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Warning on Russian malware threat – Industry roundup: 12 September

Ukraine war “increases cybercrime attacks”

A sovereign Russian internet could lead to cybercriminal safe havens, greater confidence that large-scale attacks can be carried out without consequences, and intelligence blind spots, claims a report published by cyber risk analytics expert CyberCube.

The research “Ukraine Cyber War Update: Spotlight on activity six months later” examines the increased use of wiper malware by Russian threat actors. Unlike ransomware, it has no financial element but is designed to destroy data and systems. At the same time, Russia is focusing on deploying a completely independent, isolated, totalitarian internet network.

William Altman, CyberCube’s Principal Cyber Security Consultant, said: “A Russian sovereign internet has several potential implications for cyber activity. Rival nations will find it more difficult to acquire cyber threat intelligence on threat actors operating from inside Russia and might resort to more drastic measures to achieve this goal, potentially causing collateral damage. Furthermore, there is a potential for future “collaboration” between Russian, North Korean and Chinese internets, which would increase threat actors’ ability to launch attacks.”

The report looks at how, since Russia’s invasion of Ukraine on February 24, 2022, cyber warfare has been an important tool for assisting physical activity on the ground. It notes:

  • Russia is using ransomware gangs to undermine the US economy while avoiding direct war with the US. European energy companies are being targeted for strategic value.
  • Russian actors are targeting governments outside of Ukraine, aiming to gather intelligence on Western allies assisting Ukraine’s war effort.
  • Ransomware threat actors are focussing their efforts more on Russia than on other parts of the world.
  • Forward-looking (re)insurers are starting to adopt a threat-modelling approach to portfolio risk management. Reinsurers should look across their portfolios for indications that certain companies may be susceptible to different threat actors.

The report also looks at Lloyd’s of London’s recent requirement that all standalone cyberattack policies must exclude liability for losses arising from state-backed attacks.

Yvette Essen, CyberCube’s Head of Content, said: “CyberCube believes this mandate will help reduce uncertainty and enable more insurers to participate with confidence, based on a clearer understanding of what is covered, and what is excluded.”

A PDF of the report may be found here.

Energy crisis forces Germany to commit to LNG

Europe’s energy crisis is forcing Germany, its biggest economy, to sign fossil-fuel contracts that last decades as the country balances keeping the lights on and homes heated against meeting environmental targets, reports Bloomberg. However, for now the country is retaining its targets to become carbon neutral by 2045.

German utilities are seen signing more long-term fuel contracts. Energy providers from Uniper SE to RWE AG have already signed long-term agreements with liquefied natural gas (LNG) suppliers, especially in the US, with more deals expected. Until now, utilities were reluctant to enter into 15- to 20-year contracts, wary of the commitment to an energy source that emits carbon and methane

Since May, Berlin has announced plans for a series of floating terminal in order to increase the amount of LNG the country is able to import.

On global gas markets, Platts LNG Japan/Korea Marker (JKM) Futures reached US$55 per metric million British thermal unit (mmBtu) on 8 September, compared with US$8 a year ago, meaning that futures for LNG are now seven times what they were in September 2021.

According to Standard & Poor’s (S&P) Global this price is only set to rise more due to the combination of a shortage of tankers, higher chartering rates and limited gas supplies.

China “provides more than US$30bn in emergency loans”

China has provided tens of billions of dollars in secret “emergency loans” to countries at risk of a financial crisis in recent years, making Beijing a formidable competitor to the western-led International Monetary Fund (IMF) according to reports.

The bailouts represent a linchpin of the massive infrastructure loans China has provided over nearly a decade as part of its US$838 billion Belt and Road Initiative (BRI), a programme that has seen it eclipse the World Bank as the world’s largest public works financier.

Three of the largest recipients of Chinese bailout loans are Pakistan, Sri Lanka and Argentina, which r have collectively received US$32.83 billion since 2017, according to data collected by AidData, a public research lab at US university William & Mary in Williamsburg, Virginia.

Other countries to have received rescue loans from Chinese state agencies were Kenya, Venezuela, Ecuador, Angola, Laos, Suriname, Belarus, Egypt, Mongolia and Ukraine, according to AidData, which did not provide details for these countries.

Such credit is intended to enable countries to maintain payments on foreign debts and continue to buy imports, to avert balance of payments problems that can develop into incidents such as the 1997 Asian crisis and the Latin American crisis of the early 1980s. The strict regulations of the IMF in the wake of the Asian crisis proved unpopular and reinforced opposition to the Fund that continues to this day

While the IMF discloses the details of its credit lines, debt relief and restructuring programmes to debtor countries, China operates largely in secrecy. Its financial institutions release few details about the credit extended and Beijing does not base its lending on debt restructuring or economic reforms in recipient countries, analysts say. In most cases, the purpose of China’s emergency loans is to prevent defaults on infrastructure loans provided under the BRI, they believe.

“Beijing has tried to keep these countries afloat by providing emergency loans after emergency loans without asking borrowers to restore economic policy discipline or pursue debt relief through a coordinated restructuring process with all major creditors,” said Bradley Parks, executive director of AidData. China’s approach often “postpones the day of reckoning”.

“When Beijing acts as an alternative lender of last resort and rescues an ailing sovereign without demanding economic policy discipline or pursuing coordinated debt restructuring with major creditors, it effectively kicks the ass and leaves it to others to solve the problems.” to solve. underlying solvency problem,” added Parks.

JPMorgan recommends move out of emerging market government debt

Analysts at JPMorgan issued an “underweight”, or sell sign, on international emerging market (EM) sovereign debt late last week, citing the global economic slowdown and ongoing rise in interest rates and the US dollar.

The lender, regarded as one of the world’s most influential investment banks, said the premiums investors demand to hold EM debt – rather than ultra-safe US Treasuries – could soon balloon out again after showing a recent improvement.

“We move underweight Emerging Markets Bond Index Government Debt (EMBIGD) from marketweight,” JPMorgan said referring the bank’s widely tracked EM sovereign debt index.

The “risks are for the next big spread move to be wider than tighter in our view given late cycle financial conditions tightening and growth risks,” the bank's analysts added.

As The Economist noted last November 2022 marks the 40th anniversary of a famous default. In August 1982, Mexico’s finance minister admitted that his government was unable to repay the money that US banks had lent it. After Mexico’s default no less than 26 other EMs, including 15 in Latin America, had to reschedule their debts.

“Forty years later, emerging markets have again accumulated uncomfortably high levels of debt: their government obligations average about 63% of their combined GDP, according to the International Monetary Fund (IMF),” the magazine added. “That is an increase of more than 10 percentage points since 2018. Could the anniversary of one debt crisis be marked by another?”

Payments firm Bolt scraps US$1.5bn deal to acquire crypto company Wyre

US online checkout company Bolt Financial said it has scrapped a planned US$1.5 billion deal to buy cryptocurrency infrastructure provider Wyre Payments, following recent sharp falls in the valuations of crypto and fintech businesses.

San Francisco-based Bolt was valued at US $11 billion after a funding round in January and the planned deal was announced in early April 2022. However, tech valuations have been increasingly pressured this year as investor sentiment has been dented by growing fears of a global recession and a downturn in equity markets.

Payments processor Stripe and fintech Klarna Bank are among those to have suffered significant valuation cuts. Industry valuations have also fallen significantly in the crypto sector during a price slump over recent months.

Bolt said in a statement it will continue its partnership with Wyre and that staying independent would allow it to focus on its core areas.

“We will continue our existing commercial partnership with Wyre to pave the path of crypto integration into our ecosystem, bringing Wyre’s innovative crypto infrastructure to the world,” said Bolt’s CEO Maju Kuruvilla.

Southeast Asia’s largest bank DBS ventures into metaverse

Southeast Asia’s largest bank, DBS, says it is “the first bank in Singapore to make a foray into the metaverse. “The metaverse presents exciting opportunities to redefine how we live, work and engage with each other,” said a DBS executive.

DBS announced that it is partnering with The Sandbox, a virtual world where players can build, own, and monetise their gaming experiences on the Ethereum blockchain. The partnership aims “to create DBS Better World, an interactive metaverse experience showcasing the importance of building a better, more sustainable world, and inviting others to come alongside.”

The partnership makes DBS the first Singapore company to seal a partnership with The Sandbox and the first bank in Singapore to make a foray into the metaverse.

“Under the partnership, DBS will acquire a 3×3 plot of LAND — a unit of virtual real estate in The Sandbox metaverse — which will be developed with immersive elements,” the bank detailed.

“The metaverse presents exciting opportunities to redefine how we live, work and engage with each other,” said Sebastian Paredes, CEO of DBS Hong Kong. “We have been getting our feet wet in this space, and our very own young technologists have been given the freedom to develop experimental concepts in the metaverse.”

Australia’s banks welcome targets to cut emissions

Australian banks have welcomed the passing of the Federal Parliament’s climate change bill to cut emissions by 43% by 2030 and deliver net zero emissions by 2050.

The Australian Banking Association (ABA) said that the legislation provided certainty to businesses and households, and to the banks that support them, and is the first step on the longer-term journey towards future targets as part of an increasingly decarbonised economy.

“The impact of climate change, its mitigation, and the ongoing decarbonisation of the economy is now critical to every aspect of our lives,” said the ABA’s CEO Anna Bligh. “It impacts how we use and value our homes, how we run our businesses, how we embrace technology as we digitise, how our farmers produce our food and fibre and how we care for our environment. No matter how you slice and dice it, climate change is, and will remain, a core economic issue for Australian banks.

“This is a positive step forward for the country and provides certainty for investors, clarity for businesses, and opportunity for all Australians to seek out future opportunities, as part of this ongoing transition to a low-carbon future” Bligh added.

Nigerian blockchain payments start-up Bitmama raises funding to US$2m

Nigerian blockchain start-up Bitmama has raised a pre-seed extension of US$1.65 million, adding to the US$350,000 received last October to close the round at US$2 million.

The US and Nigeria-based company has built a distributed remote team across Nigeria, Ghana and Kenya, and says it is working to democratise Africa’s highly fragmented payment system by leveraging blockchain-based solutions.

Africa is the world’s third fastest-growing crypto market, with crypto adoption reportedly increasing by more than 1,200% over the past two years. Countries such as Nigeria, Kenya and South Africa have seen the fastest growth as citizens try to hedge against currency devaluation and build wealth. These countries are home to most of the continent’s crypto and blockchain start-ups, despite African governments’ inconsistent stance on cryptocurrencies, In the latest development, one such company, 

Africa-focused venture capital firms Unicorn Growth Capital and Launch Africaled the investment in Bitmama. Others include existing and new investors such as Adaverse, Flori Ventures, Tekedia Capital, GreenHouse Capital, ODBA, Five35 Ventures, Chrysalis Capital, Enrich Africa, Thrive Africa, Angellist Ventures and angel investors.

Chief executive officer Ruth Iselema founded the Africa-focused blockchain payments start-up in 2019. “We started Bitmama to make it easy for anyone across the African continent to buy and sell cryptocurrency but as time passed, we saw a couple of use cases we could employ this technology to solve,” she said. 

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