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Four States Propose Laws to Ban Ransomware Payments

New York, North Carolina, Pennsylvania, and Texas all have pending legislation that would ban or severely restrict organizations from paying a ransom to a ransomware group. The proposed New York bill prohibits government, business, and health care entities from paying a ransom in the event of a cyber-attack. New York is the only state proposing a law that includes private sector businesses, prohibiting them from paying a ransom. The other three states are proposing a ban that would only prohibit the use of state and local funds to pay a ransom. This ensures that local government agencies, including school districts, do not have available funds to pay ransoms demanded from cyber threat actors. Although these are the only states currently with proposed bans, many others are likely to follow. Following the Colonial and JBS attacks, several government officials have asked Congress to create similar bans at the federal level. The FBI recommends that an organization never pay a ransomware group as it only emboldens the threat actors.

Analyst Notes

Threat Researchers and Cybersecurity experts have varying opinions on whether ransomware bans should be mandated by the US Government. On the positive side, it may put an immediate stop to the flow of money ransomware groups have been collecting, if businesses abide by the law. However, the ramifications and aftereffects to businesses that are no longer able to recover their encrypted files or prevent the release of stolen data could be detrimental in some cases. Additionally, there are fears that an outright ban may create a market for unscrupulous service providers to make payments for desperate companies that are trying to circumvent new legislation. Alternatives to banning ransom payments involve mandatory reporting requirements. Mandatory reporting would need to be paired with a notification and response system as well, in order to provide immediate aid to victims of ransomware. The best defense against ransomware is to implement internal security controls and monitoring, as well as educate and empower employees, so that attacks can be stopped in the early stages before files are stolen and encrypted. To protect against ransomware attacks, organizations should regularly back up data, air gap, and password protect backup copies offline. Ensure copies of critical data are not accessible for modification or deletion from the system where the data resides. Implement network segmentation. Implement a recovery plan to maintain and retain multiple copies of sensitive or proprietary data and servers in a physically separate, segmented, secure location (i.e., hard drive, storage device, the cloud). Install updates/patch operating systems, software, and firmware as soon as practical after they are released. Implement monitoring of security events on employee workstations and servers, with a 24/7 Security Operations Center to detect threats and respond quickly. Use multifactor authentication where possible. Use strong passwords and regularly change passwords to network systems and accounts, implementing the shortest acceptable timeframe for password changes. Avoid reusing passwords for multiple accounts. Focus on cyber security awareness and training. Regularly provide users with training on information security principles and techniques as well as overall emerging cybersecurity risks and vulnerabilities.