Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Emerging reports have revealed that the cybercriminals that attacked the US fuel pipeline, Colonial Pipeline Co, were paid $5 million in cryptocurrency.

According to Bloomberg, sources familiar with the situation confirmed the extortion fee was paid to enable them to resume fuel shipments.

Colonial Pipeline Attack Associated With DarkSide

The hefty ransom fee was reportedly paid within hours of the attack due to the mounting pressure on the pipeline operator to get gasoline and jet fuel flowing again across cities.

This is contrary to earlier reports asserting that Colonial Pipeline was refusing to negotiate with the attackers.

The FBI had earlier confirmed that the hackers were part of a Russia-linked DarkSide group specializing in digital extortion.

The Georgia-based Colonial ransomware attack crippled gas delivery systems in Southeastern states. Half of the gas stations in North Carolina, Virginia, Georgia, and South Carolina were reported empty.

The cybergang had reportedly demanded that the ransom be paid with a privacy coin like Monero (XMR).

However, the ransom payment goes against the advice of the Federal Bureau of Investigation (FBI). The government agency has repeatedly discouraged American ransomware victims from paying hackers. According to them, payment isn’t guaranteed to work and could incentivize cyber crimes.

Crypto Surge Propelling Ransomware Attacks

Ransomware refers to a category of malicious computer programs that force users into paying a ransom fee before they can access their data. The hackers involved in this type of cybercrime lock up victim’s files and demand ransom or payment for them to unlock it.

According to data from the blockchain analytics firm Chainalysis, crypto payments via ransomware attacks rose in 2020.

In its annual Crypto Crime Report released in January, Chainalysis said the amount paid by victims increased by 311% in 2020, reaching about $350 million in cryptocurrency. The average ransom paid by organizations in 2020 was $312,493, as stated in the report.

The vast majority of criminal crypto payments included in the report had to do with darknet markets and the general category of scams. A major reason for the increase in ransomware-connected payments during 2020 was coronavirus work-from-home measures, which opened up new vulnerabilities for many organizations.

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Author: Jimmy Aki

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