How bitcoin and Putin are enabling the ransomware crime spree

John Naughton

A combination of cyber attackers’ increased sophistication, the availability of cryptocurrencies and the activities of Russian security agencies has created a perfect storm

When Joe Biden met Vladimir Putin last month he must have realised that the chances of Russia extraditing ransomware beneficiaries were small. Photograph: Peter Klaunzer/Gett

Sat 10 Jul 2021 

I’ve just visited the Kaseya website. “We Are Kaseya,” it burbles cheerfully. “Providing you with best-in-breed technologies that allow you to efficiently manage, secure and back up IT under a single pane of glass.

“Technology,” it continues, “is the backbone of all modern business. Small to mid-size businesses deserve powerful security and IT management tools that are efficient, cost-effective, and secure. Enter Kaseya. We exist to help multi-function IT professionals get the most out of their IT tool stack.”

Translation: Kaseya produces remote management software for the IT industry. It develops and sells this software to remotely manage and monitor computers running Windows, OS X, and Linux operating systems. As many organisations will grimly confirm, managing your own IT systems is a pain in the arse. So Kaseya has lots of happy customers in the US, the UK and elsewhere.

Or, rather, it did have. On 2 July it was the victim of a ransomware attack that affected between 800 and 1,500 of its small business customers, potentially making it the largest ransomware attack ever. Such attacks are a form of kidnapping: intruders gain control of an organisation’s systems, encrypt its data, and demand payment (in cryptocurrency) in return for a key to decrypt the hostage data. In an impressive YouTube video posted on 6 July, Kaseya’s chief executive, Fred Voccola, said that the company had shut down the compromised program within an hour of noticing the attack, potentially stopping the hackers from hitting more customers. By industry standards, that was an agile and intelligent response. Other victims – such as the pipeline operator Colonial, and the Irish hospitals that were struck recently – have been much more traumatised.

So what is going on? Basically, what has happened is that, in a relatively short time, ransomware has become the new normal for organisations that are dependent on IT – which is basically every organisation in the industrialised world. And the fact that it happened to Kaseya, as Voccola put it, “just means it’s the way the world we live in is today”.

The attack on Kaseya affected between 800 and 1,500 of the businesses to which it provides services. Photograph: Dado Ruvić/Reuters

It is. So how did we get here? Three major factors were involved. The first was the invention and development of cryptocurrencies. Kidnapping in the old days was a risky business: the family might pay the ransom, but bundles of £20 notes were relatively easy to trace. Cryptocurrencies, on the other hand, are designed to be near-impossible to trace, so there’s no paper trail for police to follow.

“Ransomware is a bitcoin problem,” says the Berkeley researcher Nicholas Weaver, and doing something about it “will also require disrupting the one payment channel capable of moving millions at a time outside of money-laundering laws: bitcoin and other cryptocurrencies”

The second factor is that ransomware has changed from being an exploit for lone cybercriminals into an industrialised business. We saw this earlier with distributed denial-of-service (DDoS) attacks: once upon a time if you wanted to bring down a server you first had to assemble a small virtual army of compromised PCs to do your bidding; now you can rent such a “bot army” by the hour.

Much the same applies for ransomware: there are a number of criminal gangs, such as REvil, that operate like companies providing what is essentially ransomware-as-a-service (RaaS). Criminals select a target and use REvil’s services in return for giving it a slice of the proceeds. Ross Anderson, professor of computer security at Cambridge University, regards this is “a gamechanger for the cybersecurity business” and he’s right.

The third factor is geopolitics. We live in a world that was created by the peace of Westphalia, which in 1648 brought to an end the thirty years’ war and established the system of sovereign states, which essentially ensures that rulers can do what they like within their own jurisdictions. The RaaS “firm” REvil operates in Russia, a jurisdiction ruled by an autocratic kleptocracy which has – as a state – brilliantly exploited digital technology for propaganda, disruption of democratic processes at home and abroad, and for cyber-espionage on a grand scale. The other day, for example, the NSA revealed that since 2019 Russian security agencies had been using a supercomputer cluster for “brute force” password-guessing on millions of western online services. Since these machines can perform millions of guesses every second, the chances of any normal password remaining safe are pretty poor.

And so are the chances of US, EU or UK law-enforcement agencies getting to arrest and extradite the beneficiaries of ransomware attacks on western organisations – as Joe Biden doubtless discovered when he met Vladimir Putin in Geneva the other week. So the only thing the REvil crowd have to worry about for the time being is making sure they pay up when Putin’s goons come looking for his share of the crypto-loot.