Cyberattack threat: 'No one is prepared' for Russian retaliation, expert says

Silverado Policy Accelerator Chairman Dmitri Alperovitch joins Yahoo Finance Live to discuss the threat of Russian cyberattacks on the U.S. and its allies following financial sanctions on Russia.

Video Transcript

JULIE HYMAN: And yesterday, President Biden issued a warning. He told US companies to strengthen their cyber defenses immediately and warned of potential cyber attacks originating in Russia. This is not the first time he said this, but perhaps his most strong warning thus far.

Dmitri Alperovitch is joining us now. He's Silverado Policy Accelerator chairman. He's also co-founder of CrowdStrike. He knows some cybersecurity, in other words. So Dmitri, it's very good to have you here. What do you make of President Biden's latest warning? And in your view-- I mean, this is something you've studied extensively-- are US companies prepared for these kinds of cyber attacks?

DMITRI ALPEROVITCH: Well, we've been expecting for some time Russian retaliation for the sanctions that are now crippling their economy. They weren't expected to take this lying down. And one of the ways they can respond, of course, is through cyberattacks.

We haven't seen anything since the start of the invasion, but now that the invasion on the ground in Ukraine is sort of grounding into a stalemate, I think now they're focusing their attention on the West. How can they break up the lines between Europe and the United States? How can they respond and retaliate through cyber attacks that can damage the US economy and the western economies?

And I think that's what the warning from President Biden is highlighting, is that they may be getting ready to launch some of these attacks. In terms of preparedness, really, no one is prepared for a dedicated onslaught from one of the best cyber actors out there, the Russian intelligence services. They have three main intelligence services that are conducting cyber operations.

The GRU, which is one of the most well known, is their military intelligence agency. They were the ones that have conducted so many destructive attacks in the past, including taking down Ukrainian networks, as well as their power grid back in 2015 and 2016. Of course, interference in our elections in 2016. But you also have the FSB and the SVR that are highly, highly capable.

JULIE HYMAN: You know, Dmitri, going back to something you said that this might be the time because the invasion seems to be reaching some sort of stalemate. That said, it's been surprising, at least to me, not an expert admittedly, that Russia hasn't done something before now. Why not conduct the invasion at the same time that it is also conducting cyber attacks against the West? What has it been waiting for?

DMITRI ALPEROVITCH: Well, I think it's been very focused on the war that has not gone well for them. They expected to take Kyiv in three days. That has not happened. Clearly, we're almost a month into this war, and they have not taken any major cities outside of Kherson in the south yet. They're trying to take Mariupol right now by grounding into the-- by basically pummeling into the ground.

They haven't made any progress surrounding Kyiv and many of the other major areas. So they have been very, very preoccupied. And now that they're sort of pulling back a little bit, their forces trying to reorganize, now I think is the time that they are focusing their attention back on the West.

BRIAN SOZZI: Dmitri, a couple of days ago, we talked to George Kurtz over at CrowdStrike, someone you know very well. And he was talking about cyber warfare potentially being the fifth dimension of war. And this is scary stuff. Do you think Russia would attack the US banking system first?

DMITRI ALPEROVITCH: I think it's very possible. I think we can see attacks against the energy infrastructure probably in Europe to try to create more pain for the Europeans and divide their alliance with the US on the sanctions that are very, very impactful to the Russian economy. And I think when it comes to us, when it comes to the America, they are likely to attack our financial sector, because of the crippling sanctions we've imposed on their banking sector.

JULIE HYMAN: So, Dmitri, talk to us about what that then could look like. Lay it out for us. What effect could that have? And you seem to imply that it would be difficult to put up, really, an effective front against that kind of attack.

DMITRI ALPEROVITCH: Well, the most important, sort of the optimistic view on cyber attacks is that it is very difficult to cause lasting damage. So even though you can infiltrate some of these networks, you can even take them down, you can destroy data, in the face of determined defenders that are likely to bring back those networks and get them to operational status within hours, maybe days at the outset. So keeping something down for weeks or months is really, really hard in cyberspace. So that's the good news.

And the bad news is that you can cause quite a bit of temporary disruption. And when it comes to our financial sector, they're likely to target not just individual institutions, but focus on sort of the systemic risks we have in our economy and our financial sector, things revolving potential wire transfers, market making for our stock market, and the like.

BRIAN SOZZI: And Dmitri, if you're a CEO of a large publicly traded company today and you're watching this conversation, you see it, what type of meetings, what type of things should you be doing with your teams inside the company to ultimately do everything you can to prevent a cyber attack?

DMITRI ALPEROVITCH: Well, if you're the CEO of a large publicly traded company, you're just now having those meetings, it's probably way too late. But hopefully, you have been paying attention to the warnings from the government. The program that they launched before the invasion called Shields Up, where they've done extensive outreach to numerous critical infrastructure sectors, telling them, get ready. Make sure you're on alert. Make sure you have all of your systems buttoned up, that you're looking for anything suspicious. You are responding quickly. You're notifying the government.

So if you're an executive right now, you want to make sure that that is still in place, that people are aware that the level of risk right now is extraordinarily high, and potentially, you're canceling vacations, making sure that it's really all hands on deck.

JULIE HYMAN: Dmitri, finally, I wanted to ask you, I guess, on a more personal note, you were born in Russia. You've lived in the United States for a long time. And Russia, I think it's fair to say, has sort of an important cultural legacy in the United States, both Russia and Ukraine and the former Soviet republics as well. I mean, what is sort of the lasting cultural legacy of this war?

DMITRI ALPEROVITCH: Well, it's an incredible historical disaster for Russia, obviously, for Ukraine, for Russia's standing in the world. The reality is that the Russian nation and the Ukrainian nations have been very close historically. And that is now all gone in a matter of weeks due to the action of Vladimir Putin. I think there will be generations of Ukrainians that will grow up hating Russians with good reason.

And if Putin wanted to make Russia great again, to borrow another phrase, through this invasion, he's miscalculated badly. And Russia is now in real danger of sliding into an economic black hole and becoming the new North Korea, isolated economically and diplomatically.