While ransomware attacks are hardly new, the frequency and scale of recent hits are really making headlines.
With bitcoin now the currency of choice for the latest wave of crypto scammers, yes, ransomware is becoming a problem for the entire crypto world.
What is a ransomware attack?
Attackers will freeze an organisation’s data or security systems, then demand large sums of money as ‘ransom’ for a decryption key to unlock it.
It was probably inevitable that ransomware hackers would start choosing cryptocurrency over fiat money for the proceeds of these cyber attacks.
Global meat processing giant JBS recently paid $US11 million in bitcoin after a ransomware attack, while Colonial Pipeline is thought to have paid some $4.4 million in bitcoin—although US authorities reportedly recovered most of that.
Cyber attacks on the rise
According to a CoinDesk report, crypto analytics firm Chainalysis, ransomware attackers seized almost half a billion dollars in 2020—a huge increase over previous years.
While 2021 is shaping up as a less prolific year—hackers have grabbed only $US127 million so far—experts think many paid crypto ransoms go unreported. This is largely because companies are reluctant to disclose themselves as targets, or state how much they paid.
Bitcoin: First choice for ransomware scams
Many of the latest ransomware attacks involve Bitcoin demands. Why? Because anyone, anywhere in the world, can set up their own bitcoin wallet and start trading.
The very thing that makes cryptocurrency so innovative and exciting—its accessibility—is the factor that also makes it so appealing to criminals.
They don’t have to go through the ID processes of a traditional bank or financial institution, or expose themselves to scrutiny via conventional wire transfer or international payment.
Unfortunately, bitcoin has become an enabler for hackers keen to exploit the flexibility of the blockchain.
Ways to mitigate ransomware threats
Many experts believe a proactive approach is needed to deal with ransomware attacks and mitigate their effects. Tangible steps could also help keep regulators at bay.
As Cyber Threat Alliance CEO Michaele Daniel told CoinDesk: “We have to find the right balance, policy balance between allowing the innovation that cryptocurrencies bring, the benefits they can provide and the protections we’ve built into the financial system to deal with criminal activity, to deal with money laundering.”
Crypto tracking and tracing may also be easier, with all cryptocurrency transactions being recorded on the distributed blockchain ledger.
Getting on the front foot
Other possible solutions include:
- Greater enforcement of KYC rules by over-the-counter (OTC) trading desks.
- Keeping anti-money laundering rules (AML) and KYC on bitcoin teller machine kiosks.
- Boosting investigative resources and upgrading cybersecurity regulations.
- Educating companies and regulators about the technical aspects of ransomware.
- Sharing information more extensively.
It’s an evolving situation, so stay tuned for more!