Russian Cyber Firm to Pursue Global Drive With CEO in Prison
Russian Cyber Firm to Pursue Global Drive With Founder in Prison
(Bloomberg) --
A Russian cybersecurity firm is vowing to press ahead with international expansion and says it’s still looking for a foreign investor, after its chief executive and founder was detained on treason charges.
Group-IB’s Ilya Sachkov, 35, who was arrested in Moscow last week and ordered to be held in custody until Nov. 27, had spoken critically of the apparent immunity of hackers inside Russia’s borders.
Sachkov’s prosecution may be linked to accusations of providing information on Russian cybercriminals to U.S. authorities, the Kommersant newspaper reported.
“Our strategy won’t change,” Dmitry Volkov, who’s taken over the reins of the company, said in an interview in Group-IB’s Moscow office.
Group-IB expects to make 60% of its revenue in 2021 outside Russia, which last year accounted for just over half of its business, he said. In addition to a goal of growing the company to a valuation of $1 billion, it’s looking for a foreign investor and is also still considering an IPO, he said.
Group-IB’s troubles reflect the challenges Russian companies operating in strategic sectors like cybersecurity face when seeking to transform themselves into global players. As well as private clients in Russia, it also works with state-controlled corporations such as lenders VTB and Sberbank, and government bodies including the central bank, interior ministry and space agency.
The firm, which moved its headquarters to Singapore in 2019 and also opened offices in Amsterdam and Dubai, has built up cooperation with Interpol, Europol and foreign law enforcement agencies.
At the same time, Sachkov worked closely with Russian’s domestic intelligence agency, the Federal Security Service or FSB, as is mandatory for cybersecurity firms of any significant size in Russia, according to three people close to security circles in Moscow. Group-IB’s interaction with the FSB relates solely to investigations of cybercrimes, the company said in a statement.
His effort to move his business mostly outside of Russia aroused suspicion that he was too independent, two of the people said. In April, the tech entrepreneur said Group-IB planned to list shares on a foreign exchange.
Sachkov raised eyebrows in mid-2020 when at a meeting between Prime Minister Mikhail Mishustin and IT executives he said Russian authorities should arrest alleged hacking mastermind Maksim Yakubets. The FBI has offered a reward of as much as $5 million for Yakubets, who’s accused of targeting Europe and North America with malware and lives openly in Moscow.
“We have always said that we are developing an international company and this is the only way to build a good cybersecurity business,” Volkov said. “I don’t think that this could at all be a reason for Ilya’s arrest.”
Sachkov has been formally charged with state treason, which carries a maximum sentence of 20 years, the state Tass news service reported Thursday. He denies collaborating with foreign intelligence services, it said.
Group-IB’s work in fighting cybercrime has always relied on “cooperation with law enforcement agencies, no informal relationships, only official agreements or requests,” Volkov said.
President Joe Biden agreed at a June summit with Russian counterpart Vladimir Putin to hold a dialogue on cybersecurity in a bid to halt a spate of hacking linked to Russia-based crime groups. Talks have started but have made little headway, and the malware attacks have continued.
Sachkov’s detention may be related to the case of a former top FSB official, Sergei Mikhailov, who was sentenced to 22 years in prison for state treason in 2019 over accusations of passing sensitive information on cybercrime to the U.S., according to RBC newspaper.
The company founder’s arrest was a “big surprise for everyone,” said Volkov. “We understood that our work was connected with the fight against cybercrime and always considered it risky, because hackers will want to take revenge on us sooner or later. But this kind of scenario was not taken into account.”
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