Ransomware authors use the bitcoin blockchain to deliver encryption keys

Ransomware authors are using the bitcoin blockchain, which serves as the cryptocurrency’s public transaction ledger, to deliver decryption keys to victims.

The technique, which removes the burden of maintaining a reliable website-based infrastructure for cybercriminals, was observed in a recent version of the CTB-Locker ransomware that targets Web servers.

CTB-Locker has targeted Windows computers for a long time, but a PHP-based variant capable of infecting websites first appeared in February, marking an interesting evolution of this ransomware threat.

[ ALSO: What is blockchain and how does it work? ]

The decryption routine in the original PHP-based CTB-Locker version involved a script called access.php that served as a gateway to the attackers’ back-end server. This gateway script was hosted on multiple hacked websites and was necessary to obtain the decryption key after victims made a payment.

The approach was not reliable, according to researchers from Web security firm Sucuri, because those hacked websites could be cleaned by their owners. Constantly updating the list of gateways used by the malware was probably a hassle for the criminals.

Because of that, CTB-Locker’s creators came up with a new approach: using the bitcoin blockchain itself to deliver the decryption keys. This new behavior was observed by Sucuri’s researchers in a CTB-Locker version released in March.

The technique relies on a field called OP_RETURN that was introduced in the Bitcoin protocol in 2014 to allow transactions to hold arbitrary bits of text, or metadata.

The new CTB-Locker variant generates a unique bitcoin wallet address for every infection. Once the victim pays the ransom by sending the required amount of bitcoins to that address, the attackers generate a new bogus transaction from that same wallet to which they append the encryption key in the OP_RETURN field.

The transaction is not validated in the bitcoin system, but it does get recorded in the blockchain and can be viewed through websites like blockexplorer.com and blockchain.info.

The CTB-Locker script uses the blockexlorer.com API to check the transaction history for the wallet corresponding to the infection and extracts the decryption key from the bogus transaction once the payment has been made.

“So, instead of using unreliable gates on third-party hacked sites, the March version of the CTB-Locker reads the keys directly from public and much more reliable blockchain information services,” the Sucuri researchers said in a blog post. “That’s the beauty of Bitcoin transactions — everything is public and transparent, and at the same time it’s possible to keep things anonymous and not traceable to real IPs.”

There are many applications that can benefit from distributed, tamper-proof systems like the blockchain, which is why the technology is being adopted by banks and other industries. Security researchers also demonstrated last year that the bitcoin blockchain can be abused by malware authors to store malicious code or commands, and the idea seems to be catching on.