Published: Fri, June 28, 2019
Electronics | By Kelly Massey

Florida cities pay out $1mn in bitcoin to ransomware hackers

Florida cities pay out $1mn in bitcoin to ransomware hackers

Lake City became the second Florida city to pay a substantial ransomware demand to hackers in less than a week.

In Riviera Beach, which has 35,000 residents, the hackers apparently got into the city's system when an employee clicked on an email link that allowed them to upload malware.

Lake City's insurer was contacted by the hackers, who demanded a random payment of 42 bitcoins, which translates toughly into $500,000.

While there is obviously an upfront cost for recovery of data including the ransom if paid, the often more expensive cost of ransomware attack ends up being the total cost of downtime - often 5-10x the actual ransom amount.

The east coast American city of Baltimore for example refused to pay hackers their demand for $76,000 in bitcoins, and it took over a month to recover most of its computers and IT infrastructure after it was crippled by a devastating ransomware attack. The report by ZDNet states that the IT department disconnected the infected computers about ten minutes after the attack began.

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Lake City's mayor, Stephen Witt, told the American news channel: "I would've never dreamed this could've happened, especially in a small town like this".

Hackers have found a sweet spot in encrypting and attacking municipal computer systems.

Moreover, they made a decision to pay $600,000 to the hacker. The effects were serious and was said to have affected real estate businesses in the city because they were unable to process payments. "We have also contracted an outside consultant with expertise in combating this sort of attack", city manager Joe Helfenberger said in a statement at the time. "Utility payments can still be made in-person at City Hall, however, credit card payments are now not available". It received the decryption key and its IT department is working to restore its systems. Riviera Beach, in South Florida, is a predominantly African American city that is also home to Singer Island on the coast where many wealthy people live.

Some security experts say that it appears that the city's reference to "triple threat" may refer to an attack described by security firm Cybereason earlier this year that involves using the Emotet and TrickBot Trojans to deliver Ryuk ransomware.

The best way is to stay away from such attacks is by installing high tech security in the computer systems. The sophistication of these threat actors is increasing faster than many organizations and cities are able to keep pace with.

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