Cyber extortion hits all-time high

Cyber extortion attacks have become increasingly prevalent in recent years, posing a significant threat to organizations of all sizes and industries, according to Orange Cyberdefense.

Examining data from a total of 6,707 confirmed business victims, the findings show a fluctuation in the number of victims across different countries and industries, with attacks expanding to new regions. While the data shows a decrease of cyber extortion victims (8%) in 2022, this reduction is short lived as the latest data shows the largest volumes to date in Q1 2023.

As cyber extortion attacks continue to rise, the report suggests that 2022 was the year of ‘distraction’ and rebranding for some of the major cyber extortion operations Orange Cyberdefense is monitoring.

Cyber extortion activity broadens to impact previously unaffected countries

The geographical shift of cyber extortion attacks has continued, with a significant year on year increase (42%) in Southeast Asia, with Indonesia, Singapore, Thailand, Philippines, and Malaysia the most impacted. Simultaneously we have seen a decrease in victims in regions such as North America and Europe.

Previously we observed that countries are mostly targeted opportunistically, and the number of victims depends primarily on the number of organizations registered in a country. However, this general trend is changing as bigger western countries respond actively to the threat, and threat actors are forced to seek out new hunting grounds. As such, threat actors are focusing on regions where the level of risk seems lower for them, which could partly be due to a lack of proactivity from local governments.

The war in Ukraine has disrupted the cyber extortion ecosystem

The data from the report shows that the war has had a noticeable impact on cyber extortion, slowing down activities and causing threat actors to regroup before continuing their attacks.

Geopolitical tensions resulting from the Ukraine war has seen many countries firmly shifting their allegiance to one side or the other in the conflict, creating expectations that cyber extortion patterns would follow suite. Indeed, our findings show that in 2022, 74% of all victims were from NATO countries.

However, cyber extortion impacting NATO countries decreased noticeably at the start of the war and continued to decrease as the war progressed. Activity during this time from pro-Russian threat actors did not result in a proportional increase in cyber extortion victims among NATO member countries.

We observed a dramatic shift in Q1 2023 and especially March 2023, which shows a different trend, illustrated by the spike in threat actor activity. Whether this is going to continue is difficult to foresee.

Whilst we expected to see more organizations from NATO-member countries being impacted, we observed exactly the opposite. Non-NATO countries from regions such as Latin America (+32%), and Southeast Asia saw an uptick in victim numbers instead. How this is influenced by the political situation of the Ukraine war is not entirely clear, but it can be said with some confidence that the war has not spawned an increase in cyber extortion incidents for NATO member countries so far as fewer are being impacted over time.

Threat actors changing tactics

In 2022 manufacturing was the biggest industry impacted, with roughly one fifth of all victims within this industry. However, in 2022 we observed a decrease of 39% for the manufacturing sector, with the second half of 2022 showing a noticeably lower number of victims. One reason for this sharp decline is most likely the closure of the Conti group’s criminal activities.

The educational sector has suffered much more in 2022 when compared to the year before, with an increase of 41%. And particularly at the hands of the Vice Society group. We saw an average of 10 organizations per month from this sector being publicly exposed on the dark web, with the top five countries impacted being the US, UK, Spain, France and Australia.

We also observe that the utilities sector saw an increase of 51%, but the actual numbers of observed victims in 2022 remained low (35 victims).

The report also highlights how the financial sector has seen an increase of cyber extortion attacks, (+11%) with over 130 Financial Institutions becoming victims of cyber extortion. 75% of all victims have under 1,000 employees.

With regards to business size, in 2022, we saw large organizations impacted the most, representing 36% of all victims, but small and medium organizations were not far behind. We recorded that 30% of all victims were small organizations, while medium-sized businesses made up 24%.

Attempts to disrupt cyber extortion

As a result of consistently high-impact attacks, governments worldwide are starting to take more action. Some forbid companies operating within their country to pay a ransom when demanded. In the USA, Australia and elsewhere, authorities have made several official statements condemning foreign threat actors. While still on the backfoot, law enforcement is catching up, increasingly disrupting threat actors’ activities.

We also see positive developments in that law enforcement agencies and governments are taking action to disrupt this ecosystem through criminals’ arrests, infrastructure takedowns, money seizures, international sanctions, development of decryptors for victims and ‘hack back’ activities.

“Whilst 2022 witnessed a slowdown in the growth of attacks, we can see from Q1 that it’s not the time to become complacent. Our research shows that industry and government collaboration is the key to driving down malicious cyber activity, as cyber extortion is not a problem that businesses can solve on their own. We are yet to see the true impact of geopolitical events such as the Ukraine war in cyberspace, but increased initiatives being put in place at a government level are essential if we are to tackle the ever-present risks posed by threat actors”, says Hugues Foulon, CEO at Orange Cyberdefense.

“Despite the increase in victim numbers in the first quarter of 2023, there is hope that the continuous efforts to combat the cyber extortion threat can yield more positive outcomes and victories this year. But to achieve this, we must pull together as an industry and keep sharing information about threats and attacks,” said Charl van der Walt, Head of Security Research at Orange Cyberdefense.

“We are seeing significant changes and trends in terms of victim distribution across countries and industries and we believe collaboration between the public and private sectors can be improved to demonstrate a united front in combating this type of crime,” van der Walt concluded.