Demands
  • Hackers may increase ransom demands over time, potentially making it an unsustainable practice.
• Regulatory and Legal Risks
  • Foreign Corrupt Practices Act (FCPA)
    • This law prohibits bribes to foreign officials, which might extend to paying ransoms if hackers are linked to foreign governments.
  • Funding Illegal Activities
    • Ransom payments could inadvertently support terrorism or other illegal activities.
  • Money Laundering
    • Payments made through cryptocurrencies or complex transactions could be scrutinized for money laundering.

The Role of Cyber Liability Insurance

• Many companies use cyber liability insurance to handle ransom payments and mitigate legal risks.
• Insurance companies are adept at managing these transactions to avoid issues like bribery or money laundering.

Future Implications

• Increasing ransom payments might prompt government intervention.
• Potential for future regulations or prosecutions to deter companies from paying ransoms.

Case Study

• CDK Automotive hack involved a $25 million ransom paid in Bitcoin.

Conclusion

• The ongoing rise in ransomware payments and future government responses will shape how companies and hackers interact.

Call to Action

• Visit Actual Human and Describe.TV for more insights and expert consultations.
• Engage with experts in various fields, including investigations, insurance, business development, and more.

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