Chinese Hackers Breach US Treasury's Sanctions Office: Report

Chinese government hackers have reportedly infiltrated the U.S. Treasury's Office of Foreign Assets Control (OFAC) and the Office of Financial Research, according to a report by the Washington Post. The breach, which was disclosed in a letter to lawmakers earlier this week, has been labeled a "major incident" by the Treasury Department.

The hackers, allegedly sponsored by the Chinese government, also targeted the office of U.S. Treasury Secretary Janet Yellen, though the extent of the damage remains unclear. The letter noted that unclassified documents were stolen but did not specify which users or departments were affected.

Compromised Cybersecurity Vendor

The breach reportedly involved the compromise of a third-party cybersecurity service provider, BeyondTrust, which had access to Treasury systems. This raises significant concerns about the vulnerability of critical U.S. infrastructure to sophisticated cyberattacks.

China Denies Allegations

In response to the allegations, Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, dismissed the claims as "irrational" and accused the U.S. of engaging in "smear attacks" against Beijing. The statement emphasized that China opposes all forms of cyberattacks but did not directly address the specific allegations in the report.

Motivation Behind the Attack

According to the Washington Post, the hackers may have been targeting information related to Chinese entities that the U.S. is considering for financial sanctions. Sanctions have become a key tool in Washington’s foreign policy toward Beijing, focusing on Chinese firms and individuals suspected of aiding adversaries like Russia.

Context and Implications

This breach comes at a time when the U.S.-China relationship remains strained. The United States views China as its greatest foreign policy challenge, with tensions heightened over trade, technology, and national security concerns.

Last month, Treasury Secretary Janet Yellen hinted at potential sanctions on Chinese banks as part of Washington’s efforts to curb Russia’s oil revenue and restrict its access to foreign supplies.

The incident underscores the growing cybersecurity risks posed by nation-state actors, especially as global economic and political tensions escalate. The U.S. Treasury Department has not yet commented on the report, leaving many questions about the scale and implications of the breach unanswered.