City banks plan to hoard bitcoins to help them pay cyber ransoms

["David Farber" <farber () gmail com>]

Begin forwarded message:

From: Hendricks Dewayne <dewayne () warpspeed com>
Subject: [Dewayne-Net] City banks plan to hoard bitcoins to help them pay cyber ransoms
Date: October 23, 2016 at 10:18:13 AM EDT
To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>
Reply-To: dewayne-net () warpspeed com

City banks plan to hoard bitcoins to help them pay cyber ransoms
Experts say blue chip companies have decided it’s cheaper to deal with extortionists than risk damaging attacks
By Jamie Doward
Oct 22 2016
<https://www.theguardian.com/technology/2016/oct/22/city-banks-plan-to-hoard-bitcoins-to-help-them-pay-cyber-ransoms>

Several of London’s largest banks are looking to stockpile bitcoins in order to pay off cyber criminals who threaten to 
bring down their critical IT systems.

The virtual currency, which is highly prized by criminal networks because it cannot be traced, is being acquired by 
blue chip companies in order to pay ransoms, according to a leading IT expert.

On Friday, hackers attacked the websites of a number of leading online companies including Twitter, Spotify and Reddit. 
They used a special code to harness the power of hundreds of thousands of internet-connected home devices, such as CCTV 
cameras and printers, to launch “distributed denial of service” (DDoS) attacks through a US company called Dyn, which 
provides directory services to online companies. DDoS attacks involve inundating computer servers with so much data 
traffic that they cannot cope.

There is no evidence that Dyn was the subject of extortion demands but it has become apparent that hackers have been 
using the code to threaten other businesses into paying them with bitcoins or risk becoming the target of similar 
attacks.

Dr Simon Moores, a former technology ambassador for the UK government and chair of the annual international e-Crime 
Congress, the global body that brings together IT professionals, said the scale and ferocity of the attacks meant some 
banks were coming round to the view that it was cheaper to pay off the criminals than risk an attack.

“The police will concede that they don’t have the resources available to deal with this because of the significant 
growth in the number of attacks,” Moores said. “From a purely pragmatic perspective, financial institutions are now 
exploring the need to maintain stocks of bitcoin in the unfortunate event that they themselves become the target of a 
high-intensity attack, when law enforcement perhaps might not be able to assist them at the speed with which they need 
to put themselves back in business.”

Moores declined to identify the banks buying up bitcoins but it is understood senior police officers have been made 
aware of the practice. The cost to businesses of an attack can far outweigh paying off the blackmailers: telecoms 
provider TalkTalk lost 101,000 customers and suffered costs of £60m as a result of a cyber attack last year.

“Big companies are now starting to worry that an attack is no longer an information security issue, it’s a board and 
shareholder and customer confidence issue,” Moores said. “What we are seeing is the weaponisation of these [hacking] 
tools. It becomes a much broader issue than businesses ever anticipated.”

[snip]

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