ICBC pumps funds into US unit after ransomware attack to pay US$9 billion for unsettled trades, hires cybersecurity firm

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ICBC’s US unit told market participants on Friday it was hoping to finish the cyber review over the weekend, but the sources said they expected it would spill into next week. Meanwhile, the bank is using manual processes to trade, they said.

The details, including the cash injection for unsettled trades, have not been previously reported.

The ransomware attack was claimed by cybercrime gang LockBit, a widely deployed ransomware first seen on Russian-language-based cybercrime forums in January 2020. It is the latest in a string of ransom demands by hackers this year.

Ransomware attack on ICBC unit disrupts US Treasury market trades

The cyberattack sent ripples through the US Treasuries market, where ICBC acts as a broker for hedge funds and other market participants, helping them trade in the securities. While the extent of disruption to market was limited, it brought into focus the resilience of a market that underpins global finance.

When the hack happened earlier this week, ICBC was unable to access its systems, leaving it temporarily owing BNY US$9 billion for unsettled trades, two of the sources said. The custody bank is the sole settlement agent for Treasuries.

The Chinese parent then injected capital into the US unit, allowing it to settle the trades and pay back BNY Mellon, the sources said. That has now happened, they said.

ICBC did not respond to a request for comment. ICBC Financial Services, the bank’s US unit, has said it was investigating the attack that disrupted some of its systems, and making progress toward recovering from it.

Industrial and Commercial Bank of China near Pudong South Road, Shanghai. ICBC says it hopes to complete the assessment of its systems as soon as this weekend after a ransomware attack. Photo: Future Publishing via Getty Images

ICBC’s representatives told market participants on a call organised by the Securities Industry and Financial Markets Association (SIFMA), a trade group, on Friday afternoon that they had hired a cybersecurity firm to do an assessment to ensure that its systems are safe, three sources familiar with the matter said.

ICBC said it hopes to be done as soon as this weekend, the sources said, noting that it could take longer,…

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