Report: IoT is the next frontier for ransomware

LAS VEGAS -- The growth of the Internet of Things will offer new ransomware opportunities for cybercriminals, according to a report released Thursday by Symantec.

Researchers were able repackage existing Android ransomware -- Android.Simplocker -- inside a new Android Wear project, and when the phone was infected, so was a paired smartwatch. Once executed, the ransomware made the watch unusable, and also encrypted files stored on the watch's SD card.

Researchers said they haven't seen any examples of this kind of ransomware in the wild yet.

According to a report by Symantec researcher Kevin Savage, cybercriminals switch their focus to a different malware type approximately every two or three years of reaching a peak.

"The patterns... suggest that crypto ransomware growth is already at, or close to, its peak," he said. "This means it may soon plateau before finally entering a declining phase."

This could be because of increasing crackdowns by law enforcement or changes in international law or financial regulations, he said.

In addition, ransomware might not be as difficult to protect against as commonly thought, according to Engin Kirda, co-founder and chief architect of security firm Lastline, and a cyber security professor at Northeastern University.

Kirda presented a paper at Black Hat on Thursday that analyzed 1,359 samples of ransomware and determined that 61 percent only affected user desktops and did not touch stored files at all, 35 percent deleted files -- most without actually wiping the data from the disk -- and around 5 percent used encryption.

But the most effective of the crypto-based ransomware, such as Cryptowall and Cryptolocker, use the strong encryption that is built into Windows. This means that defenders can monitor for particular behaviors, like access to the encryption libraries.

Plus, all ransomware has one additional weakness, said Kirda -- ransomware has to show the ransom note to the user, while quickly looking for files in the background for encryption or deletion.

"The behavior that the ransomware shows is quite predictable," he said. "It aims to infect people and extort money as soon as possible."

While current antivirus software does a bad job at catching it, behavior-based techniques should be more effective, he said.

"We should be able to do a better job of mitigation," he said.

"This does not mean that it will go away," said Symantec's Savage. "Instead it is likely that crypto ransomware may enter a decay phase within two years but the decay phase will be drawn out and never reach zero."

One possible new avenue of exploration for criminal gangs is the Internet of Things, which includes, in addition to smartwatches, smart TVs, smart clothing, smart fridges, smart locks and Internet-enabled cars.

[ ALSO ON CSO: The Internet of Things to take a beating in DefCon hacking contest ]

"All of these devices are effectively connected computers which could potentially be hijacked by cybercriminals and held to ransom," Savage wrote in his report. "Imagine a scenario your smart house lock refuses to allow entry to your own house or where your car is taken over by ransomware and refuses to start, allow entry, speed up, or slow down until a ransom is paid."

Some devices, such as network-attached storage devices, have already been hit by criminals, while researchers have shown the ability to gain remote access to a moving Jeep Cherokee and take over lights, steering, transmission, and brakes.

"It's not happening yet, but it's something we might see in the future because it's not something that's too difficult to do," said Lastline's Kirda.

In addition to going after consumers, attackers might also target industrial control systems, hospitals, and other targeted organizations, he said -- but this might pose some logistical problems for attackers. If they warn organizations that an attack is coming, the organization might take steps to protect itself.

"But if they shut stuff down, the damage is already done, so why pay up?" he said.

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