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Ransomware

Malicious software used in ransom demands

  • 32 min read
  • 7 chapters

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Through Malware, Hyperlink and Phishing

Ransomware attacks are typically carried out using a Trojan disguised as a legitimate file that the user is tricked into downloading or opening when it arrives as an email attachment. However, one high-profile example, the WannaCry worm, traveled automatically between computers without user interaction.

Starting as early as 1989 with the first documented ransomware known as the AIDS trojan, the use of ransomware scams grew internationally. There were 181.5 million ransomware attacks worldwide in the first six months of 2018, 229% more than the first six months of 2017. In June 2014, security software company McAfee released data showing that it had collected more than double the number of ransomware samples that quarter than it had in the same quarter the previous year. CryptoLocker was particularly successful, procuring an estimated US$3 million before it was taken down by authorities, and CryptoWall was estimated by the US Federal Bureau of Investigation (FBI) to have accrued over US$18 million by June 2015. In 2020, the US Internet Crime Complaint Center (IC3) received 2,474 complaints identified as ransomware, with adjusted losses of over $29.1 million. The losses could exceed this amount, according to the FBI. Globally, according to Statista, there were about 623 million ransomware attacks in 2021, and 493 million in 2022.

Ransomware payments were estimated at $1.1 billion in 2019, $999m in 2020, a record $1.25bn in 2023, and a sharp drop to $813m in 2024, attributed to non-payment by victims and action by law enforcement.

Operation

The concept of file-encrypting ransomware was invented and implemented by Young and Yung at Columbia University and was presented at the 1996 IEEE Security & Privacy conference. It is called cryptoviral extortion and it was inspired by the fictional facehugger in the movie Alien. Cryptoviral extortion is the following three-round protocol carried out between the attacker and the victim.

  1. [attacker→victim] The attacker generates a key pair and places the corresponding public key in the malware. The malware is released.
  2. [victim→attacker] To carry out the cryptoviral extortion attack, the malware generates a random symmetric key and encrypts the victim's data with it. It uses the public key in the malware to encrypt the symmetric key. This is known as hybrid encryption and it results in a small asymmetric ciphertext as well as the symmetric ciphertext of the victim's data. It zeroizes the symmetric key and the original plaintext data to prevent recovery. It puts up a message to the user that includes the asymmetric ciphertext and how to pay the ransom. The victim sends the asymmetric ciphertext and e-money to the attacker.
  3. [attacker→victim] The attacker receives the payment, deciphers the asymmetric ciphertext with the attacker's private key, and sends the symmetric key to the victim. The victim deciphers the encrypted data with the needed symmetric key thereby completing the cryptovirology attack.

The symmetric key is randomly generated and will not assist other victims. At no point is the attacker's private key exposed to victims and the victim need only send a very small ciphertext (the encrypted symmetric-cipher key) to the attacker.

Ransomware attacks are typically carried out using a Trojan, entering a system through, for example, a malicious attachment, an embedded link in a phishing email, or a vulnerability in a network service. The program then runs a payload, which locks the system in some fashion, or claims to lock the system but does not (e.g., a scareware program). Payloads may display a fake warning purportedly by an entity such as a law enforcement agency, falsely claiming that the system has been used for illegal activities, contains content such as pornography and "pirated" media.

Some payloads consist simply of an application designed to lock or restrict the system until payment is made, typically by setting the Windows Shell to itself, or even modifying the master boot record and/or partition table to prevent the operating system from booting until it is repaired. The most sophisticated payloads encrypt files, with many using strong encryption to encrypt the victim's files in such a way that only the malware author has the needed decryption key.

Payment is virtually always the goal, and the victim is coerced into paying for the ransomware to be removed either by supplying a program that can decrypt the files, or by sending an unlock code that undoes the payload's changes. While the attacker may simply take the money without returning the victim's files, it is in the attacker's best interest to perform the decryption as agreed, since victims will stop sending payments if it becomes known that they serve no purpose. A key element in making ransomware work for the attacker is a convenient payment system that is hard to trace. A range of such payment methods have been used, including wire transfers, premium-rate text messages, pre-paid voucher services such as paysafecard, and the Bitcoin cryptocurrency.

In May 2020, vendor Sophos reported that the global average cost to remediate a ransomware attack (considering downtime, people time, device cost, network cost, lost opportunity and ransom paid) was $761,106. Ninety-four percent of organizations had their data restored, with 56% of ransomware victims retrieving data from backups, as opposed to 26% when paying the ransom.

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