The Cyberlaw Podcast: Ransomware—Death and Diplomacy

Stewart Baker
Tuesday, October 5, 2021, 1:53 PM

Published by The Lawfare Institute
in Cooperation With

This is the meatiest episode in a long time, as Dmitri Alperovitch, Dave Aitel, and Mark MacCarthy go deep on the substance of a dozen stories or more.

First up, Dmitri and I speculate on possible outcomes from the newly announced administration plan to convene 30 countries to crack down on ransomware. We also report on what may be the first conformed death resulting from the equipment failures caused by ransomware—a newborn strangled by its umbilical cord without the usual electronic warnings.

Dmitri also recaps and explains a new cryptocurrency regulatory topic that doesn’t concern its use in ransomware schemes—the move to ensure the financial stability of stablecoins.

Dave weighs in on two surprising provisions of the House intel authorization bill. The first would respond to the Project Raven incident by imposing new controls on ex-spies working for foreign governments. No one is against the idea, but no one thinks that the problem is limited to alumni of a few intelligence agencies. And the bill’s sweep is far broader than cases like Project Raven. I make the argument that it may criminalize ex-spies giving security advice to Airbus, or perhaps even the Atlantic Council.

The second imposes reporting requirements on U.S. government purchases of vulnerabilities from foreign vendors. This leads to a discussion of which nation has the best offensive talent. Dave thinks the old champ has been decisively dethroned.

In other legislative news, Dmitri covers the three committees producing bills to require cyber incident reporting, with special emphasis on the recently leaked bill from Senate Intel.

It’s a very aggressive bill, perhaps designed to stake out negotiating room with the Homeland committees. I ask, “What’s the difference between Europe’s staggering fines for General Data Protection Regulation (GDPR) violations and the fines for violating U.S. cyber reporting obligations?” The answer: about two weeks, at which point the maximum fine due to the U.S. will exceed the top European fine.

Mark gives an overview and some prognostication about Google’s effort to overturn the EU’s $5 billion antitrust fine for its handling of Android.

Dmitri and I find ourselves forced to face up to the growing soft power of Russia and China, which are now increasingly forcing Silicon Valley companies to project Russian and Chinese power into the West. Russia, having forced Apple and Google to send hostages in the form of local employees, are trying to use their leverage to control what those companies do in countries like Germany. And Linkedin, the last Western social media company still standing in China, is trying to keep that status by asking Americans to self-censor their accounts.

At Dave’s request, we visit a story we missed last week and explore all the complex equities at work when the FBI decides whether to use ransomware keys for remediation or disruption.

Mark gives an overview of the new Federal Trade Commission, where regulatory ambition is high but practical authority weak, at least until the Senate confirms a third Democratic commissioner.

Waiting in the wings for that event is even more antitrust action, possible new online privacy rules and Commissioner Slaughter’s enthusiasm for addressing racial equity quotas under the guise of algorithmic fairness.

Dmitri offers his best guess about the recent Russian arrest of a cybersecurity executive for treason (that’s the second in five years if you’re counting) and the U.S. decision to send a Russian scammer back to Russia after bitterly fighting to extradite him from Israel (it’s the magic of time served awaiting extradition, I speculate).

In quick hits:

  • Dmitri makes a public service announcement about the ways that Two-Factor Authentication (2FA) can be subverted.
  • I celebrate some good news for the U.S.: China is planning to encourage provincial controls on the design and use of user algorithms. That’s bound to give US companies a new competitive advantage in a field where TikTok has passed them.
  • Dave and I dissect the guilty plea of former Ethereum developer Virgil Griffith to violating U.S. sanctions to offer a bland speech on cryptocurrency in North Korea.
  • I give the highlights of two new and eminently contestable cyberlaw rulings:
    • In U.S. v. Wilson, the Ninth Circuit decided that law enforcement needs a warrant to open files that it knows from hashes are 99.9 percent certain to be child porn. The decision would be unfortunate if it weren’t meaningless; the hash itself provides probable cause, so warrants will be quickly and routinely issued. Thanks for the make-work, EFF!
    • And a magistrate judge clearly gunning for promotion has written a Stored Communications Act opinion that would fill me with concern about the way it empowers Silicon Valley’s biased Trust and Safety operatives to de-platform people and then turn their posts over to law enforcement without the subpoena they usually demand. I would worry more about those troubling consequences if I thought the opinion would survive.
  • And, finally, Dmitri is pleased to find one field where AI is succeeding without controversy, as machine learning declares a famous Peter Paul Rubens painting, Samson and Delilah, to be a fake. But how long, I wonder, before this AI is forced by the FTC to correct its notorious anti-Flemish bias?

And more!

Stewart A. Baker is a partner in the Washington office of Steptoe & Johnson LLP. He returned to the firm following 3½ years at the Department of Homeland Security as its first Assistant Secretary for Policy. He earlier served as general counsel of the National Security Agency.

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