What do you get when you add Bitcoin, with a TOR network proxy and cybercriminals? Even more cybercrime!
Bitcoin is the preferred cryptocurrency for ransomware payments. Like most cryptocurrencies it is largely anonymous, allowing the ransoming cybercriminals to collect their money while staying safely in the shadows. Even though Bitcoin is the most popular cryptocurrency, the majority of victims do not have a ready cache of Bitcoin to pay ransom with so the cybercriminals came up with a process to facilitate these ransom payments.
Payment websites are hosted on the Tor network where victims login, purchase Bitcoin and deposit them into the wallet of the bad actors. Sounds convenient, unless there is another bad actor in the middle. To understand how that happens, we first need to explain the Tor network.
Tor is an acronym based on a software project called The Onion Router. It “[redirects] Internet traffic through a free, worldwide, volunteer overlay network consisting of more than seven thousand relays to conceal a user’s location and usage…“, Tor (anonymity network), Wikipedia. In other words, you must use a Tor client to connect to the Tor network and in doing so, you participate as a relay in the network helping to provide anonymity for all other users.
There are many situations where this type of Internet anonymity would be useful: researching a company without alerting them to who is looking, researching a controversial topic without being identified, avoiding oppressive government restrictions or spying, and facilitating Bitcoin payments while hiding the location of the web server. The challenge for the ransomers is that victims are even less likely to be set up with a Tor client than they are to have Bitcoin! To solve this problem, there are individuals who run “Tor proxies.” These proxies are accessible with a regular browser on the Internet so no special software is required. For example, the hidden server on the Tor network might be addressed by hxxps://sketchwebsite.onion which requires a Tor browser to connect. However by entering hxxps://sketchwebsite.onion.to into a regular browser, a connection is made with a “regular server” on the Internet which redirects (proxies) the request to sketchwebsite.onion on your behalf. You can surf the Tor network, and make your Bitcoin payments with no special software required. By design, a proxy takes a connection from one party and passes it to another. This involves looking at the incoming request to understand where it needs to be forwarded. This also creates an opportunity for the proxy to make changes in between.
Proofpoint is the security vendor that identified cybercriminals taking advantage of Tor proxies to steal from victims and the ransoming cybercriminals. They discovered that when victims attempted to connect to the ransomers’ website through a Tor proxy, the criminals operating the proxy made changes to the stream. Instead of the Bitcoin being deposited to the intended ransomer’s digital wallets, the funds were redirected to the proxy operator’s wallet. While you won’t be sympathetic to the ransoming cybercriminals’ loss of revenue, the real problem is that without payment they won’t release the decryption key to the victim. The ransomware victim thought they were paying Bitcoin to the ransomer for the decryption key, but with the man-in-the-middle attack at the Tor proxy they paid for nothing.
Through some very detailed analysis documented here, Proofpoint estimates that approximately 2 BTC have been redirected (around $20,000 at the time they published their article.) It was a notice on the LockeR ransomware payment portal that alerted Proofpoint researchers that something was amiss in the cybercrime underworld:
“While this is not necessarily a bad thing, it does raise an interesting business problem for ransomware threat actors and practical issues for ransomware victims by further increasing the risk to victims who would resort to paying ransomware ransoms,” Proofpoint researchers said. “This kind of scheme also reflects the broader trend of threat actors of all stripes targeting cryptocurrency theft. Continued volatility in cryptocurrency markets and increasing interest in the Tor network will likely drive further potential abuses of Tor proxies, creating additional risks for new users.”