BlackCat Ransomware Group Implodes After Apparent $22M Payment by Change Healthcare – Krebs on Security

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There are indications that U.S. healthcare big Change Healthcare has made a $22 million extortion fee to the notorious BlackCat ransomware group (a.ok.a. “ALPHV“) as the corporate struggles to deliver companies again on-line amid a cyberattack that has disrupted prescription drug companies nationwide for weeks. However, the cybercriminal who claims to have given BlackCat entry to Change’s community says the crime gang cheated them out of their share of the ransom, and that they nonetheless have the delicate knowledge Change reportedly paid the group to destroy. Meanwhile, the affiliate’s disclosure seems to have prompted BlackCat to stop operations fully.

Image: Varonis.

In the third week of February, a cyber intrusion at Change Healthcare started shutting down vital healthcare companies as firm techniques had been taken offline. It quickly emerged that BlackCat was behind the assault, which has disrupted the supply of pharmaceuticals for hospitals and pharmacies nationwide for practically two weeks.

On March 1, a cryptocurrency handle that safety researchers had already mapped to BlackCat obtained a single transaction value roughly $22 million. On March 3, a BlackCat affiliate posted a criticism to the unique Russian-language ransomware discussion board Ramp saying that Change Healthcare had paid a $22 million ransom for a decryption key, and to forestall 4 terabytes of stolen knowledge from being revealed on-line.

The affiliate claimed BlackCat/ALPHV took the $22 million fee however by no means paid him his proportion of the ransom. BlackCat is named a “ransomware-as-service” collective, that means they depend on freelancers or associates to contaminate new networks with their ransomware. And these associates in flip earn commissions starting from 60 to 90 p.c of any ransom quantity paid.

“But after receiving the payment ALPHV team decide to suspend our account and keep lying and delaying when we contacted ALPHV admin,” the affiliate “Notchy” wrote. “Sadly for Change Healthcare, their data [is] still with us.”

Change Healthcare has neither confirmed nor denied paying, and has responded to a number of media shops with an identical non-denial assertion — that the corporate is targeted on its investigation and on restoring companies.

Assuming Change Healthcare did pay to maintain their knowledge from being revealed, that technique appears to have gone awry: Notchy mentioned the checklist of affected Change Healthcare companions they’d stolen delicate knowledge from included Medicare and a bunch of different main insurance coverage and pharmacy networks.

On the brilliant facet, Notchy’s criticism appears to have been the ultimate nail within the coffin for the BlackCat ransomware group, which was infiltrated by the FBI and international legislation enforcement companions in late December 2023. As a part of that motion, the federal government seized the BlackCat web site and launched a decryption device to assist victims get well their techniques.

BlackCat responded by re-forming, and growing affiliate commissions to as a lot as 90 p.c. The ransomware group additionally declared it was formally eradicating any restrictions or discouragement towards concentrating on hospitals and healthcare suppliers.

However, as a substitute of responding that they might compensate and placate Notchy, a consultant for BlackCat mentioned right this moment the group was shutting down and that it had already discovered a purchaser for its ransomware supply code.

The seizure discover now displayed on the BlackCat darknet web site.

“There’s no sense in making excuses,” wrote the RAMP member “Ransom.” “Yes, we knew about the problem, and we were trying to solve it. We told the affiliate to wait. We could send you our private chat logs where we are shocked by everything that’s happening and are trying to solve the issue with the transactions by using a higher fee, but there’s no sense in doing that because we decided to fully close the project. We can officially state that we got screwed by the feds.”

BlackCat’s web site now includes a seizure discover from the FBI, however a number of researchers famous that this picture appears to have been merely reduce and pasted from the discover the FBI left in its December raid of BlackCat’s community. The FBI has not responded to requests for remark.

Fabian Wosar, head of ransomware analysis on the safety agency Emsisoft, mentioned it seems BlackCat leaders try to tug an “exit scam” on associates by withholding many ransomware fee commissions directly and shutting down the service.

“ALPHV/BlackCat did not get seized,” Wosar wrote on Twitter/X right this moment. “They are exit scamming their affiliates. It is blatantly obvious when you check the source code of their new takedown notice.”

Dmitry Smilyanets, a researcher for the safety agency Recorded Future, mentioned BlackCat’s exit rip-off was particularly harmful as a result of the affiliate nonetheless has all of the stolen knowledge, and will nonetheless demand further fee or leak the data on his personal.

“The affiliates still have this data, and they’re mad they didn’t receive this money, Smilyanets told Wired.com. “It’s a good lesson for everyone. You cannot trust criminals; their word is worth nothing.”

BlackCat’s obvious demise comes intently on the heels of the implosion of one other main ransomware group — LockBit, a ransomware gang estimated to have extorted over $120 million in funds from greater than 2,000 victims worldwide. On Feb. 20, LockBit’s web site was seized by the FBI and the U.Ok.’s National Crime Agency (NCA) following a months-long infiltration of the group.

LockBit additionally tried to revive its status on the cybercrime boards by resurrecting itself at a brand new darknet web site, and by threatening to launch knowledge from various main corporations that had been hacked by the group within the weeks and days previous to the FBI takedown.

But LockBit seems to have since misplaced any credibility the group could have as soon as had. After a much-promoted assault on the federal government of Fulton County, Ga., for instance, LockBit threatened to launch Fulton County’s knowledge until paid a ransom by Feb. 29. But when Feb. 29 rolled round, LockBit merely deleted the entry for Fulton County from its web site, together with these of a number of monetary organizations that had beforehand been extorted by the group.

Fulton County held a press convention to say that it had not paid a ransom to LockBit, nor had anybody achieved so on their behalf, and that they had been simply as mystified as everybody else as to why LockBit by no means adopted by means of on its menace to publish the county’s knowledge. Experts informed KrebsOnSecurity LockBit probably balked as a result of it was bluffing, and that the FBI probably relieved them of that knowledge of their raid.

Smilyanets’ feedback are pushed house in revelations first revealed final month by Recorded Future, which quoted an NCA official as saying LockBit by no means deleted the info after being paid a ransom, though that’s the solely motive a lot of its victims paid.

“If we do not give you decrypters, or we do not delete your data after payment, then nobody will pay us in the future,” LockBit’s extortion notes sometimes learn.

Hopefully, extra corporations are beginning to get the memo that paying cybercrooks to delete stolen knowledge is a shedding proposition throughout.

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