Since the birth of Bitcoin, the cryptocurrency space has been the go-to industry for hackers seeking to prey on and take advantage of the ignorance of novices.
They may have started by hacking into exchanges and stealing tokens. However, they’ve slowly, but steadily graduated. Hackers have moved beyond hacking individuals. They’ve moved on to institutions.
The transition to the “Big Guys” spells trouble for diehard traders and investors ranging from individuals to institutions. They were gaining confidence in the deregulated space. When governments around the world began stepping up the efforts to govern the space, players scoffed.
Here, we’ll address how these ransomware attacks are wreaking havoc.
Spate of Ransomware Attacks Puts Spotlight on Cryptos
Ransomware is a type of malware that prevents companies from accessing its own data until you pay the attacker a ransom to get your data back. Even if the ransom is paid, the malware could infect other systems. It seems that every day we here about a ransomware attack on an American institution.
During the months of May 2021, hackers tapped into a Colonial Pipeline’s IT systems and stole their data. It ponied up $4.4 million to the hackers who call themselves the DarkSide. The FBI stepped in and seized about $2.3 million. The FBI agents identified the virtual currency wallet that the DarkSide hackers used to seize the money Colonial Pipeline paid.
Cringe Worthy Move
According to CNBC, FBI agents identified the virtual currency wallet that the DarkSide hackers used to collect payment from Colonial Pipeline. Identifying the wallet was key to the FBI being able to prevent DarkSide from using them.
While this recovery was good news for Colonial Pipeline, it was seen as bad news for Bitcoin’ and other cryptos’ investors and traders. On the news that the Feds had intervened, Bitcoin fell as much as 8% in 24 hours.
Crypto players entered the deregulated space because it is one area where governments could not flex their control methods. So, naturally, some are suspicious of the government’s move to recover this pipeline’s money. Colonial Pipeline’s valuation is estimated to be at least $3 billion. Furthermore, the company’s CEO defended paying the ransom. But the government felt it had to step in for this multi-billion pipeline.
The question becomes:
Was this done under the guise of “government wanting to protect” or was it done in line with other moves governments have made to throttle the space? There have been hundreds, if not thousands, of ransomware attacks. Why did this one receive so much attention?
Crypto players, like META 1, understand the risks hackers present. The META 1 Coin Trust was created to include a wallet for customers that hackers can’t easily tap.
Security initiatives within the crypto space are being advanced, including META 1. The implementation of its roadmap for 2022 initiative is key for it ward off cyber threats. Its plans call the implementation of quantum proof keys that will be unbreakable by classical and quantum computers.
Its team notes in its White paper:
[META 1 Coin Trust is the publisher of all required systems and wholly owns all source code for the complete Private Digital Currency ecosystem to include the wallet, coin, exchange and point of sales utilities. In-house resources have developed all software. Strategically controlling all system aspects at the most granular level “Source Code”].
In the meantime, observers are warning institutions about paying ransoms with Bitcoin. Global security company Kaspersky found that roughly 56% paid a ransom in 2020. However, only 29 % of ransomware victims were able to restore all their encrypted or blocked files following an attack, regardless of whether they paid a ransom.
It also found that of the victims who’d been attacked 50% lost at least some files, while 32% lost a significant amount. Kaspersky found 13% of these victims lost almost all of their data. The Wall Street Journal reported that the Biden administration has made it a priority to trace transactions that are paid to the ransomware culprits. The WSJ also reported that the Deputy National Security Adviser Anne Neuberger said U.S. officials are working with international partners on developing consistent policies for when to pay ransoms and how to trace them.
What sticks in the craws of many crypto players is the last part of that sentence, “…how to trace them.” What that entails is anyone’s guess, but given it’s the government, many are girding their loins.
Government intervention has the potential to derail the positive reputational gains that had been made in the space. Furthermore, the so-called help from any federal agency gives many in the deregulated space pause. Government folks sniffing around what they see as their turf wreaks of potential negatives too many.