Cyber Insurance paid to pay Ransomeware: Case Study & Case Law

A Canadian insurance company infected by ransomware virus paid off the cybercriminals using its cyber insurance policy. Their British reinsurers, having to disburse 109.25 Bitcoins, wanted it back from the blackmailing cybercriminals.

After infection, the unnamed Canadian company suffered a total lockdown of all of its systems and asked its reinsurance firm to pay the ransom so it could get back on its feet.

Paying off blackmailers holding a company to ransom is never advisable, many a time it is against the local law. Despite a negotiation that made criminals bring down their initial demand of $1.2m to $950k, the decryption tool provided had to be run on each and every affected device on the company's network.

It took five days to decrypt 20 servers and "10 business days" to unlock 1,000 desktop computers.

Neither company was going to pay out and forget the incident. The English reinsurer hired Chainalysis Inc, a "blockchain investigations firm", which eventually pinpointed the people responsible.

In the AA Versus Unknown Persons and Ors. [2019] EWHC 3556 (Comm) Case No: CL-2019-000746

The Unknowns were arraigned as below:

(1) PERSONS UNKNOWN WHO DEMANDED BITCOIN ON 10TH AND 11TH OCTOBER 2019

(2) PERSONS UNKNOWN WHO OWN/CONTROL SPECIFIED BITCOIN

(3) iFINEX trading as BITFINEX

(4) BFXWW INC trading as BITFINEX

IN THE HIGH COURT OF JUSTICE BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES COMMERCIAL COURT (QBD)

Hon. Justice Bryan said: "Whilst some of the Bitcoin was transferred into 'fiat currency' as it is known, a substantial proportion of the Bitcoin, namely, 96 Bitcoins, were transferred to a specified address. In the present instance, the address where the 96 Bitcoins were sent is linked to the exchange known as Bitfinex operated by the third and fourth defendants."

Bitfinex is a cryptocurrency exchange headquartered in the British Virgin Islands, though the court noted that one email address associated with the exchange was seemingly traced to China.

Justice Bryan said: "At the present time there is no evidence that [Bitfinex] are themselves, perpetrators of the wrongdoing, rather, it is said, they have found themselves the holder of someone else's property."

Hon. Justice ruled that Bitfinex probably knew who the two alleged ransom receivers were, saying: "I have no doubt that Bitfinex has the ability to access its records and its KYC [know your customer, finance sector ID rules] material to identify the information that is sought" about the two alleged blackmailers.

A Scottish MSP was caught red-handed promising ransomware decryption services when in reality all they were doing was paying off the cybercriminals and adding a windfall high margin. At least one study has found that less than half of companies paying off ransomware actually get their files back.

Meanwhile, A US federal judge has ruled that an insurer providing a "business owner's insurance policy" to National Ink & Stitch, which sustained a ransomware attack in 2016 and was forced to replace most of its IT infrastructure, must pay for the damages the security incident caused.

In her recent ruling, Judge Stephanie Gallagher of the U.S. District Court of Maryland wrote that the damage to Nation Ink & Stitch's computer infrastructure from a ransomware attack constituted "physical loss or damage" covered by the insurance policy and that the insurer must pay the costs to recover and rebuild the network. National Ink & Stitch is an Owings, Maryland-based embroidery and screen printing firm.

The insurer, Columbus, Ohio-based State Auto Property and Casualty Insurance Co., had denied coverage for the cost of replacing National Ink & Stitch's computer system, arguing that that the company had not experienced "direct physical loss of or damage to" its computer system, the judge noted in the ruling.

The ruling did not set a specific dollar figure, although National Ink & Stitch previously argued for a settlement of $310,000 in recovery costs, according to court documents. National Ink & Stitch and State Auto could be reached for comment.

Advocate (Dr.) Prashant Mali
Cyber & Privacy Expert

Prashant Mali Interview in Business Standard Newpaper

Ransom-payers are also the cause of ransomware proliferation: Prashant Mali

The ransom to retrieve files was reportedly $300, to be paid in virtual currency bitcoins

Nikita Puri July 1, 2017 Last Updated at 21:20 IST

Operations at a terminal of the country’s largest container port, Jawaharlal Nehru Port Trust in Mumbai, came to a standstill earlier this week. The process of loading and unloading containers was halted as the port’s computers shut down after a major cyber attack that swept across the globe. The aggressiveness of the malware showed that such attacks were capable of bringing both corporate and government networks to a sudden halt. The ransom to retrieve files was reportedly $300, to be paid in virtual currency bitcoins. Cyber law expert Prashant Mali, also an advocate at the Bombay High Court, tells Nikita Puri how to prevent mass-scale civil disruptions that future cyber attacks can result in. Edited excerpts:
 
First we had individual companies and high-networth individuals who were targets of ransomware, then WannaCry hit servers across the globe. Now another malware, which some are identifying as Petya, has sent corporations into a tizzy. Do you foresee more such threats?

 
To date, financial cyber crime has only grown and it is yet to peak, so I would say it’s written on the wall that many more such attacks are expected in the near future. Such threats loom large as the ransom is paid in bitcoins, so the criminals aren’t caught. One thing the police and the government can do is to ensure that citizens make compulsory declarations of purchase of bitcoins and other cryptocurrencies (like ethereum) when they file their income tax returns. This can help the government see who pays and how much because, I feel, ransom-payers are also the cause of ransomware proliferation.
 
Security experts confirm that the malware isn't really a ransomware, but a wiper designed to destroy data. Reportedly, because of “ its aggressive features,” the malware makes it impossible to retrieve certain files leading many to believe that this attack may not have been for money. Can this be seen as an attempt to test how far companies will go to protect data?
 
Even if cyber attacks don’t cause financial damage, they definitely throw open defences. Identifying fortresses that have holes in their system can be of interest to the state and non-state actors. This data of the number of loopholes is in demand and is sold at a premium price. There are different types of people involved in the dark world: many a time those who look for such holes, those who attack, and those who intend to get ransoms are all different.
 
Companies are often wary of making such attacks public. Security firm Symantec has said that India is the worst hit in Asia, but we have confirmation only from Mumbai’sJawaharlal Nehru Port Trust. Do you think information sharing could actually help build a better defence against such attacks?
 
By not reporting such attacks, companies are depriving the nation of a knowledge database that can help other companies develop better defences. Symantec and other (security) vendors also cannot be fully relied upon because fear is what they harp on. The more fear they put in Indians, the more they sell security products. The Insurance Regulatory and Development Authority of India and insurance companies should make it compulsory for clients to file a First Information Report (FIR) before claiming cyber insurance. Once reporting to some government agency becomes mandatory to claim insurance, companies would be motivated.
 
What are the security measures that one must take to avoid such attacks? 
 
No one can be immune in cyber space and that's the reality. Only cyber awareness in organisations can bring in cyber resilience. I would advise organisations to have multi-prong policies to establish a cyber security culture. I feel the highest level of cyber safety can be achieved by establishing a cyber security culture in the company, and a country can be cyber resilient by cultivating a culture of cyber security in society. Government should quadruple its budget for digital literacy programmes. For the government to be ahead of hackers, we need cyber spies: our law and enforcement agencies should implant cyber spies among cyber criminals. The chatter within their group helps the state to be ready for what is coming: we need cyber intelligence. 
 
Do you think companies should have ethical hackers on their pay rolls? 
 
I have an issue with the term “ethical hackers” because legally this isn’t right: those are two contradictory terms put together. People who use these terms are either doing it for branding purpose or are students. Companies should opt for services by cyber security researchers. 
 
Are India’s cyber laws equipped to handle such large-scale attacks?
 
No. Laws can be invoked when prima facie evidence is found against criminals and investigation can be completed if attribution to a criminal is possible. The legal framework to help enforcement agencies in India has serious flaws. Large-scale cyber attacks need multiple law and enforcement agencies to work together along with CERT-In (Indian Computer Emergency Response Team), but the protocol for this is yet to be developed. 
 
In the future, cyber attacks are going to affect government facilities meant for citizens: like centres for health, water etcetera. Even municipalities should coordinate with the aforementioned agencies to avoid mass scale civil disruption from cyber attacks.

Petya Ransomeware Attack : What to Do immediately

Petya/Petwrap ransomware

What is Petya Ransomeware do?

Ans: 

Ransomware, Petya does not encrypt files on a targeted system one by one.

Instead, Petya reboots victims computers and encrypts the hard drive's master file table (MFT) and rendering the master boot record (MBR) inoperable, restricting access to the full system by seizing information about file names, sizes, and location on the physical disk.

Petya replaces the computer's MBR with its own malicious code that displays the ransom note and leaves computers unable to boot.

Why it spreads fast?

Ans : Petya ransomware successful in spreading because it combines both a client-side attack (CVE-2017-0199) and a network based threat (MS17-010)

So patch both first!

Affected countries: UK, Ukraine, India, the Netherlands, Spain, Denmark, and others

Behavior:

Encrypts MFT (Master File Tree) tables for NTFS partitions and overwrites the MBR (Master Boot Record) with a custom bootloader that shows a ransom note and prevents victims from booting their computer.

Actions to be taken:

1. Block source E-mail address

wowsmith123456@posteo.net

2. Block domains:

http://mischapuk6hyrn72.onion/

http://petya3jxfp2f7g3i.onion/

http://petya3sen7dyko2n.onion/

http://mischa5xyix2mrhd.onion/MZ2MMJ

http://mischapuk6hyrn72.onion/MZ2MMJ

http://petya3jxfp2f7g3i.onion/MZ2MMJ

http://petya3sen7dyko2n.onion/MZ2MMJ

3. Block IPs:

95.141.115.108

185.165.29.78

84.200.16.242

111.90.139.247

4. Apply patches:

Refer(in Russian): https://habrahabr.ru/post/331762/

5. Disable SMBv1

6. Update Anti-Virus hashes

a809a63bc5e31670ff117d838522dec433f74bee

bec678164cedea578a7aff4589018fa41551c27f

d5bf3f100e7dbcc434d7c58ebf64052329a60fc2

aba7aa41057c8a6b184ba5776c20f7e8fc97c657

0ff07caedad54c9b65e5873ac2d81b3126754aac

51eafbb626103765d3aedfd098b94d0e77de1196

078de2dc59ce59f503c63bd61f1ef8353dc7cf5f

7ca37b86f4acc702f108449c391dd2485b5ca18c

2bc182f04b935c7e358ed9c9e6df09ae6af47168

1b83c00143a1bb2bf16b46c01f36d53fb66f82b5

82920a2ad0138a2a8efc744ae5849c6dde6b435d

myguy.xls EE29B9C01318A1E23836B949942DB14D4811246FDAE2F41DF9F0DCD922C63BC6

BCA9D6.exe 17DACEDB6F0379A65160D73C0AE3AA1F03465AE75CB6AE754C7DCB3017AF1FBD

As of a Kill-switch can be used for #Petya Ransomware. 

i.e. Just create a file "C:\Windows\perfc"

Does this affect you?* 

Though this attack is largely targeting companies, it's important you stay vigilant and take following precautionary measures.

- Always make sure your anti-virus is up-to-date to maximize the protection available to you.

- Don't click too quickly. This attack may be spreading through phishing or spam emails, so make sure you check an email's content for legitimacy. Hover over a link and see if it's going to a reliable URL. Or, if you're unsure about an email's content or the source it came from, do a quick search and look for other instances of this campaign, and what those instances could tell you about the email's legitimacy.

- Do a complete back up. Back up all your PCs immediately. If your machine becomes infected with Petya ransomware, your data could become completely inaccessible. Make sure you cover all your bases and have your data stored on an external hard drive or elsewhere.

- Apply system and application updates.Making sure your operating system is up to date will help contain the spread of this malware.

New age Cyber Crimes : 2016

New Age Cyber Crimes : 2016

New trends in cybercrime are emerging all the time, with estimated costs to the global economy running to billions of dollars.

In the past, cybercrime was committed mainly by individuals or small groups. Today, we are seeing highly complex cybercriminal networks bring together individuals from across the globe in real time to commit crimes on an unprecedented scale.

Criminal organizations turning increasingly to the Internet to facilitate their activities and maximize their profit in the shortest time. The crimes themselves are not necessarily new – such as theft, fraud, illegal gambling, sale of fake medicines – but they are evolving in line with the opportunities presented online and therefore becoming more widespread and damaging.

Identity theft

Identity theft and fraud is one of the most common types of cybercrime. The term Identity Theft is used, when a person purports to be some other person, with a view to creating a fraud for financial gains. When this is done online on the Internet, its is called Online Identity Theft. The most common source to steal identity information of others, are data breaches affecting government or federal websites. It can be data breaches of private websites too, that contain important information such as – credit card information, address, email ID’s, etc.

Ransomware

Ransomware enters your computer network and encrypts your files using public-key encryption, and unlike other malware this encryption key remains on the cyber criminals server. Attacked users are then asked to pay huge ransoms to receive this private key via Bit Coins.

DDoS attacks

DDoS attacks are used to make an online service unavailable and bring it down, by bombarding or overwhelming it with traffic from multiple locations and sources. Large networks of infected computers, called Botnets are developed by planting malware on the victim computers. The idea is normally to draw attention to the DDOS attack, and allow the hacker to hack into a system. Extortion and blackmail could be the other motivations.

Botnets

Botnets are networks of compromised computers, controlled by remote attackers in order to perform such illicit tasks as sending spam or attacking other computers.  Computer Bots can also be used act like malware and carry out malicious tasks. Then can be used to assemble a network of computers and then compromise them.

Up to now, most botnets have been assembled by constantly roaming the internet probing for PCs that are unprotected. When a vulnerable machine is discovered, it is infected with malware that lies there undetected, awaiting the command to start pinging the site that has been chosen for an attack. For the more sophisticated cybercriminal, though, this way of doing things is beginning to look obsolete. The PC market has peaked, so zombie machines will become rarer and existing PCs tend to be better managed and protected from intrusion than they used to be. We are getting to the point, in other words, where PC-based botnets are soyesterday.

So where is the smart online criminal going to go next? Obligingly, the tech industry has provided him with the capability to assemble even bigger botnets with much less effort. The new magic ingredient is the IOT internet of things – small, networked devices that are wide open to penetration. The attacks will come from large numbers of enslaved devices – routers, cameras, networked TVs and the like. 

Spam and Phishing

Spamming and phishing are two very common forms of cybercrimes. There is not much you can do to control them. Spam is basically unwanted emails and messages. They use Spambots.  Phishing is a method where cyber criminals offer a bait so that you take it and give out the information they want. The bait can be in form of a business proposal, announcement of a lottery to which you never subscribed, and anything that promises you money for nothing or a small favor. There are online loans companies too, making claims that you can get insecure loans irrespective of your location. Doing business with such claims, you are sure to suffer both financially and mentally. 

Phishing has its variants too – notably among them are Tabnapping, Tabjacking, Vishing & Smishing.   Such spamming and phishing attempts are mostly emails sent by random people whom you did not ever hear of. You should stay away from any such offers especially when you feel that the offer is too good. Do not get into any kind of agreements that promise something too good to be true. In most cases, they are fake offers aiming to get your information and to get your money directly or indirectly.

Social Engineering

Social engineering is a method where the cyber criminals make a direct contact with you using emails or phones – mostly the latter. They try to gain your confidence and once they succeed at it, they get the information they need. This information can be about you, your money, your company where you work or anything that can be of interest to the cyber criminals.

It is easy to find out basic information about people from the Internet. Using this information as the base, the cyber criminals try to befriend you and once they succeed, they will disappear, leaving you prone to different financial injuries directly and indirectly. They can sell the information obtained by you or use it to secure things like loans in your name. The latter case is of Identity theft. You should be very careful when dealing with strangers – both on phone and on the Internet.

Malvertising

Malvertising is a method whereby users download malicious code by simply clicking at some advertisement on any website that is infected. In most cases, the websites are innocent. It is the cyber criminals who insert malicious advertisements on the websites without the knowledge of the latter. It is the work of advert companies to check out if an advertisement is malicious but given the number of advertisements they have to deal with, the malverts easily pass off as genuine ads.

In other cases, the cyber criminals show clean ads for a period of time and then replace it with malverts so that the websites and advertisements do not suspect. They display the malverts for a while and remove it from the site after meeting their targets. All this is so fast that the website does not even know they were used as a tool for cybercrime. Malvertising is one of the fastest, increasing types of cybercrime.

PUPs

PUPs, commonly known as  Potentially Unwanted Programs are less harmful but more annoying malware. It installs unwanted software in your system including search agents and toolbars. They include spyware, adware, as well as dialers. Bitcoin miner was one of the most commonly noticed PUPs in 2013.

Drive-By-Downloads

Drive By Downloads too, come close to malvertising. You visit a website and it triggers a download of malicious code to your computer. These computers are then used to aggregate data and to manipulate other computers as well.

The websites may or may not know that they have been compromised. Mostly, the cyber criminals use vulnerable software such as Java and Adobe Flash and Microsoft Silverlight to inject malicious codes as soon as a browser visits the infected website. The user does not even know that there is a download in progress.

Remote Administration Tools

Remote Administration Tools are used to carry out illegal activities. It can be used to control the computer using shell commands, steal files/data, send location of the computer to a remote controlling device and more.

Exploit Kits

A vulnerability means some problem in the coding of a software that enables cyber criminals to gain control of your computer. There are ready to use tools (exploit kits) in the Internet market which people can buy and use it against you. These exploit kits are upgraded just like normal software. Only difference is these are illegal. They are available mostly in hacking forums as well as on the Darknet.

Scams

Notable among Internet scams are (IRS Scams, Insurance Scams, Matrimonial website scams, Techsupport Scams), scams which misuse the Microsoft name and other general tech support scams. Scamsters phone computer users randomly and offer to fix their computer for a fee. Every single day, scores of innocent people are trapped by scam artists into Online Tech Support Scams and forced to shell out hundreds of dollars for non-existent computer problems. 

People should note that employees involved in call centre scams are prosecutable under Section 66(C) & (D) of The IT Act,2000 as well sections of IPC involving Extortion and Cheating are also applied which are non-bailable offences, currently employees working in Mira Road IRS call centre Scam fraud are in jail without bail from last 15 days.