UK regulators have started an investigation following a cyberattack on London-based ION Trading UK that’s snarled global derivatives trading.
(Bloomberg) — UK regulators have started an investigation following a cyberattack on London-based ION Trading UK that’s snarled global derivatives trading.
The Financial Conduct Authority and the Prudential Regulation Authority are among departments involved in the probe, according to people familiar with the matter who asked not to be identified because the discussions are private. The FCA is “aware of this ongoing incident” and will continue to work with its counterparts and firms affected, a spokesman said.
The attack affected 42 of ION’s clients and forced several European and US banks and brokers to process some derivatives trades manually. Russian ransomware gang LockBit was behind the incident, Bloomberg reported on Wednesday.
ION told clients on Thursday that its systems won’t be fully operational until Feb. 5 and the firm still hasn’t been able to start several crucial recovery steps, according to email correspondence obtained by Bloomberg.
The impact of the attack has rippled through the futures trading industry, as transactions back up and firms struggle to determine their margin requirements to enter or exit positions, according to multiple people familiar with the matter.
North-European banking group Skandinaviska Enskilda Banken AB, said late Wednesday it was having issues clearing listed derivatives on behalf of customers in several marketplaces. The bank is managing clearing of exchange-traded derivatives “in alternative ways” and trying to minimize the impact on customers, spokesman Niklas Magnusson said.
The issue is isolated to a small number of smaller and mid-size firms and doesn’t pose a systemic risk to the financial sector, the US Treasury Department said in a statement.
–With assistance from Love Liman, Lydia Beyoud and Katherine Doherty.
(Adds detail about PRA involvement in second paragraph.)
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