Thousands of American companies bought Bitcoin for this reason

To prevent significant losses from servers and computers being encrypted by ransomware, many major U.S. companies are buying Bitcoin to ensure they can respond quickly to malware encryption.

A type of Bitcoin ransomware that uses a time-locking system has become quite popular since the beginning of 2016. The designers and developers of the ransomware deliberately set a time frame (usually one week) in order to put pressure on the victim to pay the Bitcoin ransom.

How blackmail works

Despite the emergence of easily accessible cloud platforms, many companies (especially large enterprises) still run local servers, databases, and computers to store important data. These data, including users' personal information, customers' financial data, and company confidential files, are stored on local servers. However, when local servers are connected to the Internet, they are vulnerable to ransomware or malware attacks.

Ransomware can be deployed or installed on a server or device through a variety of methods. The most common method of ransomware deployment is to post malicious URLs and files in large quantities. If the user downloads or opens these URLs, a ransomware will be automatically installed on the victim's device. The ransomware will then run on the server and device backend and encrypt every piece of information on the device.

Bitcoin ransom wallet

Chris Pogue, CEO of information management technology company Nuix, said many large companies with important financial or personal data are setting up Bitcoin wallets and purchasing some Bitcoins in case the company's servers or computers are encrypted by ransomware and suffer major losses.

According to Pogue, thousands of US companies have set up their own Bitcoin wallets and purchased the digital currency to pay ransomware. Since their servers and devices contain sensitive information (of great value to customers), Pogue explained that these companies are taking this tactic very seriously.

Pogue wrote:

“A lot of companies are setting up bitcoin wallets as a response.”

However, DataGravity CEO Paula Long noted that buying bitcoin to pay ransoms puts companies in a “moral dilemma,” as if they are intentionally buying the digital currency to support cybercriminals.

Help the bad guys

Although the FBI and other law enforcement agencies have encouraged companies not to pay Bitcoin ransoms and promised to let extortionists send decryption keys to their victims, Long believes that it is a company's responsibility to protect the data of its customers and partners.

“It’s a moral dilemma. If you pay, you’re helping the bad guys. But you can’t take the moral high ground. It puts your company at risk,” Long said.

Due to the rapid development of ransomware, some companies and analysts claim that the intentions of ransomware dealers are always negative. However, in some rare cases, some ransomware developers will send decryption keys to victims for free.

For example, in December last year, a ransomware developer sent a free decryption key to a victim using the pseudonym "SwervinErvin" after he shared his company's mission to help underprivileged children.

What do you think?

Here are five well-known organizations that have been blackmailed by Bitcoin: