Channel Island hacking activity post invasion of Ukraine
Tue 29 Mar 2022
Russia’s invasion of Ukraine has had a widespread impact across the world in countless ways, from disrupting supply chains, causing a refugee crisis and throwing parts of the global financial system into disarray. While the Channel Islands may only have a small population of around 170,000, the financial service sector is extremely important to the economies of these islands.
According to data from Savills, the financial services sector accounts for 22% of employment in both Guernsey and Jersey and makes up 40% of Guernsey’s Gross Value Added (GVA) and 41% of Jersey’s GVA. Due to their position as major offshore financial centres and perceived ‘tax haven’ status, a great deal of funds are stored within their financial jurisdiction from individuals based in countries across the world, including Russia.
Security experts are growing increasingly concerned that Russian cyber criminals and hackers will attack the Channel Islands in response to the sanctions imposed by the UK on Russia. A number of high-profile allies of President Putin and Russian banks have seen their assets frozen by the Channel Islands.
According to Jersey’s External Relations Minister, Senator Ian Gorst, officers on the islands are working closely with the relevant UK authorities to ensure their response follows the international community. He says –
“We take our obligations as a responsible jurisdiction extremely seriously and these new designations will take effect immediately. Any assets held in Jersey in relation to these individuals and financial institutions must be frozen without delay.”
Remote working during the pandemic has also contributed to hackers finding it easier to successfully breach cyber defences in the Channel Islands. As home systems may not have the level of security as offices, criminals can gain access to sensitive networks.
While cyber attacks are not a new phenomenon in the Channel Islands, the threat from sophisticated criminals makes this development a serious escalation. Last year, before the Russian invasion, the head of the UK’s National Cyber Security Centre (NCSC), Lindy Cameron, warned that Russia was responsible for a number of “devastating” ransomware attacks in the UK.
Perhaps most concerningly, a survey from the Jersey Financial Services Commission (JFSC) found that 32% of local financial services companies do not have a cyber incident response plan in place.
With data from Guernsey firm Black Arrow Cyber Consulting, showing the Channel Islands see more than 10 million cyber attacks every month, the threat from hackers is significant.
Phishing emails are one of the leading ways businesses in the Channel Islands are being targeted, which can trick users into entering sensitive details on a hackers website. The impact of a successful attack can be devastating for companies and take months or even years to fully recover.
These financial attacks are often extremely lucrative for hackers with Russian links. Research from Chainalysis discovered that 74% of all money taken through ransomware attacks in 2021 directly went to groups “highly likely to be affiliated with Russia.” A total of more than $400 million in cryptocurrency is said to be received by these groups.
In response to this new challenge, the Guernsey Financial Services Commission has called on businesses to ensure they have advanced cyber security software deployed. All employees, too, need to be trained on how to identify potential hacking events, including phishing emails, as this is an area where no amount of security software will work to stop the cyber challenge.
There are no signs that these threats are going to subside at any point in the near future, with hackers having a strong financial incentive to continue. Even at organisations that have solid cyber defences, it is still possible for hackers to breach these firewalls and damage a company’s infrastructure.