/ 6 October 2016

What to do if your data is held hostage

Heads and tales: Bitcoin’s origins remain something of a mystery.
The first 50 bitcoins were born on January 3 2009. (Reuters)

When ransomware takes hold of your files, the preferred form of payment is generally bitcoins. But for the average computer user, obtaining these is not easy.

Francois Harris of Bitcoin South Africa said he has heard of cases where people treated the situation as though their hard drive had crashed, and reformatted their computer.

But he also knows of people who have paid to get their files back, which they have done successfully.

“The quickest and easiest way to recover your files if you have been infected by ransomware is to do a bitcoin payment to the baddies,” Bitcoin South Africa states in a blog post on its website.

The fastest way to do this is to use the currency exchange website localbitcoins.com. Bitcoins are a form of digital currency.

“If you use one of the other local exchanges in South Africa, you will most likely need to wait a couple of days for your verification and Fica [Financial Intelligence Centre Act] documents to be processed,” he says.

But on the localbitcoins.com website you can buy bitcoins to pay the same day. Other exchanges do not make it so easy.

Bitcoin South Africa explains that BitX, one of the exchanges in South Africa, states on its terms of usage page that you may not use BitX products or services to “engage in extortion or blackmail”, which is essentially what you will be doing as a victim when you pay the ransom to get your data released.

Frans Lategan, security analyst at Sensepost, said bitcoin is not anonymous but pseudonymous and the traceability of transactions depends on one’s own operational security.

There is a distributive ledger, in which all transactions are public. “So if you have a ransom note to pay into an address you can go to blockchain.info and see how many transactions go there,” said Lategan. “If ransomware authors create a new address for each demand they can keep the money fairly anonymously.”

Hackers can also “wash” coins through coin mixing services, or launder them through online bitcoin casinos.

“Because authorities don’t recognise bitcoin as legal tender, they often can’t use money-laundering tools against those sites,” Lategan said.

“But if at some stage [people] want to spend that money and they want to convert it to dollars, they might deposit it at an exchange.”

In this case the authorities can subpoena the exchange to get details on where the money was deposited.