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Why cryptocurrencies are causing an international racket

Rob Rae, VP, Datto | Nov. 30, 2017

This vendor-written piece has been edited by Executive Networks Media but readers should note it will likely favour the submitter's approach.

rob

There's no doubt that ransomware is still worldwide 1epidemic.

Discussions with our Managed Service Provider (MSP) partners and end users in Singapore and the wider region indicate that the threat of ransomware is stronger than ever, and the stakes have never been higher.

Recently, a family-owned flower shop that suffered a US$3,000 ransomware attack. They didn't have the proper Back-up and Disaster Recovery (BDR) technology in place or the ability to pay the ransom demand. With limited cash flow, this was the straw that broke the camel's back, and they were forced to close their doors and walked away after 15 years.

What was the trigger that has allowed these thieves to start doing this?

It comes down to cryptocurrencies and how they facilitate extortion. Yes, that's right, extortion.

 

Gangster behaviour

Thinking about this sort of online criminal behaviour, you can't help but start drawing a correlation to old Hollywood gangster movies. In the movies, gangsters extort money from a small business owner using an implied threat of violence. "You wouldn't want your store to burn down, would you?" Of course, the small business owner has no choice but to pay up and the criminals walk away with the cash.

The situation is no different today. Hackers are extorting money from small businesses. This is cyber extortion. Thieves pick on SMBs because they often do not have the means to defend themselves. The SMB owner can't possibly stay on top of all the things they can leverage to protect their IT infrastructure and cryptocurrencies are making it difficult to track and slow these criminals down.

 

The problem with cryptocurrencies

Today one of the biggest challenges faced by cyber extortionists is how they obtain the cash. In the past, they would ask victims to deposit money into bank accounts or transfer funds via the likes of Western Union, all easily traceable. Fast forward to today and we have a myriad of decentralised cryptocurrencies like Moneto, Ethereum, and the most popular Bitcoin, which offer users fast transactions with full anonymity. If you're a cyber extortionist - what's not to love? This major development can be linked to the escalation in ransomware attacks across the world, being easy to use without the need for any middleman to transact.

According to a study earlier this year by 2Cambridge University, there are now over 6 million people transacting with Bitcoin, the majority of which is legitimate business.

 

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