Colonial Pipeline Paid Hackers Nearly $5 Million in Ransom William Turton, Michael Riley and Jennifer Jacobs
Thu, May 13, 2021, 10:47 AM·3 min read
(Bloomberg) -- Colonial Pipeline Co. paid nearly $5 million to Eastern European hackers on Friday, contradicting reports earlier this week that the company had no intention of paying an extortion fee to help restore the country’s largest fuel pipeline, according to two people familiar with the transaction.The company paid the hefty ransom in untraceable cryptocurrency within hours after the attack, underscoring the immense pressure faced by the Georgia-based operator to get gasoline and jet fuel flowing again to major cities along the Eastern Seaboard, those people said. A third person familiar with the situation said U.S. government officials are aware that Colonial made the payment.
Once they received the payment, the hackers provided the operator with a decrypting tool to restore its disabled computer network. The tool was so slow that the company continued using its own backups to help restore the system, one of the people familiar with the company’s efforts said.
A representative from Colonial declined to comment, as did a spokesperson for the National Security Council.
The hackers, which the FBI said are linked to a group called DarkSide, specialize in digital extortion and are believed to be located in Russia or Eastern Europe.
On Wednesday, media outlets including the Washington Post and Reuters reported that the company had no immediate intention of paying the ransom. Those reports were based on anonymous sources.
Ransomware is a type of malware that locks up a victim’s files, which the attackers promise to unlock for a payment. More recently, some ransomware groups have also stolen victims’ data and threatened to release it unless paid -- a kind of double extortion.
Deputy National Security Advisor Anne Neuberger on Monday acknowledged that sometimes companies may have no choice but to pay ransoms, telling reporters: “We recognize, though, that companies are often in a difficult position if their data is encrypted and they do not have backups and cannot recover the data.”
The FBI discourages organizations from paying ransom to hackers, saying there is no guarantee they will follow through on promises to unlock files. It also provides incentive to other would-be hackers, the agency says. Such guidance provides a quandary for victims who have to weigh the risks of not paying with the costs of lost or exposed records.
A report released last month by a ransomware task force said the amount paid by ransomware victims increased by 311% in 2020, reaching about $350 million in cryptocurrency. The average ransom paid by organizations in 2020 was $312,493, according to report.
Colonial, which operates the largest fuel pipeline in the U.S., became aware of the hack around May 7 and shut down its operations, which led to fuel shortages and lines at gas stations along the East Coast.
(Updates with U.S. government awareness in second paragraph.)
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11. "RE: If you think gas is a crisis, wait until all the other... " In response to Reply # 4
>Holes in our infrastructure are under constant attack. Biden >better be accelerating that infrastructure budget asap,cause >motherfuckers about to be doing everything they can to get >that quick $5M.
To my knowledge, Colonial Pipeline is a privately held company, not one run by the government. If that's the case, how much responsibility should the government hold for ensuring their cybersecurity is up to par?
I can't believe I'm going to sound like a right-leaning Republican on this issue, but there should be monetary limits to much more the government is re$pon$ible for footing the bills on this matter.
For publicly held and managed lands/utilities, that's a whole other separate matter IMO.
It should be interesting to see of Congress' perceptions changes as result of this pipeline attack regardless though.
"Sean sparks like John Starks, nah, Sean ball like John Wall" - Rest In Power Forever Sean Price.
FORT LAUDERDALE — Hackers who sought $40 million in ransom from a South Florida school district that refused to pay have now published nearly 26,000 stolen files.
Many of the files, dated from 2012 to March 2021, contain Broward School District accounting and other financial records, which include invoices, purchase orders, and travel and reimbursement forms, the South Florida SunSentinel reported. None of the files reviewed by the newspaper so far contained Social Security numbers.
The international malware group Conti posted the files Monday, the newspaper reported. Last month the hackers posted a transcript of a conversation with an unidentified Broward schools representative which offered to pay $500,000 to retrieve data. The hackers initially demanded $40 million but dropped the price to $10 million.
On March 31, the district announced it had no intention of paying a ransom.
Kathy Kochhe, the district’s chief communications officer, said in a statement that officials are analyzing the content of the posted material do determine next steps, and will notify anyone whose personal information was shared.
“Cybersecurity experts are continuing to investigate the incident and enhance measures system-wide,” the statement said.
The district, which is the nation’s sixth largest with 271,000 students, has published questions and answers about the breach on its website at browardschools.com. The school district has an annual budget of about $4 billion — a fact the hackers kept returning to as they demanded $40 million, to be paid in cryptocurrency.
The published files includes more 750 employee mileage reports, 36 employee travel reimbursement forms, more than 700 invoices for spring water, more than 1,000 invoices for school construction work, about 400 payments to Broward Sheriff’s Office or local police departments for security, dozens of utility bills and several employee phone lists, the newspaper reported.
While the vast majority of the data appeared to be public records, some confidential material was shared, the report said. A March 2020 invoice for $14 from the state health department that includes the name and birthdate of a 9-year-old student who was being examined for a disability. Some invoices name bus drivers who visited urgent care centers. And several documents list employee benefits.
“It doesn’t sound like it was that big,” Jorge Orchilles chief technology officer for the cybersecurity company Scythe, told the SunSentinel. “It looks like they made the right decision not to pay ransom. At this point, there’s no point in paying it because all the information is already out there.”
The hackers said on their website they may have more information.
“If you are a client who declined the deal and did not find your data on cartel’s website or did not find valuable files, this does not mean that we forgot about you,” the website says. “It only means that data was sold and only therefore it did not publish in free access!”
Last week, the school district’s chief information officer warned the Broward School Board that a new cyber-attack could affect the ability to pay employees and keep schools open. Phil Dunn requested $20 million to enhance the district’s cyber-security efforts, and the board plans to make a final decision soon.
In 2021, there have already been at least 21 successful ransomware attacks in the U.S. education sector, disrupting 550 schools, Brett Callow, a threat analyst for the anti-malware company Emsisoft, told the newspaper.
9. "Ransomware is real. It wasn’t taken seriously years ago, so a lot of " In response to Reply # 0
governments and nations are way behind in technology. So now they have to play catch-up
Imagine you’re a major political figure, and you’re in a smart car, which gets hacked. And then you’re held for ransom by a hacker who is located somewhere on another Continent.
Kidnapping, hijacking,etc are about to go to another level.
Almost everything about our existence, except our flesh, is computer/system related.
I’ve always been a futurist and optimist in regards to life, because the evolution of tech and science offer so many possibilities of what man can do....but not at the expense of privacy and liberation.
HIS NAME IS MASON MOUNT Bulls | Bears | White Sox | Yankees | Notre Dame | Illinois | Chelsea | Real Madrid
15. "Cyberinsurance companies have been hinting about needing ransomware prot..." In response to Reply # 0 Sat May-15-21 04:39 AM by nonaime
for a couple years now. We get a questionnaire we have to fill out every year, it's been focused on ransomware recently...the insurers will be getting to a point / are getting to a point where they aren't asking if you have certain controls in place, but are telling you to have those controls in place.
~~~~~~~~ A bad Samaritan averaging above average men (c) DOOM
Washington (CNN)US investigators have recovered millions of dollars in cryptocurrency paid in ransom to hackers whose attack prompted the shutdown of the key East Coast pipeline last month, according to people briefed on the matter.
The Justice Department on Monday is expected to announce details of the operation led by the FBI with the cooperation of the Colonial Pipeline operator, the people briefed on the matter said. The ransom recovery is a rare outcome for a company that has fallen victim to a debilitating cyberattack in the booming criminal business of ransomware. Colonial Pipeline Co. CEO Joseph Blount told The Wall Street Journal In an interview published last month that the company complied with the $4.4 million ransom demand because officials didn't know the extent of the intrusion by hackers and how long it would take to restore operations.
But behind the scenes, the company had taken early steps to notify the FBI and followed instructions that helped investigators track the payment to a cryptocurrency wallet used by the hackers, believed to be based in Russia. US officials have linked the Colonial attack to a criminal hacking group known as Darkside that is said to share its malware tools with other criminal hackers. A spokesman for the Justice Department declined to comment, and CNN has reached out to the Colonial Pipeline operator.