Technology

Graff’s Ransomware Payment Not an Unusual Move, Expert Says

TechnologyJul 12, 2022

Graff’s Ransomware Payment Not an Unusual Move, Expert Says

The high-end jeweler reportedly paid a $7.5 million ransom to a group of hackers and is suing its insurance company to cover the loss.

London—Graff Diamonds reportedly paid a $7.5 million ransom in Bitcoin to the hackers responsible for a ransomware attack on its systems last fall, a decision that is not unusual for large companies today, one expert says.

Ransomware is malware that uses encryption to hold a victim’s system or personal data hostage, basically, and demands payment to get them back.

Following the attack on Graff, Conti, the group that took credit for it, leaked data about the brand’s clients, such as their names and, potentially, their home addresses.

Graff counts many high-end clients and celebrities as customers, and the data breach included leaked data about the royal families in Saudi Arabia, the United Arab Emirates, and Qatar, prompting Conti to issue an apology to the families involved, an unusual move for the group.

Conti threatened to leak more of Graff’s data if the ransom wasn’t paid.

Though it tried to avoid paying, the high-end jeweler eventually offered $7.5 million, half the original ransom amount, and Conti accepted, according to Bloomberg, which broke the story. The jeweler paid in Bitcoin. 

Graff is also suing its insurance company, The Travelers Companies Inc., in a London court for the losses, arguing that its policy should cover the ransom payment. 

“The criminals threatened targeted publication of our customers’ private purchases. We were determined to take all possible steps to protect their interests and so negotiated a payment that successfully neutralized that threat,” a Graff spokesperson told National Jeweler. 

“Regrettably, these commercial decisions are all too common these days. Insurers know this, which is why we are extremely frustrated and disappointed by Travelers’ attempt to avoid settlement of this insured risk. They have left us with no option but to bring these recovery proceedings at the High Court.”

The Travelers Companies did not respond to a request for comment by press time.

 Related stories will be right here … 

Shayne Caffrey, marketing manager and cybersecurity awareness training lead for LeeShanok Network Solutions, echoed what Graff Diamonds said it its statement—ransom payouts like this are fairly common today.

“Deciding whether to pay the ransom is a cost/benefit analysis. It can make a lot of sense to pay up when you can’t safely restore from a backup,” he said in an email to National Jeweler.

Once a business does decide to pay, it becomes a negotiation, going back and forth on price like in any deal until it becomes worth it for both sides. 

“In this case, the initial $15 million demand may not have been worth it, but $7.5 million was,” Caffrey said. “Hackers would rather get something than nothing. This calculated approach means ransoms get paid more often than any of us would like.”

He also noted there’s rarely a guarantee that hackers will unencrypt the data even once the ransom is paid.

Caffey offered businesses two recommendations to reduce the chances of becoming a victim of cybercrime.

The first is to require every employee to undergo cybersecurity awareness training annually, with a particular focus on phishing prevention.

According to IBM, 95 percent of breaches result from human error, and the only way to fix that is through education, he noted.

But rather than using the common online training modules, Caffrey suggested bringing in a cybersecurity expert to deliver a live training, either in-person or virtually.

“In my experience, those trainings are much stickier.”

The second tip is to create a strong Backup and Disaster Recovery (BCDR) Strategy.

“Implementing these strategies can seem expensive on the surface, but they are often a fraction of the cost of paying a ransom, or even paying increased insurance premiums after a breach,” Caffrey said.

“Plus, it feels a lot better to restore your environment to a pre-ransomware instance than to reward the hackers by paying a ransom.”

More tips businesses can use to protect themselves from the Jewelers Security Alliance can be found in National Jeweler’s original story reporting on the Graff attack.
Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

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