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Ransomware attackers extorted $456,8-million from victims in 2022 40% down from $765,6-million in the previous year but, before glasses are clinked in celebration, there are some significant caveats to consider.

The recent hack of Euler Finance where $135-million in staked Ether tokens (stETH) was drained from the protocol is a case in point. How organisations react to these attacks differs vastly and the outcomes will most definitely shape regulation in this beleaguered asset class.

In a recent poll conducted by Naoris Protocol, a decentralised cybersecurity platform, it would appear that businesses are indeed doubling down on ransomware attackers by refusing to pay the price of clawing back stolen/encrypted data.The poll asked the question: If you or your company were a victim of a ransomware attack, would you pay the attacker (including trying to negotiate a lower fee)?.

Interestingly the majority of respondents (70,8%) said that they would not pay the ransom and would report the attack to the relevant authorities. This was surprising, as the findings do not correlate to other statistics on ransomware reporting. According to other reports, just 42% of companies who fall prey to a ransomware attack actually report it.

David Carvalho, CEO and co-founder of Naoris Protocol, says: Its much easier to take the moral high ground when the question is theoretical. When confronted with the reality of a ransomware attack that could cost your business millions per day, along with potential brand and reputational damage, businesses may be more reluctant to take a moral stance.

The next largest group in the poll 16,55% said they wouldnt pay the ransom nor report the attack, but would rely on backups to restore data. Other research shows that out of all ransomware victims 32% pay up, but they only get 65% of their data back with only 57% of businesses successful in recovering data from backups.

So this strategy does not work as an effective measure to retrieve data. To add insult to injury, more than a third of companies who paid a ransom to retrieve their data were targeted a second time and charged even more than the first attack, with 41% failing to recover all of their data.

While the number of successful ransomware attacks is down year on year, attack methods are evolving. Traditionally, attacks are carried out by encrypting target data and perpetrators charge victims a fee for the decryption key. Now, criminals are resorting to double extortion tactics, threatening to sell the data if the ransom isnt paid. They also use Denial of Service attacks and harassment via email or phone.

While the number of ransomware payouts has dropped, the average ransomware amount is increasing. Unit 42, a cyber risk assessment company, reports that the average ransom demanded in 2021 was approximately $2,2-million a 144% increase from the average demand of $900 000 from cases analysed in 2020.

Estimating the number of successful ransomware attacks (attacks that resulted either in data leaks or ransom payments) is challenging as reporting is opaque and inconsistent. Its estimated that between May 2021 and June 2022, there have been 3 640 successful ransomware attacks globally.

Roughly 73% of organisations have suffered at least one ransomware attack in the past 24 months and 60% of companies admitted that cybercriminals had been working inside their company for up to six months before the attack.

Other respondents in the Naoris Protocol poll (5,32%) said they would pay the ransom but not report it, and 7,32% said they would pay and report. Again, figures vary widely. According to a survey of 300 US-based IT decision-makers, 64% had been the victims of a ransomware attack in the last year, and 83% of victims paid the ransom.

There are several top class organisations doing analytics on cyberthreats and their reports have brought home the alarming extent and scale of cyberthreats. However its important to note that the make-up of sample audiences can vary widely, potentially putting bias on some results. For example, surveying a group of enterprise CEOs as opposed to an SME cohort would present material variances in the way they approach cybercrime.

Then there is the issue that no one wants to address: What happens to the data that gets stolen? Criminals will still have the files and could sell the information on the dark web with impunity.

Ultimately, if the company that has been subjected to an attack gets their data back and manages to dodge a reputational bullet by not reporting it, their clients and networks will still pay the price of the breach. Worse still, they wont even know their data is in the hands of criminals.

While ethically wrong, it is understandable why companies dont want to reveal they have been a victim of an attack. A report by IBM and Forbes found that 46% of organisations that experienced a cybersecurity breach suffered significant reputational damage.

A good example of this is Travelex, a foreign exchange company that collapsed into administration seven months after it suffered a ransomware attack. It disrupted the company for more than a month and they eventually paid the attackers $2,3-million.

Its becoming increasingly clear that companies and institutions will not be able to hide a ransomware breach in the future. Regulators and governments are suiting up against ransomware amid escalating attacks. Its a race against time, especially in the areas of critical infrastructure and government.

Currently, there is legislation on the table making it illegal for companies to pay ransoms. A 2020 ruling by the US Department of Treasurys Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) states most cases of paying a ransom are illegal.

The EU has followed suit EU member states can impose fines on paying ransoms under the Security of Network and Information Systems Directive (NIS Directive). Government proposals from leaders in Australia and appeals from Europol are also being tabled.

Ultimately the best cure is prevention and this starts with education of employees and individuals on the role they can play in thwarting the attacks of cybercriminals, says Carvalho. Emerging technology will also play a massive role in mitigating attacks. In an increasingly networked and decentralised world, every device with an Internet connection is a potential point of failure or point of entry for a cyberattack.

Traditional cybersecurity works on the premise that the access points are ring-fenced on their closed infrastructure network, Carvalho adds. However, in an increasingly decentralised and networked business environment the distribution of devices and cloud servers pose a risk as they become single points of failure regardless of current cybersecurity controls employees mobile phones, laptops, servers, for example.

IT architectures are centralised meaning there is a central point of control or authority, he says. This makes it easy for attackers to target and compromise the entire system or take over processes. This heavily impacts resilience to threats and business continuity even if threats are detected and risks are identified and known, its usually too late to stop a major breach.

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Ransomware: paying the price ... twice - IT-Online