Double extortion is a cyberattack strategy used by ransomware groups during which attackers encrypt the victim’s data and then also threaten to release sensitive data publicly unless a ransom is paid.

Double extortion attacks are part of a broader trend in the evolution of cybercrime, where attackers seek to increase pressure on victims, leveraging the fear of reputational damage, legal consequences, and financial loss, in addition to the disruption caused by losing access to critical data. This heightened threat has made double extortion a particularly potent and harmful tactic for cybercriminals and a significant challenge for cybersecurity professionals.

How Double Extortion Works

The typical progression of a double extortion attack follows these steps:

  1. Initial Compromise:
    The attacker gains access to the victim’s network, often through phishing emails, exploiting vulnerabilities in the system, or using stolen credentials. Once inside the network, the attackers may spend some time conducting reconnaissance to identify valuable data and systems.
  2. Data Exfiltration:
    Before deploying ransomware to encrypt files, the attackers will exfiltrate (or steal) sensitive data from the victim’s systems. This data may include customer records, financial information, intellectual property, or proprietary business secrets. The attackers typically ensure that the stolen data is securely stored on their own servers, where they can later threaten to release it.
  3. Ransomware Deployment:
    After exfiltrating the data, the attackers deploy ransomware to encrypt the victim’s files. This renders the data inaccessible to the organization and may disrupt operations significantly. The ransomware usually displays a ransom note demanding payment, often in cryptocurrency, in exchange for a decryption key that will unlock the encrypted files.
  4. Double Extortion Threat:
    At this stage, the attackers inform the victim that, in addition to the encryption, they are holding sensitive data hostage. The attackers threaten to release or sell the stolen data on the dark web or to competitors unless the ransom is paid. The attackers may give the victim a set deadline to pay both the decryption ransom and an additional amount for not leaking the stolen information.
  5. Pressure to Pay:
    The victim is now faced with a dual threat: the potential loss of access to critical systems due to encryption, and the exposure of sensitive or confidential data, which could result in financial losses, reputational damage, and legal liabilities (especially if the data includes personally identifiable information or violates regulations like GDPR or HIPAA). The attackers may use public pressure tactics, such as publishing a small sample of the stolen data, to escalate the threat and force the victim to comply with their demands.
  6. Outcome:
    The victim is left with a difficult decision: pay the ransom to recover access to their files and prevent the exposure of sensitive data, or refuse to pay and face the consequences. However, even if the ransom is paid, there is no guarantee that the attackers will return the decryption key or refrain from releasing the data. Some attackers have been known to publish the data regardless of payment, or to demand additional ransoms after the initial payment.

Motivations Behind Double Extortion

The motivations for cybercriminals to employ double extortion tactics are clear: they aim to increase the pressure on victims, making it more likely that the ransom will be paid. Key motivations for attackers include:

  1. Higher Profits:
    Double extortion offers a way for attackers to double their ransom payout, first by demanding money for decryption and then again to prevent data leaks. This increases the financial impact on the victim and raises the profitability of the attack.
  2. Reputational and Legal Damage:
    The threat of releasing sensitive or proprietary data can create immense pressure on the victim. The risk of reputational harm, customer distrust, regulatory fines, and potential lawsuits can push organizations to pay the ransom quickly to prevent these consequences.
  3. Psychological Pressure:
    By stealing and threatening to release highly sensitive data, the attackers create a psychological crisis for the victim. This tactic plays on the fear of public exposure, financial losses, and damage to business relationships, motivating victims to comply with demands.
  4. Increasing Leverage:
    For attackers, having both the encrypted files and stolen data gives them two forms of leverage over the victim, making it harder for the victim to simply refuse payment or to recover without meeting the demands.

Impact of Double Extortion

The effects of a double extortion attack on organizations can be severe:

  1. Financial Losses:
    Paying the ransom can lead to direct financial loss, as organizations are often forced to pay substantial sums to the attackers. Additionally, there may be hidden costs in dealing with the aftermath, including investigation, recovery, and public relations expenses.
  2. Reputational Damage:
    If stolen data is released publicly or leaked to competitors, the organization risks long-term reputational damage. Customers and clients may lose trust in the company’s ability to secure their personal or business data, leading to loss of business and market share.
  3. Regulatory Consequences:
    Data breaches involving sensitive customer information can result in significant regulatory fines, especially for industries subject to strict data protection laws like finance, healthcare, and e-commerce. Laws like the General Data Protection Regulation (GDPR) in Europe and California Consumer Privacy Act (CCPA) in the U.S. impose heavy penalties for non-compliance in the event of a data breach.
  4. Operational Disruption:
    The encryption of critical systems can halt business operations, especially if the ransomware has spread to vital systems such as those used for financial transactions, customer databases, or intellectual property management. This disruption can last for days, weeks, or even longer, depending on the effectiveness of the victim’s recovery efforts.

Defending Against Double Extortion

Given the high stakes involved in double extortion attacks, it is critical for organizations to take proactive steps to prevent and mitigate these threats:

  1. Regular Backups:
    Having a robust backup strategy that includes frequent, offsite backups can help ensure that critical data is recoverable without having to rely on paying a ransom. These backups should be air-gapped or otherwise isolated from the network to prevent them from being encrypted during an attack.
  2. Layered Cybersecurity Stack:
    It is important to ensure that the cybersecurity defenses in place to combat these attacks are effective and efficient. Using tools focused on anti data exfiltration (ADX) can thwart these double extortion attacks as when no data is exfiltrated cybercriminals do not have any stolen information that can be used to extort victims.
  3. Employee Training:
    Since phishing attacks are a common method for initiating ransomware attacks, employee training is essential. Ensuring that employees can recognize suspicious emails and potential social engineering tactics can help reduce the risk of infection.
  4. Incident Response Plan:
    Organizations should have an incident response plan that includes clear steps for handling ransomware attacks. This plan should address both the technical aspects of mitigating the attack and the legal and communication strategies for dealing with potential data leaks.
  5. Cyber Insurance:
    Organizations may consider investing in cyber insurance that covers the costs associated with ransomware and data breaches, including ransom payments, legal fees, and public relations efforts.

Conclusion

Double extortion is a sophisticated and increasingly common form of cybercrime that combines traditional ransomware tactics with the added threat of data exposure. By stealing sensitive data before encrypting it and threatening to release it unless a ransom is paid, attackers increase the pressure on their victims, making it more likely that they will comply with the demands.

As this type of attack continues to evolve, organizations must implement comprehensive cybersecurity measures, including strong data protection, backup systems, and employee awareness programs, to minimize the risk and impact of double extortion attacks.

About BlackFog

BlackFog is the leader in on-device data privacy, data security and ransomware prevention. Our behavioral analysis and anti data exfiltration (ADX) technology stops hackers before they even get started. Our cyberthreat prevention software prevents ransomware, spyware, malware, phishing, unauthorized data collection and profiling and mitigates the risks associated with data breaches and insider threats. BlackFog blocks threats across mobile and desktop endpoints, protecting organizations data and privacy, and strengthening regulatory compliance.