The New Trend Of Cyber Extortion: Bitcoins As Ransom From Hapless Victims
Regulations pertaining to bitcoin usage in India in still considered as grey area by law-makers and financial wizards. In 2013, Reserve Bank had ‘warned’ against using them, when they said, “The creation, trading or usage of virtual currencies including Bitcoins are not authorized by any central bank or monetary authority. As such, there is no established framework for recourse to customer problems.”
However, such notifications by RBI or Government authorities are not deterring hackers from using bitcoins. Infact, such is the rise of its usage that hackers are now demanding bitcoin as ransom from hapless victims.
As per reports coming in, India’s first such instance of using bitcoin as ransom has emerged in Mumbai.
IT Admin of a prominent bank in Mumbai received an email from the management, which was infected with virus. As soon as the email was opened, the deadly ‘Lechiffre ransomware’ spread to several computers of the bank, and the whole IT infrastructure was held up. This ransomware encrypted the information and the operations were jammed.
In order to provide the decryption key, hackers demanded one bitcoin per computer, the total amount of which soon ran into millions.
As per information available, which is not confirmed, the bank eventually agreed to pay some amount as ransom before the computers belonging to the upper management level officials were released from this ransomware.
The same instance happened with a pharmaceutical company as well, when their computers were hacked and bitcoins were asked to provide the decryption keys.
Amit Jaju, executive director, cyber forensics, data analytics, EY, said, “Lechiffre encrypts data on computers and servers in the background using 256-bit public-key cryptography where the private key for decryption is only known to the hacker,”
The fact that hackers are now demanding bitcoins to release such encryption key speaks volume about the new cyber extortion norms being developed in India.
Using bitcoins, there is no evidence, or proof of the heist, and the hackers are protected from identification.
RBI Acknowledges Blockchain – The Database Behind Bitcoins
Reserve Bank of India (RBI) in a statement released last month, has acknowledged the existence of block chain, which is a special database which enables bitcoins transactions all over the world.
RBI has accepted the fact that bitcoins and such similar ‘crypto-currency systems’ has the ability to disrupt the existing financial platforms, and bring along major changes.
RBI said, “While these issues along with challenges for consumer protection and taxation related aspects are being debated, the key technical concept of ‘blockchain’ which underpins such crypto-currency systems, is drawing more attention now. With its potential to fight counterfeiting, the ‘blockchain’ is likely to bring about a major transformation in the functioning of financial markets, collateral identification (land records for instance) and payments system.”
Although RBI hasn’t accepted bitcoins as legal medium for financial transactions yet, it is clear that bitcoins and related technology are being accepted as a major force which can have far reaching consequences.
And the recent incidents where hackers are demanding bitcoins as ransom further confirm this fact.
Should the Indian Govt. come up with regulations related to bitcoin usage in India? What is the future of bitcoins in India?
It is high time that RBI and Government come up with the answers very soon.