London’s largest banks plan to hoard bitcoins to help them pay cyber ransoms

Several of London’s largest banks are looking to stockpile bitcoins in order to pay off cyber criminals who threaten to bring down their critical IT systems.

The virtual currency, which is highly prized by criminal networks because it is difficult to trace, is being acquired by blue chip companies in order to pay ransoms, according to a leading IT expert.

Last month, hackers attacked the websites of a number of leading online companies including Twitter, Spotify and Reddit. They used a special code to harness the power of hundreds of thousands of internet-connected home devices, such as CCTV cameras and printers, to launch “distributed denial of service” (DDoS) attacks through a US company called Dyn, which provides directory services to online companies. DDoS attacks involve inundating computer servers with so much data traffic that they cannot cope.

There is no evidence that Dyn was the subject of extortion demands but it has become apparent that hackers have been using the code to threaten other businesses into paying them with bitcoins or risk becoming the target of similar attacks.

Dr Simon Moores, a former technology ambassador for the UK government and chair of the annual international e-Crime Congress, the global body that brings together IT professionals, said the scale and ferocity of the attacks meant some banks were coming round to the view that it was cheaper to pay off the criminals than risk an attack.

“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,” Moores said. “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.”

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Moores declined to identify the banks buying up bitcoins but it is understood senior police officers have been made aware of the practice. The cost to businesses of an attack can far outweigh paying off the blackmailers: telecoms provider TalkTalk lost 101,000 customers and suffered costs of £60m as a result of a cyber attack last year.

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

In recent months, DDoS attacks have led to around 600 gigabits of data a second being directed at targets – more than enough, according to experts, to bring most websites down.

Moores predicted that the situation was becoming critical. “Once it goes above a terabit, that wipes out any protection. No current protection systems can deal with that sort of flood.”

The problem facing businesses battling the hackers is becoming one of scale. The devices the hackers can recruit to launch their attacks is growing exponentially. It is estimated that there are anywhere between 7bn and 19bn devices connected to the IoT at the moment. Conservative predictions suggest that this figure will balloon to between 30bn and 50bn within five years.

At some point, Moores believes that the dam will burst as the rollout of connected smart devices will allow for the harnessing of devastating computer power that can no longer be repelled by existing IT security systems.

He draws an analogy with financial crises, predicting that a “Lehman Brothers moment” is on the cards.

“We’ve got to come to grips with this,” Moores said. “Everybody’s overexposed.”

Source: thequardian.com