Ashley Madison leaks: What to do when faced with Bitcoin blackmail

If you’ve been following tech news, then you’ve surely heard about the Ashley Madison leaks. Hackers –  somehow, someway – secured access to the identifying information of an estimated 37 million Ashley Madison users, and now they’ve released that information to the world.

Ashley Madison is an online dating website specifically for people looking to have an affair, so as you can imagine the identifying information belonging to the users is highly sensitive information.

Now, extortion artists are using that information to blackmail people, and they are demanding payment in Bitcoin. Emails have been circulating the web, with at least one extortion artist demanding payment of exactly 1.0000X BTC. The extortionist is using slightly different amounts of Bitcoin (so 1.00001, or 1.000002) to identify who paid what. By using cryptocurrency, this extortionist is making it near impossible to trace him or her.

[tweet_box design=”box_02″]If you’re the target of an Ashley Madison extortion scheme, here’s some simple advice: don’t pay anyone trying to extort you.[/tweet_box]

It’s not all too difficult to argue that Bitcoin has been a big net gain for users. Low transaction fees, increased privacy, an effective way to securely store wealth (when managed properly): the list of benefits for end users can go on and on. Wherever money is involved, however, you can bet that there is a dark side to the benefits.

When it comes to Bitcoin, the all-digital currency is becoming a popular choice for people engaging in illegal activities. Bitcoin has already gained a reputation for facilitating the drug trade and other illicit activities through websites such as Silk Road, but perhaps the biggest risk for end users is extortion. It turns out that many of the qualities that make Bitcoin great for regular end users, also make it the currency of choice for extortionists.

Two words of advice to Ashley Madison victims: Don’t pay

It’s possible that you came across this article after having found yourself the target of an Ashley Madison extortion scheme. That’s highly unfortunate, but I have some advice for you: don’t pay anyone trying to extort you. I’m not trying to take the moral high ground here, more trying to be pragmatic.

All of the information from the Ashley Madison leaks has been made publicly available and easy to search. If your significant other wants to check your email address, it’s not going to take much effort. Right now it’s about as easy to search through the huge slosh pile of Ashley Madison data as it is to search through an online phone book or Facebook.

Fact is, even if you pay the extortionist, there’s nothing to stop another extortionist from blackmailing you, or perhaps the same one will come back demanding a second round of payments. And despite what any hacker or extortionist might claim, there is no way to remove your information now that it has been made public.

There are other types of extortion, however, and in some cases you might be better off paying. Let’s go over these scenarios.

With other forms of Bitcoin extortion it might pay to pay

It should come as no surprise then that Bitcoin has become a popular option for online hackers looking to extort people. Indeed, one of the most prevalent malware programs plaguing the Internet right now is Cryptolocker, and the numerous derivatives that have been spun off of it.

These programs work by encrypting valuable files on your computer, and threatening to delete said files unless a ransom is paid by a certain date. Like the Ashley Madison scandal, your data is held hostage, and also like the Ashley Madison scandal, the extortionists accept payment only in Bitcoin. As time goes on, hackers and others will figure out new ways to hold data, hardware and other things hostage, and cryptocurrency will likely continue being the payment of choice.

So what should you do if and when your files are encrypted? Unfortunately, if the data is important, you might have to pay. If not, the data could be lost. When it comes to malware, the best way to protect yourself is to avoid infection in the first place. Never download new software, especially off of the Android store and from other less than trustworthy sources. Wait a month or two and watch reviews closely.

Also, if you have important files, say that next Great American novel, or your tax information, make sure you have back ups, including cold storage (flash drives) and cloud-based. This way, even if some of your files become compromised, you’ll be able to recover the data. You could also consider harder to hack some operating systems, such as Linux.

Since its inception, Bitcoin has been the target of various scams, and also a vehicle to enable scams due to the reasons outlined above. This shouldn’t come as much of a surprise: where there is money, there will be people looking to steal that money, unfortunately.

This isn’t necessarily a knock against Bitcoin. With or without the all-digital currency, hackers and extortionists will figure out a way to steal money, but it is an issue that everyone, whether they use Bitcoin or not, should be aware of.

Bitcoin: The perfect extortion currency

So why is Bitcoin extortion becoming so popular? Because digital currency is a near perfect tool for extortion. All of those anonymity features Bitcoin users love make it very difficult for legal authorities or anyone else to trace the flow of payments. This is especially true for most of the people who will be clever enough to run an extortion scheme.

The old movie cliché of having to take a bag full of unmarked bills to some hidden location is now outdated. Bitcoin automatizes all of that and makes it ridiculously easy. It is nearly impossible to trace the location or identity of people using Bitcoin transactions, especially if the proper security measures are taken. Who owns what Bitcoins also remains completely anonymous.

Add it all up and it’s nearly impossible to trace the identity of the person or organization accepting Bitcoin payments. This means law enforcement officials almost certainly won’t be able to track an extortion artist demanding payment in Bitcoin. That’s why vigilance and preventative measures are so important.