US partners with Israel to tackle ransomware and regulate FinTech

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The United States partners with Israel through a new task force to identify a policy path that will promote growth and healthy competition in the rapidly expanding financial services technology market while deterring ransomware and other cyber threats, according to the Treasury Department.

“Harnessing both the power of international cooperation and technological innovation will position us to support economic competitiveness, prosperity and to fight global threats, including ransomware,” said Deputy Treasury Secretary Wally Adeyemo in a press release from Jerusalem. “As the global economy recovers and ransomware and other illicit financial threats pose a serious challenge to Israel and the United States, increasing information exchange, joint work and collaboration on policy, regulation and enforcement are essential to our economic and national security objectives. “

Adeyemo met this weekend with Israeli Finance Minister Avigdor Lieberman, Central Bank Governor Amir Yaron, Director General of Israel’s National Directorate of Cyber ​​Security Yigal Unna and local entrepreneurs in financial technology and cybersecurity, according to one. Treasury statement published Monday. Discussions focused on “economic opportunities, shared national security priorities, including Iran, the fight against terrorist financing and proliferation financing, and regional terrorist threats,” the Treasury said. .

His visit follows a summit the Biden administration hosted last month with representatives from 32 countries and the European Union on tackling ransomware. Israel attended the meeting where Adeyemo stressed the need for international cooperation to disrupt the ransomware business model by preventing the abuse of virtual currencies.

The task force is part of a strategy the administration is pursuing that involves global and interagency collaboration and links cybersecurity with human rights, trade and broader national security considerations.

Adeyemo’s office worked through the Treasury’s Financial Crimes Enforcement Network to identify virtual currency exchanges to sanction for facilitating ransomware payments. The Treasury has repeatedly warned other financial services entities such as insurance companies that they also run the risk of sanctions violations by making ransomware payments to entities that may be linked to schemes put on. blacklist like Iran and North Korea.

The US-Israel collaboration has been overshadowed by recent US actions against the notorious Israeli surveillance firm, the NSO Group, but supporters say the new partnership is relevant given Israel’s place in the FinTech ecosystem.

NSO’s woes have worsened since it was listed as a Commerce Entity Requiring a Special License to Receive Goods or Services from US Suppliers. The CEO of the company stepped down on Thursday and Wall Street is apparently concerned that the company will not be able to repay its debts. But Israeli companies are a big part of a booming financial services technology, or fintech, market. Israel has taken third place in recent global FinTech rankings, behind the United States and the United Kingdom.

FinTech companies have been particularly successful during the pandemic given the increased demand for digital financial services in remote environments. But some of them, especially those related to virtual currencies, have allowed ransomware authors to evade law enforcement and threaten critical infrastructure. And a recent breach by financial investment firm Robinhood, which exposed the personal information of millions of clients, highlighted the generally unregulated nature of the space compared to the traditional banking industry where “reasonable” security is. governed by the Gramm-Leach-Bliley Act.

In Israel, meanwhile, open banking legislation that could require banks to share consenting customer information with fintech startups – an effort to put consumers at the center of transactions involving their data – is gaining momentum after years of inaction. But the banks resisted, citing security concerns. In the United States, the banking industry has expressed support for adding legislation to the National Defense Authorization Act that “would harmonize the new incident reporting requirements with existing laws and regulations.”

Adam Flatley, Cabinet Director of Threat Intelligence [redacted] and a member of a key US ransomware task force, told Nextgov it made sense for the administration to partner with Israel to resolve political issues in the fintech space.

“Israel has long focused on security in the fintech space, and there are a lot of fintech companies in Israel,” he said. “They have the talent and the experience to be good and effective partners in this space. It’s also important to stress that this is likely to be just one of the many bilateral relationships created in the fight against ransomware actors, and that it will be important to create many more with countries around the world. who will each have the capacity to impact cybercrime in their own spheres of influence.

The Treasury said the US-Israel task force will develop a memorandum of understanding on “supporting (1) sharing authorized information related to the financial sector, including cybersecurity regulations and guidelines, cybersecurity incidents and information on cybersecurity threats; (2) staff training and study visits to promote cooperation in the area of ​​cybersecurity and the financial system; and (3) skills building activities such as conducting cross-border cybersecurity exercises related to financial and investment flows of global financial institutions.

There will also be a series of technical exchanges on policy and regulation, including with “cyber analytics companies, fintech and regtech innovators,” the Treasury said, adding that in this vein, the department plans to participate in the CyberTech Global Tel Aviv conference in Israel. in January 2022.

Flatley, who spent more than a decade as a technical officer at the National Security Agency, said: “International partnerships are going to be absolutely critical in the battle against ransomware players.

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