Did Bitcoin Enable an Explosion in Ransomware Attacks?

Cyber security is a discipline that is as old as computers and the internet. Ever since there has been data stored on a hard drive somewhere, there has been a need to protect that data.

Being attacked by ransomware can be extremely frustrating and expensive. Imagine trying to get into your computer and a note pops up on the screen that every single one of your files is now encrypted and in order to get access to them, you have to pay $1000. A recent ransomware attack that occurred, known as WannaCry, affected nearly 200,000 computers across Europe. It was made possible by hackers who took advantage of a flaw in Microsoft OS that was discovered by the NSA.

Ransomware attacks are becoming extremely common in the business world. A survey by Malwarebytes indicated that 40% of businesses have been affected by ransomware at some point and that number was even higher at 54% in Britain. Although it’s been a phenomenon for a while, ransomware increased by 3,500% from the fourth quarter of 2015 to the first quarter of 2016.

Some attribute this sudden rise in ransomware attacks to the emergence of Bitcoin. The CEO of Intel Security, Chris Young, said, “It wasn’t until the advent of Bitcoin in our society that ransomware was able to take. Because now, as an attacker, I can anonymously monetize my target.”

Hackers can accept payments anonymously and automatically with Bitcoin. Before Bitcoin, they utilized Paypal and similar online payment methods, but they were less effective and had fairly strict fraud controls. “It’s helping. I think that’s definitely true. The existence of effectively anonymised payment mechanisms definitely plays into the hands of cybercriminals,” says David Emm, principal security researcher at Kaspersky Lab.

In the early days of ransomware, individual hackers would often seize control of a machine by sending a spam email out with a link that unsuspecting users could click. Once they clicked the link, they could then hold their computer ransom with a demand to send money via Western Union. While it worked sometimes, once the authorities got involved, they could still trace the money. It would still be tied to a bank account somewhere.

Now with Bitcoin, money can be collected automatically and without being tied to a bank account. While you can look at the Bitcoin blockchain and see where money goes, it becomes difficult to track it once it is passed through multiple wallets. Many use Bitcoin mixing services that split up Bitcoin and mix it with other money to confuse the tracking process. If you pass it through multiple Bitcoin wallets and mix it in with other Bitcoin, it becomes very difficult to trace.

Bitcoin also makes it easier and faster for criminals to gain access to the money they steal. In the past, they might have to wait for it to transfer between bank accounts or to be physically transferred in cash. Now, they can move it around to multiple Bitcoin wallets quickly and start using it with a new email address. This allows the money to be spent before it can even be located.

Although Bitcoin has helped enhance recent ransomware operations, this activity existed well before Bitcoin. Bitcoin was introduced in 2008, while Ransomware has first been discovered in 1989. If Bitcoin were not there to satisfy the need, cyber criminals would find some other way to do it.

The dark web has also made it easier for criminals to engage in illicit activity while remaining anonymous. Even the internet itself could be said to be helping criminals. With malware attacks, identity thefts, phishing scams and many other illegal activities taking place, the internet has made things easier on criminals.

The latest ransomware attack has given Bitcoin critics more ammunition. Although the price of Bitcoin has increased significantly over the last few months, it took a hit after the WannaCry attack took place. With the massive amount of publicity that these attacks tend to receive, it’s possible that Bitcoin could become associated with illegal activities in the eyes of the public. At that point, stores and businesses with their trendy “Bitcoin accepted here” sign might start to reevaluate their association.

Overall, criminals are going to use whatever tools are available to commit crimes. Innovation will continue and there will always be both benefits and drawbacks to every emerging technology. For now, both Bitcoin and ransomware appear to be here for the long-term.

Author info:

Josh McAllister is a freelance technology journalist with years of experience in the IT sector. He is passionate about helping small business owners understand how technology can save them time and money. Find him on Twitter @josh8mcallister

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