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Also: the UK's $7B Bitcoin Case, Implications of Vectra's Netography
In this week's update, ISMG editors examine how the U.S. shutdown and the lapse of CISA 2015 liability shield are straining cyber operations, what Vectra’s move for Netography signals for multi-cloud visibility and NDR, and how British prosecutors unraveled a bitcoin hoard now worth $7 billion.

Reduced Staffing Disrupts Regulatory Work, Leaves Health Entities More Vulnerable
If it lasts much longer, the federal government shutdown could prove to be highly disruptive, risky and increasingly unnerving for healthcare sector providers that depend upon federal agencies for cybersecurity-related support and resources, some experts said.

Experts Warn Intel Disruptions May Outlast Shutdown Amid Deepening Cyber Cuts
State and local cybersecurity officials already feel the effects of the federal government shutdown with congressional lawmakers Friday showing no signs of a deal. The shutdown comes on the heels of a March executive order that shifted risk management responsibilities onto state and local agencies.

Fake Messaging Apps Use Previously Undocumented Malware
Android spyware campaigns using previously undocumented spyware masquerade as upgrades or plugins for secure messaging apps Signal and ToTok, warn researchers. The two campaigns appear to target residents of the United Arab Emirates.

New Investigatory Powers Act Request Reportedly Transmitted in September
The U.K. Home Office reportedly again ordered Apple to give it backdoor access to an encrypted cloud service after backing down in August from a similar demand made earlier this year. The order comes after a similar attempt by the Home Office in January.

Also: Texas Brothers Charged in $8M Crypto-Linked Kidnapping Case
This week, Brian Quintenz won't lead the U.S. CFTC, Canada fined KuCoin $14M, Texas brothers charged in an $8M kidnapping case, South Korean actor given suspended sentence for embezzlement, phishing campaign used robots.txt and an ex-LASD deputy pleaded guilty in a business extortion scam.

Hospital Sisters Health System's 2023 Hack Affected Nearly 900,000 People
A network of 13 Catholic hospitals, community health centers and clinics in the Midwest will pay $7.6 million and implement improvements to its data security practices to settle consolidated class action litigation filed in the aftermath of a 2023 hacking incident affecting nearly 900,000 people.

Identity Security Vendor to Expand AI Governance Tools Including MCP Server Defense
Descope raised $35 million to expand its agentic identity hub and MCP authorization capabilities. As enterprises adopt AI, CISOs demand granular governance, auditing and secure identity frameworks for nonhuman agents. Descope aims to lead this emerging space.

Also, Cyberattack Disrupts Asahi’s Japan Operations, Halts Production
This week, FTC sued Sendit, another Harrods breach, Allianz data breach and a cyberattack disrupted Asahi's Japan operations. WestJet disclosed data theft. Hackers targeted Kido Nursery chain, a VMware privilege escalation flaw was exploited as zero-day, DarkCloud infostealer resurfaced.

US Cyber Defense Agency Faces 65% Furlough Rate Amid Federal Shutdown
The U.S. federal government shutdown has slashed staff at the nation's cyber defense agency and other key cyber entities, freezing daily operations, stalling grants and weakening threat coordination as state and local systems brace for lapses in federal support.

Evaluating Tools Saves Money But Requires Technical, Compliance and Business Acumen
Shiny object syndrome is more than a metaphor in cybersecurity. Organizations that chase every new tool often discover that what looked impressive in a demo fails to meet operational needs. The cure for this common malady is a structured tool evaluation process.

Armis CISO Curtis Simpson on Spend Justification, AI Risks, Real-Time Visibility
Curtis Simpson, CISO at Armis, shares how CISOs can frame spend in terms executives value, the underestimated risks of AI and which technology trends will truly reshape enterprise security.

$7 Billion Illicit Bitcoin Horde: Malaysian National Latest to Plead Guilty
A Malaysian national pleaded guilty Tuesday in an English courtroom to assisting an investment fraud scammer who converted stolen assets into a cryptocurrency treasure trove now worth $7.1 billion, including helping her to evade arrest by lining up assistants and Airbnb rentals in Scotland.

'Success Stories' Social Media Program Impermissibly Disclosed PHI of 150 Patients
A "Success Stories" marketing campaign by a Delaware nursing home that involved posting photos and names of patients on social media resulted in a $182,000 federal fine. Regulators say the company violated HIPAA rules through the unauthorized disclosure of patients' protected health information.

ENISA: Nation-State Hacking 'Steadily Intensified' Over 12-Month Period
Nearly every member government of the European Union experienced a cyberattack from a nation-state hacker in the 12 months ending in July, primarily from Russian and Chinese threat actors who "steadily intensified" hacking, says the European cyber agency.

Threat Actor Shifts From Targeting Exchange to Databases
A Chinese cyberespionage threat actor with a history of hacking Microsoft Exchange to spy on geopolitical events including summits in Africa, the Middle East and Asia, has shifted its attention to targeting databases, say researchers.

Medication Tech Firm Says Hacking Incident Contained to One Employee Email Account
A Florida firm that offers medication therapy management services to health plans is notifying nearly 150,000 individuals that their information was potentially compromised in a phishing attack affecting one employee's email account for only about an hour. Why do users still fall for phishing scams?

Public-Private Cyberthreat Sharing at Risk Amid Shutdown, Experts Warn
With a key cyberthreat sharing law expiring Tuesday, analysts tell Information Security Media Group legal protections enabling cyberthreat sharing across the public and private sectors will vanish, raising fears of reduced visibility into critical infrastructure just as federal resources shrink.

A Look at How the 2nd Largest Deal in Cyber History Nearly Fell Apart in the 11th Hour
The second-largest acquisition in cybersecurity history included initial outreach in 2023, the seller nearly walking away and an accelerated announcement timeline due to media leaks. Palo Alto CEO Nikesh Arora first approached CyberArk Chairman Udi Mokady about a potential deal back in May 2023.