Today, computers are running enterprises, driving trains and cars, and performing surgical operations. Data processed by and stored in company computers are often their most valuable resource. Recent ransomware attacks, WannaCry and Petya (also known as NotPetya), show that damage caused to computers and data can also have tangible consequences in the physical world; from paralysing all operations of a company, to causing life-threatening malfunctions of medical equipment. The high stakes to businesses of their data and computer systems make ransomware attacks an attractive target for cybercriminals.
What is ransomware?
Ransomware – malicious software used for financial gain – is currently one of the most widespread methods for cyberattacks. Once it infects a computer, ransomware partially or fully denies the victim computer access by locking or encrypting computer files. The criminals then demand a ransom from the victim – most often in bitcoin cryptocurrency that ensures a high level of anonymity in transactions – in order to return access of the captured resources to the victim. From an infected computer, ransomware can spread across a company’s network; depending on its configuration, it can also spread via the Internet.
WannaCry and (not)Petya
In the last two months, two massive ransomware attacks have disrupted businesses, educational establishments and health institutions around the world. In May 2017, the WannaCry attack hit between 200,000 and 300,000 victims in at least 150 countries within several days, with victims including product lines of Renault, Spanish Telefonica, international shipping company FedEx, German railway operator Deutsche Bahn, and Britain’s NHS hospitals. The Petya or NotPetya (“Petya”) ransomware attack broke out a month later. Petya started as an attack on the Ukrainian government and businesses, and went on to affect companies around the world, including France’s BNP Paribas, Russian steel company Evraz and oil company Rosneft. Both WannaCry and Petya exploited a vulnerability in Microsoft Windows known as Eternal Blue, which was discovered by the US National Security Agency and leaked online by a hacker group called Shadow Brokers in April 2017.
The WannaCry outbreak started by infecting a computer through an email tricking an unsuspecting user into clicking on an attached file which contained the malicious program. Designed as a self-replicating program (known as a worm), WannaCry spread from computer to computer through organisations’ networks and through Internet searches for Windows vulnerabilities which it was designed to exploit. In Petya’s case, the mechanism was more sophisticated: the malicious code was initially incorporated into an update of accounting software M.E.Doc that companies working with the Ukrainian government were obliged to use. Later, cybercriminals also spread ransomware by email through a phishing campaign. Unlike WannaCry, Petya ransomware was more targeted: it only affected computers inside the network of an infected computer and did not spread via the Internet.
Both WannaCry and Petya demanded a fairly modest ransom of USD 300 in bitcoin. In both cases, the monetisation mechanism was criticised by cybersecurity experts as amateurish. In addition, as later discovered by cybersecurity experts, Petya was not typical ransomware, as it was an instrument of destruction rather than extortion. Information security firms Kaspersky and Comae Technologies reported that files affected by Petya could not be decrypted, and permanent damage was caused to the hard disk. Therefore, a state-sponsored actor is believed to have been involved in the Petya attack.
In addition to major disruption to operations of victims struck by WannaCry and Petya, and costs to restore information systems and files, the ransomware attacks are likely to spark a stream of civil liability suits against these companies and institutions from customers, business partners, and patients.
For providers of software whose vulnerabilities were exploited by ransomware, it is as yet uncertain if they will be subject to liability for leaving users exposed to the attacks. In the meantime, the head of Ukrainian Cyber Police Serhiy Demydiuk has announced that the company supplying M.E.Doc software is under investigation and will face charges. Although repeatedly warned by information security companies about the vulnerability of its software, M.E. Doc did not take appropriate measures to rectify it. On a more practical note, the Indian government is using the ransomware attacks as a negotiation tool. The Indian government has asked Microsoft to offer a sharply discounted one-time deal to more than 50 million Indian users so that they can upgrade to the latest Windows 10 operating system. If Microsoft agrees, this deal could cost several billion dollars in lost revenue.
The WannaCry and Petya ransomware attacks are alarming in several ways. First, they reveal the scale of the cybersecurity problem faced by organisations of all sizes – from small and medium-sized, to multinational corporations and health and educational institutions. Cybercriminals no longer target individuals, but rather businesses. Second, they demonstrate the level of sophistication of ransomware and its increasing incremental innovation. For example, unlike WannaCry, Petya ransomware was also able to infect computers where Windows security update was installed, if this computer was on the same network as an already-infected computer.
More generally, ransomware is, according to multinational technology firm Cisco, “on pace to be a USD 1 billion a year criminal industry”. The costs of developing ransomware are low, and potential profits are incomparably high. The new phenomenon of ransom-as-a-service – essentially malware “on demand” – allows any potential cybercriminal to obtain ransomware at a fraction of the potential profits gained from its use. With almost no barriers to entry, ransomware is a competitive industry, and will innovate.
Ransomware is here to stay. A highly competitive industry, it will innovate by creating more sophisticated ways of infecting computers and spreading across private networks and the Internet.
To minimise the risk of being affected by ransomware, it is crucial to: keep software updated across all devices; use reliable information security software; and create regular updates on devices not connected to the network. Information security should be incorporated into the design of IT products and services at their development stage. However, staying ahead in a cybersecurity arms race is a challenging task, and no technical measure is bulletproof.
To mitigate negative consequences in the event of a ransomware attack, we recommend setting up a compliance and enforcement framework addressing cybersecurity risks, including policies on information risk management and incident response. This framework should be complemented by educational programmes, given that human error can play a role in the spread of ransomware. When designing cybersecurity measures and incident response, be mindful of the delicate balance between security and privacy.
Civil liability risks in the aftermath of a ransomware attack can be addressed by the timely revision of contracts with customers and business partners. The robustness of these contractual solutions, however, is closely linked to the level of a company’s security measures.
Once hit by a ransomware attack, think twice before paying the ransom. There is no guarantee that files can be or will be decrypted. Instead, consider involving law enforcement authorities. Ransomware attacks constitute a criminal offence in many countries, including the Netherlands, France, Germany, Japan, Canada, the UK and the US. In the Netherlands, a ransomware attack can be reported to the Dutch police, including the Dutch National High Tech Crime Unit, which specialises in major international cybercrime cases and maintains close ties with other law enforcement authorities internationally.