GOVERNING CYBER EXTORTION: RANSOMWARE, CRYPTOCURRENCY AND THREATS TO NATIONAL SECURITY IN THE DIGITAL AGE

Cyber Extortion and Ransomware have evolved as consequential threats to the national security of states, since they have transformed from a financial crime into a fundamental tool of geopolitics. This paper contributes to existing knowledge of study by integrating these dimensions in unified National Security Governance framework, demonstrating how ransomware has evolved into an instrument of coercive statecraft sustained by decentralized financial systems and state-enabled proxy ecosystems. Coercion theory and Proxy Warfare theory have been employed as the theoretical frameworks while qualitative research has been carried out through secondary resources. It has been contended by scholars that cybercrimes have evolved into a tool of politico-economic coercive statecraft, while functioning well below the established threshold of traditional warfare. It has also been discussed how states operate through proxy groups to carry out their cyber operations with the objective of attaining their respective national interest. Yet each state operates with a distinct level of control, operational tendencies, and strategies for deniability. While North Korea operates through a state-backed apparatus, Russia and Iran support proxy groups inertly to maintain their global repute and credibility. Case-study of North Korea has been discussed to elaborate, how the state-backed criminals operate in a deeply entwined digital ecosystem. Furthermore, efforts to counter cybercrime and ransomware have been predominantly ineffectual, since FATF Standards on Virtual Assets and ICT regulations have been difficult for states to implement. Feeble strategies for enforcement and disjointed implementation of policies have been the prime weakness of these international organizations. This research study concludes that effective countermeasures against cybercrime and ransomware are conceivable only if a transnational governance mechanism with comprehensive regulatory coordination, cyber deterrence, resilient essential infrastructure and financial intelligence is in place. The primary objective is to repudiate the financial and geopolitical compensations to the rivals attained from the coercive ransomware operations in the contemporary digital financial ecosystem. Keywords: Cybercrime, Ransomware, Cryptocurrency, Digital Assets, FATF, ICT, Digital Governance, Regulatory Coordination