New U.S. Government Initiative Holds Contractors Accountable for Cybersecurity

The U.S. government on Wednesday announced the formation of a new Civil Cyber-Fraud Initiative that aims to hold contractors accountable for failing to meet required cybersecurity requirements in order to safeguard public sector information and infrastructure.

“For too long, companies have chosen silence under the mistaken belief that it is less risky to hide a breach than to bring it forward and to report it,” said Deputy Attorney General Monaco in a press statement. “Well that changes today, [and] we will use our civil enforcement tools to pursue companies, those who are government contractors who receive federal funds, when they fail to follow required cybersecurity standards — because we know that puts all of us at risk.”

The Civil Cyber-Fraud Initiative is part of the U.S. Justice Department’s (DoJ) efforts to build resilience against cybersecurity intrusions and holding companies to task for deliberately providing deficient cybersecurity products or services, misrepresenting their cybersecurity practices or protocols, or violating their obligations to monitor and report cybersecurity incidents and breaches.

To that end, the government intends to utilize the False Claims Act (FCA) to go after contractors and grant recipients for cybersecurity-related fraud by failing to secure their networks and notify about security breaches adequately.

In addition, the DoJ also announced the launch of a National Cryptocurrency Enforcement Team (NCET) to dismantle criminal abuse of cryptocurrency platforms, particularly focusing on “crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.”

The developments also come nearly a week after the U.S. Federal Communications Commission (FCC) laid out new rules to prevent subscriber identity module (SIM) swapping scams and port-out fraud, both of which are tactics orchestrated to transfer users’ phone numbers and service to a different number and carrier under the attacker’s control.

The FCC’s proposal would require amending existing Customer Proprietary Network Information (CPNI) and Local Number Portability rules to mandate wireless carriers to adopt secure methods of confirming the customer’s identity before transferring their phone number to a new device or carrier. On top of that, the changes also suggest requiring providers to immediately notify customers whenever a SIM change or port request is made on their accounts.

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