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Financial loophole allows ransomware attacks to quadruple in one year

Financial loophole allows ransomware attacks to quadruple in one year
PHOTO COURTESY OF SHUTTERSTOCK

Ransomware is set to become the biggest malware threat of 2016.

According to security researchers, compared to the last quarter of 2015, the number of attacks rose by 30 percent from January to March in 2016 alone and they detected 2,900 modifications to the ransomware variants in the same period.

This surge in the popularity of ransomware with cybercriminals could only mean one thing: It's profitable.

It is estimated that attackers are earning hundreds of thousands of dollars each month by targeting a massive number of computers every day.

The currency of choice for ransomware? Bitcoin.

Bitcoin is the secure and untraceable digital payment system of the internet. Released in 2009 by an entity called Satoshi Nakamoto as a direct peer-to-peer virtual cryptocurrency, Bitcoin is now the preferred payment method for Dark Web transactions and cybercrimes due to its anonymous nature.

Is Bitcoin's growth contributing to this surge in ransomware attacks?

According to security researcher David Emm, there's a definite correlation:

"It's helping. I think that's definitely true. The existence of effectively anonymised payment mechanisms definitely plays into the hands of cybercriminals."

Although online money scams existed before the era of Bitcoin, criminals used to extort payments through other online payment systems like PayPal and they even attempted to have cash and checks sent through traditional postal services.

The main issue with these payment systems? They are still traceable.

Postal addresses can be physically monitored and online payment systems like PayPal are always associated with a bank account, leaving a paper trail for the authorities to follow.

This is not the case with Bitcoin.

Bitcoin transactions could be finalized under complete anonymity. Using a Bitcoin "mixing" service, these payments could be broken down then combined and passed on to thousands of Bitcoin wallets to elude tracking.

Adding to Bitcoin's attractiveness to criminals is its immediacy. It is a direct transaction system, needing no middle man for the virtual currency to change hands. Payments and Bitcoin funds are immediately moved to a cybercriminal's account without the need for an intermediary.

Another reason why ransomware extortionists prefer Bitcoin is its flexibility. Requiring no definite banking or login information, attackers can easily change Bitcoin accounts if they feel a particular account is being monitored by authorities.

David Emm adds:

"You have a mechanism for a particular attack, once you get enough money you're off and using a different email address or account. That fluidity and the speed of business operation allows them to hide between the cracks a lot easier."

With all these characteristics of the Bitcoin system, no wonder it is contributing to the rise of ransomware attacks around the world. It's easy, direct, and can be completely untraceable.

As with other anonymous internet enablers, like Tor, Bitcoin is just another neutral tool that cybercriminals are taking advantage of, simply because it exists.

With that, it will be interesting to see how authorities will act and regulate this virtual currency in the future.

 

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