Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Attacks/Breaches

Attackers Hit Ceiling in Ransomware Demands

New Bedford, Massachusetts' refusal to pay a $5.3 million ransom highlights how victim towns and cities may be hitting the limit to what they're willing to spend to speed recovery.

Cyber extortionists' ransom demands have surged in recent years, as ransomware cotinues to cripple the operations of manufacturers, hospitals, and — most recently — local governments.

Yet those demands may have hit an upper limit. 

On September 4, Mayor Jon Mitchell of New Bedford, Mass., announced that the town refused to pay a $5.3 million ransom demand to the operator that had infected municipal systems with a variant of Ryuk. Instead, the city responded with a $400,000 counteroffer, which would have been paid from an insurance reimbursement and "consistent with ransoms recently paid by other municipalities," Mitchell said during a press conference.

Yet the attacker refused, stalling the negotiation.

"The attacker declined to make a counteroffer, rejecting the cities position outright," Mitchell said. "Without a counteroffer, the city faced the prospect of negotiating against itself, a course that I would not entertain, even if using insurance proceeds. "

The attack and negotiation underscore that ransomware operators may be hitting the limit to what companies and organizations are willing to pay to speed recovery. In 2017, South Korean Web hosting provider Nayana paid $1 million to cybercriminals to recover 3,400 customer websites on roughly 150 Linux servers, but seven-figure payments are extremely rare.

Earlier this summer, Riviera Beach, Fla., agreed to pay 65 bitcoin, or $600,000, to extortionists to regain access to its municipalities' systems and data. A week later, Lake City, Fla., paid 42 Bitcoin, or $460,000, in ransom to decrypt data on its computer systems.

Local governments are among the most vulnerable targets because they generally do not have the money to hire top cybersecurity workers or providers, but they can't afford to have operations disrupted, says Adam Meyers, vice president of intelligence for security-services provider CrowdStrike. 

"[The attackers] go after organizations that have some sort of operational mandates — they have to be up and running," he says. "Local government can't afford to be down, so they are banking on these organizations paying the ransom because they don't have a choice."

The attack on New Bedford came directly from that playbook.

In the early hours of July 5, the attackers activated a variant of the Ryuk ransomware on the network. Through a combination of "luck, skill, and system architecture," the city's manager of information system noticed odd behavior on the network and started taking down systems, Mayor Mitchell said. The IT professionals responded quickly enough to limit the spread of Ryuk to 158 systems, or about 4% of the cities total IT assets.

When the ransom demand came, the mayor decided to negotiate.

"The city was ... faced with the question of whether the task of restoring the computer system without obtaining an encryption key might justify a response to the ransomware [operators]," he said.

Towns are notoriously cash-strapped, which may restrain attackers to some degree. 

Taxpayers are not eager for their towns' governments to pay ransoms to cybercriminals. In a study of 2,200 US citizens, nearly 60% said they do not favor the use of taxpayer funds to pay ransom demands, according to a survey conducted by Morning Consult for IBM Security. More than 60% of those responding to the survey argued it is better to pay for recovery and improvement of the systems affected.  

"The use of ransomware to hold cities hostage for ransom payments continues to grow, and as those impacted pay off the attackers' ransom, the more the price continues to increase," Wendi Whitmore, vice president of threat intelligence for IBM Security, in a statement. "One common misconception is that paying the ransom immediately solves the problem, however doing so doesn't always guarantee swift recovery of infected devices. It requires significant time and investment to decrypt devices, and there's always the chance that paying criminals still won't result in unlocked files at all."

For the most part, ransomware operators will continue to attack companies, where the return on investment is much better than consumer-focused attacks, says Crowdstrike's Meyers. Allowing victims to name their price in negotiations runs counter to that trend.

"The ransom actors have some number they will allow you to negotiate to," he says. "If they reduce that number for one [victim], they have to do it for everyone."

In the end, the federal government may have to step up and help cities and local government protect their networks from attacks. Almost 90% of US citizens favor an increase in federal funding of cybersecurity to improve municipalities defenses, according to the IBM/Morning Consult survey.

Related Content:

Check out The Edge, Dark Reading's new section for features, threat data, and in-depth perspectives. Today's top story: "Meet FPGA: The Tiny, Powerful, Hackable Bit of Silicon at the Heart of IoT."

Veteran technology journalist of more than 20 years. Former research engineer. Written for more than two dozen publications, including CNET News.com, Dark Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards for journalism, including Best Deadline ... View Full Bio
 

Recommended Reading:

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
COVID-19: Latest Security News & Commentary
Dark Reading Staff 8/3/2020
Pen Testers Who Got Arrested Doing Their Jobs Tell All
Kelly Jackson Higgins, Executive Editor at Dark Reading,  8/5/2020
New 'Nanodegree' Program Provides Hands-On Cybersecurity Training
Nicole Ferraro, Contributing Writer,  8/3/2020
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Current Issue
Special Report: Computing's New Normal, a Dark Reading Perspective
This special report examines how IT security organizations have adapted to the "new normal" of computing and what the long-term effects will be. Read it and get a unique set of perspectives on issues ranging from new threats & vulnerabilities as a result of remote working to how enterprise security strategy will be affected long term.
Flash Poll
The Changing Face of Threat Intelligence
The Changing Face of Threat Intelligence
This special report takes a look at how enterprises are using threat intelligence, as well as emerging best practices for integrating threat intel into security operations and incident response. Download it today!
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2020-15820
PUBLISHED: 2020-08-08
In JetBrains YouTrack before 2020.2.6881, the markdown parser could disclose hidden file existence.
CVE-2020-15821
PUBLISHED: 2020-08-08
In JetBrains YouTrack before 2020.2.6881, a user without permission is able to create an article draft.
CVE-2020-15823
PUBLISHED: 2020-08-08
JetBrains YouTrack before 2020.2.8873 is vulnerable to SSRF in the Workflow component.
CVE-2020-15824
PUBLISHED: 2020-08-08
In JetBrains Kotlin before 1.4.0, there is a script-cache privilege escalation vulnerability due to kotlin-main-kts cached scripts in the system temp directory, which is shared by all users by default.
CVE-2020-15825
PUBLISHED: 2020-08-08
In JetBrains TeamCity before 2020.1, users with the Modify Group permission can elevate other users' privileges.