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The history of ransomware is being written right now, as you read this text. But, over time, several key events led to the emergence of the sophisticated attacks we see today.

From a rudimentary AIDS Trojan in 1989 to today’s advanced, multi-million-dollar attacks, ransomware evolved from theft to a tool for significant geopolitical and economic disruption.

As we explore its history, I will highlight how ransomware mirrors the broader trends in cybercrime. It’s a relentless battle: attackers continually find new vulnerabilities, while defenders strive to protect our digital systems. I’ll dive into various malware types, famous attacks, and the surprising ransoms asked for.

We’ll also have a quick look at how ransomware organizations work and how profitable they are. This will give us insights into a hidden world that challenges our ideas about security and privacy in the digital age.

Read on to learn more about:

  • AIDS Trojan, the world’s very first ransomware attack (1989)
  • GPCode & Achievus, the encryption-based ransomware of the early 2000s
  • 2010s: Diversification, global expansion, and ransomware’s uses of cryptocurrencies
  • Early 2020s: Ransomware matures
  • How to prevent ransomware attacks with the help of cybersecurity solutions

1989: The beginning

The AIDS Trojan, also called the PC Cyborg Virus, was the first ransomware. It didn’t cause much data loss or financial damage, but it had a big psychological and educational impact. It served as an early wake-up call to the potential dangers of digital security threats, particularly those that could hold sensitive data hostage.

The AIDS Trojan is important because it introduced ransomware to the world. This set the stage for future developments in malware. It showcased how attackers could monetize malware by holding data hostage.

newspaper extract from 1989 about AIDS ransomware

‘Aids’ disk damages hospital computers – The Independent 1989

The AIDS Trojan was a real eye-opener for everyone in cybersecurity. It was one of the most significant computer incidents ever because it kick-started a whole new field of research. It showed us how serious data loss could be and the kind of risks our infrastructure and society could face.

But it also opened a door for cybercriminals to see the potential in this, leading them to build complex operations like ransomware families. This incident changed the game and led to major developments in how we protect against digital threats.

2000s: The internet era

In the late 1980s, the AIDS Trojan used floppy disks and postal services to spread and get paid. But in the early 2000s, things changed for ransomware.

The widespread adoption of the internet in the 2000s transformed ransomware into a more menacing threat. The digital age made ransomware spread faster, reach farther and operate more secretly than ever.

GPCode: The early wave of encryption-based ransomware

GPCode, appearing around 2004, was one of the early ransomware that encrypted user files. It typically spread through malicious website links and phishing emails, a method that exploited the increasing use of email communications.

The malware used a custom encryption algorithm to lock files on Windows systems. This showed a move towards using more advanced ways to keep data hostage. To get money quickly, the attackers requested small amounts, even as low as $20. This strategy played on the likelihood that victims would pay minor sums to regain access to their data quickly.

Cracking the Code: Despite its innovative approach, GPCode’s custom encryption was not particularly strong, allowing cybersecurity experts to crack it and aid victims in recovering their data without paying the ransom.

Archievus: Advancing encryption, but with a flaw

By 2006, ransomware creators had started understanding the importance of effective encryption. Archievus was the first ransomware to use a 1,024-bit RSA encryption, which made decryption harder without a key.

A critical oversight: However, a significant blunder by its creators was the use of a consistent password across different infections. Once this was discovered, it allowed for a collective decryption effort, rendering the ransomware ineffective.

Lessons and legacy

The rise of GPCode and Archievus in the internet era was a wake-up call. It showed that stronger cybersecurity measures are needed.

These early internet-era ransomware variants laid the groundwork for future, more sophisticated attacks. They highlighted the potential for significant financial gain from such attacks, setting a troubling precedent for the future of digital extortion.

2010s: Diversification, global expansion, and the role of cryptocurrencies in ransomware

In the mid-2010s, the threat of ransomware changed a lot. It started affecting more than just Windows PCs and started targeting other devices that connect to the internet. The use of computers and internet-connected devices in businesses increased globally. This led to diversification and a larger target pool for ransomware attackers.

Ransomware such as Simplelocker and Lockerpin started attacking Android devices. Meanwhile, Linux systems faced a new threat called Linux.Encoder.1. This was a big change from before, showing that all operating systems could get ransomware.

The global impact of ransomware – Petya and WannaCry

These years were marked by some of the most devastating ransomware attacks on record. Petya, notable for its technique of only encrypting files from the master file table, and WannaCry, a ransomworm exploiting the EternalBlue vulnerability, demonstrated ransomware’s alarming global reach.

The WannaCry ransomware attack affected 200,000 computers in 150 countries, causing billions of dollars in damages. The widespread impact shows how advanced the ransomware is and how connected the digital world is.

The advent of cryptocurrencies in ransomware operations

The introduction and rise of cryptocurrencies like Bitcoin played an important role in the evolution of ransomware.

Cryptocurrencies offered a level of anonymity and ease of transaction that was previously unavailable to cybercriminals, making it harder for authorities to track and intercept ransom payments.

The anonymity afforded by cryptocurrencies likely contributed to the increase in ransomware attacks, as cybercriminals were emboldened by the reduced risk of getting caught.

Emergence of organized cybercriminal groups and their business model

In the late 2010s, the ransomware landscape was further transformed by the emergence of highly organized cybercriminal groups.

Notable among these were DarkSide, REvil, and Maze. These groups operated with sophistication and efficiency, mirroring legitimate business structures.

They professionalized the ransomware industry, introducing a level of organization and strategic planning that was previously unseen.

Ransomware as a service (RaaS) business model

These organizations revolutionized the cybercrime world by introducing Ransomware as a Service (RaaS). Through RaaS, individuals, even those with limited technical expertise, could access and deploy advanced ransomware tools.

This democratization of cybercrime tools significantly expanded the pool of attackers. The RaaS model provided a full suite of services. It included the provision of ransomware tools, facilitation of the encryption process, negotiation for ransom with the victim, collection of payments (usually in cryptocurrencies), and even the decryption process once the ransom was paid.

In this model, the profits from ransom payments were shared between the RaaS providers and their clients (the attackers).

This incentivized more individuals to participate in ransomware attacks, knowing that the complex parts of the operation—like negotiation and decryption—were handled by experienced groups.

While exact figures can be elusive due to the clandestine nature of these activities, it is estimated that ransomware groups like REvil and DarkSide have made millions of dollars. REvil reportedly earned more than $100 million in one year from ransomware, showing how profitable these criminal activities can be.

The rise of these organized cybercriminal groups and their new RaaS business model was a big change in the ransomware world. The shift from isolated attacks to organized crime caused widespread damage and new challenges for cybersecurity.

Early 2020s: Ransomware matures

In the early 2020s, ransomware not only matured technologically but also tactically. One of the most significant developments was the introduction of double extortion tactics, as seen with groups like Maze RaaS. This approach involved both encrypting the victim’s data and exfiltrating it.

The attackers threatened to release sensitive information if the full ransom demand wasn’t paid. This added more pressure on the victims. This tactic was particularly effective against major corporations and government entities, where data breaches could have severe legal and reputational consequences.

Further elevating the stakes, triple extortion tactics began to surface. In these scenarios, attackers added elements like DDoS attacks, public shaming, or even targeting an organization’s clients or customers, thereby amplifying the pressure to pay the demanded ransom.

COVID-19 Pandemic: A catalyst for ransomware spread

The global COVID-19 pandemic proved to be an unexpected accelerant for ransomware activities. Due to remote work and digital services, ransomware and RaaS platforms spread more easily.

A notable example was the attack by the REvil gang on Kaseya, a software provider, which had a cascading effect on numerous businesses using its software. REvil demanded a staggering $70 million in ransom, underlining the scale and audacity of modern ransomware operations.

The Ukraine-Russia conflict ransomware attacks

During heightened tensions and conflict, Ukraine faced a series of sophisticated cyber attacks. These attacks, believed to be state-sponsored, were aimed at destabilizing and disrupting Ukrainian infrastructure and government functions.

Unlike typical ransomware designed for financial extortion, ransomware operators behind these attacks seemed intent on causing chaos and confusion, adding a digital front to the physical conflict. The attacks targeted essential services and government agencies, attempting to cripple critical infrastructure and sow discord.

These incidents underscored the growing trend of cyber warfare where ransomware becomes a tool for state actors to pursue their geopolitical objectives. The attacks on Ukraine showed that ransomware can be used as a weapon in conflicts between countries. This raises concerns about how cyber threats affect global security.

The new era of cyber threats

The early 2020s mark a turning point in the history of ransomware. From a tool for cybercriminal financial gain, ransomware has evolved into a weapon of geopolitical significance.

Ransomware used in the Ukraine-Russia conflict shows how cyber adversaries changed their motives and tactics. We are entering a new era of cyber threats. Criminal activity and geopolitical strategies are becoming more intertwined. This highlights the importance of strong global cybersecurity measures

How to prevent ransomware attacks with the help of cybersecurity solutions

The most effective method for protecting yourself from ransomware attacks is to implement a multi-layered defense. Covering multiple attack surfaces is possible with modern cybersecurity solutions, which should include:

Ransomware encryption protectionUsing sophisticated algorithms and threat intelligence, ransomware encryption protection solutions can detect ransomware patterns and anomalies in network traffic, potentially stopping attacks before they encrypt data.

Email security filters: Strong email filtering and scanning for phishing and suspicious attachments is essential since ransomware attacks often start with malicious emails.

Patching – regular software updates and patch management: To protect yourself from ransomware, make sure your software and hardware are always up-to-date. Vulnerabilities are promptly patched with automated patch management solutions.

DNS Security Protection91% of malware uses DNS for web traffic redirection, data exfiltration, or command and control. A DNS Security solution detects and blocks even the most advanced cyber threats in DNS traffic, protecting your endpoints and network.

Firewall: A firewall is an effective first line of defense because it can control the data that enters and leaves the network and block known malicious IPs.

Next generation antivirus: Cutting-edge antivirus and anti-malware solutions are capable of detecting and removing ransomware, effectively protecting endpoints.

Privileged Account Management to Protect Your Network & Endpoints: Having a PAM tool in place helps you manage user rights and the rapid flow of software installations, logs and audit trails, and maintains compliance.

MXDR – 24/7 Monitoring and Response: Once a potential threat is detected, an MXDR team can swiftly respond to it. This might involve isolating affected systems to prevent the spread of the ransomware, identifying and closing the security loopholes that allowed the attack to happen, and initiating immediate remediation actions to limit damage.

Backup and Disaster Recovery Solutions: Having solid backup solutions and disaster recovery plans in place makes it possible to restore data and limit the damage in the case of an attack.

How can Heimdal® help?

If you want to keep your endpoints, networks, emails, identities, data, and everything else connected safe from cyber threats, you need accurate monitoring and quick response. Our service combines the necessary resources and knowledge of security professionals to offer you the highest level of protection possible.

Whether you use Microsoft 365 or Google Workspace, Heimdal XDR or the MXDR service has got you covered. With our help, you can rest easy knowing that your business is safe.

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Wrapping up

Cybercrime is becoming more and more sophisticated, as seen in the evolution from the AIDS Trojan to today’s ransomware, that can lock up whole city systems and national infrastructures.

Understanding the history of ransomware helps us build better protection, reminding us to always stay alert and keep improving our cybersecurity methods.

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Author Profile

Valentin Rusu

Machine Learning Research Engineer

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Valentin is a Machine Learning Research Engineer at Heimdal with a Ph.D. in Artificial Intelligence. He is eager to share his knowledge of deep learning, computer vision, and natural language processing. His interesting blog posts show that he is willing to teach, making complicated advances in AI easy for a wide audience to understand.

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