Ransomware Hackers Get Paid By Another US City

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Another US city opts to hand over hundreds of thousands dollars to hackers after ransomware attack

US officials in Florida continue to set a bad example for the rest of the world after they opted to pay hackers after a ransomware attack.

The attack two weeks ago crippled the IT systems of a Florida city called Lake City that has a population of over 12,000 people.

The decision to pay the hackers comes after the council of another city in Florida (Riviera Beach City) voted unanimously to pay hackers $600,000 who took over their computer systems via a ransomware attack four weeks ago.

Ransomware payout

But Lake City decision to pay the hackers $500,000 (£394,000) was aided by the fact that insurance would cover most of the ransom.

The BBC, citing media reports, wrote that IT staff in Lake City disconnected staff computers within minutes of the attack starting, but it was too late.

The ransomware attack meant that workers were locked out of email accounts and members of the public were left unable to make municipal payments online.

The BBC reported that the town’s insurer was contacted by the hackers and negotiated ransom payment of 42 bitcoins, or roughly $500,000. Officials felt that paying the ransom was the most efficient way of regaining computer access.

“I would have never dreamed this could have happened, especially in a small town like this,” mayor Stephen Witt reportedly told local media.

The mayor confirmed that insurance would cover the vast majority of the ransom payment, but $10,000 would be incurred by Lake City taxpayers.

This means that the two cities in Florida have now paid $1.1m in total to hackers, setting a terrible example to the rest of the world.

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.

Ongoing attacks

Ransomware attacks are ongoing, so firms are being urged to backup regularly and educate staff about phishing emails (the most common entry point).

The scale of the ransomware threat was evidenced this month by an attack on one of the world’s largest suppliers of aeroplane parts, which caused it to cease production in factories across four countries.

ASCO Industries based in Belgium, also had to send home the vast majority of its workforce after the ransomware attack on 7 June.

Another ransomware attack in March crippled the operations of large Norwegian manufacturing firm Norsk Hydro. The company estimated that it lost more than $40m in the week following that attack, but it didn’t pay the hackers.

The advice from security professionals is clear, and they always urge entities not to pay the hackers, but instead invest money in improving cyber defences and education, as well as ensuring that regular backups are carried out.

But whatever the experts may say, in April a study from Appriver revealed a worrying admission about the actions of companies after they are struck with a ransomware attack.

It found that more than half of executives (55 percent) at small-to-medium-sized businesses (SMBs) in the US said they would pay hackers to recover their stolen data in ransomware attacks.

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Author: Tom Jowitt
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