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Funding For Hackers: Venture Capital (VC) Ecosystem Created To Fuel Deadlier Cyber Attack

RSA Conference is one the most coveted event for Cyber Attack Defenders, which has been taking place every year for the last 30 years. In this event, the best of & brightest mind gathers to discuss, how to stop Cyber Attacks with the use of the latest tools, technologies.

Interestingly during the same time, when this event takes place, Hackers organize the exactly similar type of formal events in their private circuit, wherein they call for the papers on – Best methodology to break the systems, configuring the malware, MobileOS botnet, ATM/POS cracks, Fake GPS Signals, unusual cryptocurrency mining software, stealing private keys & wallets, Non-Fungible Tokens (NFTs), etc.

In this year’s event, on April 20 administrator of one of the very famous groups announced for call of paper on the subject “ How to Target CryptoCurrency Technologies”. For this, they had opened 30 days windows for the paper submission, with prize money of US $100K.

This prize money was pooled from reputed forum members of the Darknet, who were ready to sponsor this with their contribution. The interesting part to note is, even the submitter got $50 just for submitting his case studies.

With these sort of rewarding incentives on the table, shortly after opening submissions, hackers started posting their papers for the larger community to see and these included: manipulating APIs of crypto currency-related services, decentralized ledger (DL) to obtain private keys of crypto wallets, creating phishing sites for crypto mining & their seed phrases, etc. (seed phrase is the list of words, which store all the information for account recovery), Non Fungible Tokens (NFTs).

Reprentational images for Crypto wallet                            NFC Tokens                                                                                                 Crypto Mining

Comparison with VC Funding : Typically in VC funding, all the startups showcase their project in front of the VC community, tell about their past performance & achievement. Similarly in the dark side of the world, the attackers need to showcase their previous hacks to convince Funders about their ability. Typically these events take place through secure chat apps like Session/Snapchat/Telegram channels.

Why Funding is required & Investors are funding this :

Earlier Ransomware related operation use to get managed through self-funded/bootstrap mode as not much of the compute power were required. Hackers use to manage these costs through retail operations. Since the nature of Hacks has changed drastically, a bit of the enhanced computer infrastructure is required to accomplish this.

Especially when they need to simulate the infrastructure for crypto mining, payment gateway simulations, distributing decryption keys. For these full-fledged cloud compute & server infrastructure is required, which entails a good amount of CAPEX & OPEX. Additionally, they need to work with sub-brokers, who have a ready set of credentials.

To achieve these all, hackers have taken professional routes, similar to Start-ups who go for VC funding for their projects. It has been observed a new investment ecosystem that provides a way for those in the data ransoming business to diversify their risk. As they are fully aware down the line it’s going to be the potentially big business avenue. The underground world of ransomware is essentially developing its venture capital ecosystem, with ransomware attackers pooling their funds to back new criminal operations in exchange for a cut of future earnings

According to one expert, the danger is that the venture capital approach will lead to the same kind of rapid advances previous seen in other areas of software and digital technology, making it increasingly easy to run a ransomware operation, just as it previously became easier to run an online store or other digital business.

For Cyber Hackers as part of continued innovation, very soon they are going to target NFTs due to their exorbitant price tags. Hackers go where the money is held, and the money floating around cryptocurrency continues to climb to a northward trajectory. As per recent report Crypto Currency related attacks grew by 192% since last year.

Food for Thought:

Attack surfaces will grow as the technology stack around cryptocurrency and decentralized finance continues to grow. As these services come online, businesses need to proactively watch the underground in order to strategize for how criminals may target their business-critical functions with information from contests, like the one discovered above, to devastate their organization.

Case Study by: RED Team of Armantec, led by Shamsher Bahadur – Cyber Security Practice Head.

This Article has been Submitted by Armantec Systems Pvt Ltd (, a Noida Based Threat Intelligence & RED Teaming Consulting Firm, with the prime focus on custom Ransomware Attacks Solution for Critical Information Infrastructures (CIIs).

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