Cyber-crooks turn to Bitcoin extortion

Security journalist Brian Krebs documents a string of escalating extortion crimes perpetrated with help from the net, and proposes that the growth of extortion as a tactic preferred over traditional identity theft and botnetting is driven by Bitcoin, which provides a safe way for crooks to get payouts from their victims.

People who follow online crime will already be familiar with denial-of-service extortion (pay us or we'll take your server down and keep it down), and Cryptolocker blackmail (we've encrypted your harddrive with malware -- pay up or lose your files forever). But what's new are the "Notices of Extortion" sent to pizza joints demanding payoffs ("tribute") to avert denial-of-service attacks, fake orders, spurious health-code violation reports, vandalism, bad online reviews, and trumped-up mercury poisoning reports.

“What the heck is a BitCoin?” wrote the proprietors of New Hampshire-based 900 Degrees Neapolitan Pizzeria, which posted a copy of the letter (above) on their Facebook page.

Sandra Alhilo, general manager of Pizza Pirates in Pomona, Calif., received the extortion demand on June 16.

“At first, I was laughing because I thought it had to be a joke,” Alhilo said in a phone interview. “It was funny until I went and posted it on our Facebook page, and then people put it on Reddit and the Internet got me all paranoid.”

Nicholas Weaver, a researcher at the International Computer Science Institute (ICSI) and at the University California, Berkeley, said these extortion attempts cost virtually nothing and promise a handsome payoff for the perpetrators.

“From the fraudster’s perspective, the cost of these attacks is a stamp and an envelope,” Weaver said. “This type of attack could be fairly effective. Some businesses — particularly restaurant establishments — are very concerned about negative publicity and reviews. Bad Yelp reviews, tip-offs to the health inspector..that stuff works and isn’t hard to do.”

2014: The Year Extortion Went Mainstream [Brian Krebs/Krebs on Security]