Baltimore government finally gives up and pays $6M USD for ransomware attack
The serious ransomware attack that Baltimore recently suffered has pushed the city government to make extraordinary decisions. According to ethical hacking specialists, after a long meeting government officials decided to transfer about $6 million USD from the public works fund to assist in the May ransomware attack incident recovery process.
These resources will help the city’s IT staff
cover the incident recovery costs, as well as start implementing measures to
improve their IT security ecosystem; “It’s a necessary investment,”
said the chairman of the Estimates Board, Bernard C. Young.
In addition, Young noted that it was agreed to
take these $6 million USD from the recreation, parks and public spaces funds of
the city. “It was necessary for our ethical hacking teams to take back
control of our critical IT infrastructure,” he added. The city government
has also considered hiring an insurance policy against cybersecurity incidents.
In this regard, the Baltimore government has
already received a contract proposal that, in exchange for about $850k USD
would provide insurance of up to $20 million USD in cybersecurity incident
coverage. The coverage would be offered by AXA and Chubb Insurance jointly,
with $10 million in coverage each.
The officials responsible for the city budget, in collaboration with ethical hacking specialists, say the total cost of recovery from this incident is at least $18.2 million USD. Of the total cost about $10 million would be expended in recovery costs, while the remaining money will be used to cover losses caused by ransomware infection, resulting from fine payment, utilities and various taxes. On the other hand, the attackers demanded a ransom of 13 Bitcoin, equivalent to about $150k USD according to the cryptocurrency current exchange rate.
However, city government spokesman Lester Davis
mentions that, to the extent that some of the city’s systems are restored,
revenue will start flowing again, so in the end the recovery cost might be
lower than expected. In addition, when questioned about the hiring of the
insurance policy against cybersecurity
incidents, the spokesman mentioned: “This is one of the main objectives of
the city government, so hopefully it can be realized as soon as possible.”
According to ethical hacking specialists from
the International Institute of Cyber Security (IICS) the incident occurred last
May, when a group of threat actors unlawfully accessed the city’s systems, infecting
them with a variant of unidentified ransomware and demanding a ransom of
hundreds of thousands of dollars. Although hackers managed to compromise most
of the Baltimore government’s servers, authorities decided not to pay the ransom
and notify federal agencies.
Reports of ransomware attacks against U.S.
government agencies have increased significantly for at least the past two
years. This is mainly due to poor security measures implemented in some local
governments, making them easy prey for hackers.