iQuanti: In 2021, victims of ransomware attacks paid over $600 million in cryptocurrency to get their extortionists to back off. Although this number feels astronomical, the company claims that this is an underestimated figure and expects the actual number to be much higher. 

What is a ransomware attack?

Ransomware is malware, or malicious software, that utilizes encryption to hold the victim's information for ransom. This means that whether you are a personal user or a large organization, you would be completely blocked from accessing company applications, files, and even databases. If the victim or victims want to take back control, they must pay the ransom demanded by the attackers. 

Ransomware is oftentimes created to spread across a network, to target databases, and/or file servers. So, if the ransom is not paid, the ransomware attackers can very quickly paralyze an entire organization -- big or small.

According to the State of Ransomware Readiness report by cloud cybersecurity firm Mimecast, 80% of businesses around the world have been attacked by ransomware. Executives who participated in the research reported experiencing an average of 3,000 ransomware attacks over the last two years - that's an average of four attacks per day.

How is cryptocurrency enabling ransomware attacks?

To be clear, ransomware attacks would still be a big problem without cryptocurrency. However, the virtual means of payment has definitely added fuel to the fire. Criminals are out there and always looking for new anonymous methods to transport and hide their illegally obtained profits. For ransomware cyberattackers, cryptocurrencies like Bitcoin are the perfect solution. It allows quick and easy, cross-border, anonymous transactions that are extremely difficult to trace. 

Until recently, many cybercrimes were on a much smaller scale, involving theft of individual credit cards or bank accounts. When cryptocurrency became an option, attackers had a way to make and store their money outside of the global banking system. Making for a frictionless experience -- like ordering an Uber, but for ransom attacks.

Different cryptocurrencies have different levels of anonymity. For example, cryptocurrencies such as Monero and Zcash, have a lower level of security than Bitcoin, making the two virtual currencies more ideal for cybercriminals. 

Ultimately, Bitcoin is not completely anonymous, as the FBI proved in the Colonial Pipeline ransomware attack that upended the American oil pipeline system in May 2021. Then, the Justice Department was able to recover most of the multimillion-dollar ransom payment made after the cyberattack. But that was a first-of-its-kind occasion, undertaken by a specialized ransomware task force, which took a lot of resources and effort. 

What's being done to stop ransomware attacks?

Cryptocurrencies have become infamous for the difficulties lawmakers face when trying to regulate them. Nevertheless, some say that finding a way to properly regulate cryptocurrency effectively, like employing Anti-Money Laundering (AML) or financial terrorism laws, is the solution to cutting down the increase in ransomware attacks. 

Others believe that the focus should be on better cybersecurity so that they can stop the wave of ransomware attacks. This is the best long-term solution in a world that is rapidly expanding its digital footprint.