Cryptocurrencies

NetWalker Ransomware Gang Is Storing $7M in Bitcoin in SegWit Cold Storage

(Ilya Pavlov/Unsplash)

NetWalker ransomware, which last week triggered cybersecurity flash warnings from the Federal Bureau of Investigation (FBI), has extorted $25 million in bitcoin from its victims during the months of the pandemic, according to a report by McAfee and CipherTrace.

  • NetWalker is a “ransomware-as-a-service” that gains its access through COVID-19 phishing emails, encrypts infected systems and steals internal documents. Ransomware operators then threaten to publish victims’ documents if they fail to pay up.
  • Victims, most of whom are large organizations such as companies and governments, appear to been obliging the hackers throughout the pandemic. McAfee and CipherTrace traced 2,795 bitcoin ($25 million) to NetWalker wallet addresses from March 1 through July 27.
  • NetWalker’s developers refined their handling of bitcoin payments months before the pandemic began by swapping in SegWit addresses in place of legacy wallets, the report said. 
  • “This transition into SegWit could indicate that they are utilizing a new hardware wallet to store their BTC or just an indication of a desire for cheaper transactions,” said Pamela Clegg, director of financial investigations at CipherTrace.
  • Clegg told CoinDesk that “large amounts of bitcoin” – up to 640 – appear to be sitting in cold storage. She said smaller amounts have been deposited at Russian crypto exchange CointoCard.org.
  • The cybersecurity report follows last week’s warning from the FBI that NetWalker has been successfully exploiting COVID-19 in recent months. The FBI warns targeted institutions against paying hackers’ bitcoin ransom payments.

See also: Travel Management Firm CWT Pays Out $4.5M in Bitcoin After Ransomware Attack

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