Security & Fraud

City Held Hostage — Via Bitcoin Ransomware

When it comes to bitcoin, the stories about ransomware seem to be nothing out of the ordinary for the mainstream news cycle.

Ironically, this most recent case comes less than a year after a New Jersey police officer from the same city was nabbed for selling bitcoin mining equipment. But this time, the case is a bit more serious as it has to do with hackers using bitcoin ransomware to lock out local government employees from their own computers.

As has been reported, city officials worked to get back up an running, but there were at least a few computers that had already been impacted by the ransomware. The result? Having those government computers hacked in return for roughly $730 in bitcoin. But unlike some cases (like the hospital that forked over the bitcoin before consulting law enforcement), in this instance, the city called upon law enforcement for help — scaring off the hackers.

The nuts and bolts of the the hospital story began last month in Los Angeles with $17,000 worth of bitcoin being paid out to hackers who took down a computer system — which, of course, included vital medical records. This is the type of malware that's been most commonly showing up in headlines and has been on the rise across the U.S.

In fact, in 2015, the FBI received roughly 2,453 complaints related to ransomware malware attacks, which amounted to $24.1 million in losses for victims.

“Definitely a growing threat,” FBI Special Agent Chris Stangl told The Washington Post. “Success breeds more activity.”

While the initial ransomware demands are often small amounts, it adds up. And it also compromises another key factor: data security.

“Ransomware has been around for a long time, but we’ve never seen a concerted manual effort by hackers to break into a network, hang out for a year, spread to all the machines and then install it everywhere,” Val Smith, CEO of Attack Research, a cybersecurity firm, told the Post. “This is a major shift in effort.”

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