Banks have begun to stockpile bitcoin to pay cyber ransoms

A number of London's largest banks have begun to stockpile bitcoin to prepare for potential cyber attacks.

In an effort to prepare themselves for potential ransomware attacks, several of London's largest banks have begun to stockpile bitcoins in case they are faced with a situation where they would have to pay off cyber attackers to prevent their IT systems from being held hostage.

The virtual currency bitcoin is often used by the criminals behind ransomware attacks, as it is untraceable and can easily be exchanged for cash in the real-world. A leading IT expert has revealed that some banks have begun to look into acquiring vast amounts of the currency in case they find their systems being held for ransom.

On Friday, the largest distributed denial of service (DDoS) attack ever seen was able to take down a number of high-profile sites including Amazon, Twitter and Spotify. With the public release of the source code for the Mirai malware, cyber attackers can easily recruit tens of thousands of internet-connected devices to be used in such an attack in the future.

Though the DNS service provider that was targeted in the attack, Dyn, was not forced to pay a ransom, it could very well happen the next time that Mirai is utilised by cyber attackers. This is why banks and other businesses are now taking seriously about keeping large amounts of bitcoin on hand.

Former technology ambassador for the UK government and chair of the annual international e-crime Congress, Dr. Simon Moores, has pointed out that many banks believe it could very well be cheaper to pay cyber attackers than to risk having their businesses shuttered by such an attack. Moores offered further insight into the way financial institutions have begun to view bitcoin following the recent string of advanced cyber attacks, saying: “The police will concede that they don't have the resources available to deal with this because of the significant growth in the number of attacks. From a purely pragmatic perspective, financial institutions  are now exploring the need to maintain stocks of bitcoin in the unfortunate event that they themselves become the target of a high-intensity attack, when law enforcement perhaps might not be able to assist them at the speed with which they need to put themselves back in business.”

Moores did not reveal which banks have begun to buy up bitcoins but it is clear that many are doing so and others are considering following suit. Businesses faced with cyber attack could lose far more than what it would cost to pay the cyber attackers to call it off. Last year, TalkTalk lost 101,000 customers and lost £60 million as the result of such an attack and in hindsight it would have been cheaper to pay off the criminals behind the attack.

Cyber attacks and the cost associated with them are no longer seen as an issue just for the IT department, but rather as one which will affect a company as a whole. Moores noted how businesses have changed their outlook on the issue, saying: “Big companies are now starting to worry that an attack is no longer an information security issue, it's a board and shareholder and customer confidence issue.

"What we are seeing is the weaponisation of these [hacking] tools.  It becomes a much broader issue than businesses ever anticipated.” 

Image Credit: Julia Tsokur / Shutterstock

ABOUT THE AUTHOR

Anthony currently resides in South Korea where he teaches and experiences Korean technological advances first hand.