China’s largest bank, Industrial and Commercial Bank of China (ICBC), faced a ransomware attack on its US arm, ICBC Financial Services, resulting in disruptions to the US Treasury market. The attack forced clients to reroute trades, and the incident has been reported to law enforcement. ICBC Financial Services, headquartered in New York, stated that it is actively investigating the incident and working to recover from the cyberattack.
The ransomware attack occurred on Wednesday, prompting ICBC Financial Services to successfully clear US Treasury trades executed on that day and repurchase agreements financing trades conducted on Thursday. The head office in Beijing, as well as other domestic and overseas units, remained unaffected by the incident, including the ICBC New York Branch.
While global financial regulators are assessing the fallout, the Chinese Foreign Ministry confirmed that ICBC has completed emergency handling and supervision to minimize risk impact and losses. China’s Consul General in Lagos highlighted the bilateral trade volume between China and Nigeria, reaching $17.25 billion in the first three quarters of 2023.
Market participants reported disruptions in trades going through ICBC, affecting market liquidity. The incident’s impact on the weak 30-year bond auction conducted by the US Treasury on Thursday remains unclear. The US Treasury spokesman stated that they are aware of the cybersecurity issue, maintaining regular contact with key financial sector participants and federal regulators, while continuing to monitor the situation.
The ransomware attack on ICBC’s US arm adds to the growing challenges faced by financial institutions globally in the face of increasing cyber threats.