Report: Bitcoin Cyber Attacks Surge 200% in 8 Months

Analysts say the upward trend in cyber attacks is closely related to the price of bitcoin.

The number of bitcoin-related cyberattacks has jumped nearly 200 percent in the past eight months since the recent crypto bull market began.

According to a report by security firm Barracuda Networks, the number of bitcoin-related phishing and business email compromise attacks jumped 192 percent between October 2020 and May 2021.

Analysts say the surge in cyberattacks is closely tied to the price of bitcoin – BTC rose nearly 400% during that period.

The bull market came against a backdrop of increased interest in bitcoin from institutional investors, with companies including MicroStrategy and Tesla announcing that they were adding bitcoin to their corporate balance sheets. As Bitcoin made headlines, retail investor enthusiasm soared, along with a spike in cyber attacks targeting investors’ Bitcoin positions.

Report: Bitcoin Cyber Attacks Surge 200% in 8 Months

Fleming Shi, chief technology officer at Barracuda Networks, said most of the previous attackers posed as financial institutions and targeted users’ banking credentials. In recent months, however, they have changed their approach and started using similar tactics to steal bitcoin.

One of the most popular tactics used by hackers is to use fake bitcoin wallets or other crypto-related applications to steal login credentials by sending false security alerts to victimized users, analysts said.

Another tactic often used by cybercriminals is spear phishing (a method of targeting specific individuals in an organization based on information already obtained) and ransom attacks (in which attackers claim to have compromised videos or information from victimized users). These attackers threaten to make the information public if the victim doesn’t pay the ransom in bitcoin.

According to Barracuda, one way for organizations to defend themselves against such threats is to “train users and employees to recognize the latest techniques used by hackers” and to back up their data to ensure they are protected from the surge in ransomware attacks.

The report from Barracuda Networks follows a number of recent ransomware attacks, including those against Colonial Pipeline, the largest operator of refined petroleum products pipelines in the United States, and JBS, a Brazilian meat processing giant.

Colonial Pipeline was forced to shut down its critical fuel network supplying the eastern seaboard states of the U.S. on May 7 local time as a result of a ransomware attack, ultimately paying $4.4 million worth of cryptocurrency ransom to the hackers. The hacker group Darkside has since had its cryptocurrency and servers confiscated by authorities and has shut down operations. The U.S. government has recovered 63.7 of the 75 bitcoin ransoms previously paid by Colonial, and the Department of Justice has authorized the government to seize those 63.7 bitcoins.

The ransom paid by JBS was even higher. Andre Nogueira, CEO of JBS SA’s U.S. subsidiary JBS USA Holdings, said at the time that the cyberattack caused the company to temporarily shut down several plants responsible for processing nearly one-fifth of the nation’s meat supply, and thus had to pay an $11 million bitcoin ransom to cybercriminals to resolve the dilemma.

According to Chainalysis, total crypto-ransomware payments last year more than tripled from 2019 levels to $350 million, but DigitalMint told CNBC that figure may be underestimated, and Grens believes the true figure is closer to $1 billion. In April, a working group of more than 60 members from Amazon Web Services (AWS), Microsoft, the FBI and the Secret Service submitted recommendations to the White House on how to address the ransomware threat.

In the wake of these large ransomware attacks, the U.S. Department of Justice announced in early June that it was elevating ransomware investigations to a priority level equivalent to terrorism. In internal guidance sent to U.S. Attorneys’ offices nationwide, the DOJ said information about ransomware investigations should be centrally coordinated with a recently formed task force in Washington.

Then in mid-June, after speaking with Russian President Vladimir Putin, Biden hinted that some progress had been made in addressing ransomware attacks on critical infrastructure. The two could reach a cybersecurity agreement on ransomware attacks.

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