Evolution of Ransomware: How Threat Actors are Using Regulatory Compliance Against Businesses

Ransomware is a type of malicious cyber attack that encrypts the victim's data and demands a ransom in exchange for the decryption of the data. In recent years, ransomware has evolved from a simple extortion scheme to a complex and multifaceted threat that leverages data theft, data exposure, and regulatory compliance to pressure the victims into paying. As more and more companies plan for ransomware attacks and can recover in hours or days using backups, threat actors have adapted their tactics to target the sensitive and valuable data that may be subject to legal obligations and reputational risks.

What You Need to Know About Ransomware's Evolution:

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How Attackers Use Regulatory Compliance Against Their Victims

Ransomware attacks are becoming increasingly sophisticated, and one emerging trend involves using threats of reporting regulatory non-compliance against organizations. Here's how it works: after encrypting the data, the threat actor will exfiltrate it and then threaten to release it to the public or report it to regulatory bodies such as SEC, FDIC, state and federal authorities. This can result in severe consequences for the organization, including fines, penalties, lawsuits, audits, investigations, and loss of trust from customers, partners, and investors.

For example, if the data contains personal information of customers or employees, the organization may have to comply with data breach notification laws in various jurisdictions, such as the EU General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). Similarly, if the data involves trade secrets, intellectual property, or financial information, the organization may have to report the incident to the Securities and Exchange Commission (SEC), other regulators, and shareholders and stakeholders. 

Moreover, the threat actor may use the organization's customers' or contacts' data to carry out additional attacks or frauds. Therefore, it's crucial for organizations to have robust cybersecurity measures and incident response plans in place to prevent ransomware attacks and minimize the damage caused by them.

How Can Organizations Protect Against this Type of Threat?

The best defense is to prevent data from leaving the organization in the first place. This requires implementing a robust cybersecurity program that includes firewalls, antivirus software, encryption, backups, access control, monitoring, incident response, and employee training. Additionally, organizations should consider implementing specific measures to mitigate the risk of data exfiltration and regulatory compliance issues, such as:

Egress Rules

  • These are rules that prevent unauthorized web traffic from leaving the network. Egress rules can help block malicious connections to external servers or domains that may be used by threat actors to exfiltrate data.


  • This is a technique that restricts access to web content based on the geographic location of the user or device. Geo blocking can help prevent threat actors from accessing data or systems from countries that are known to harbor cybercriminals or hostile governments.

Data Loss Prevention (DLP)

  • This is a technology that monitors and controls the movement of sensitive data across networks and devices. DLP can help prevent data leakage by detecting and blocking unauthorized transfers of data via email, web, cloud services, removable media, or other channels.

Managed Detection and Response (MDR)

  • This is a service that provides continuous monitoring and analysis of network activity and alerts for potential threats. MDR can help detect and respond to ransomware attacks by identifying anomalous behavior, isolating infected devices, restoring affected data, and providing forensic investigation.

DNS Firewalls

  • These are firewalls that filter web traffic based on domain name system (DNS) queries and responses. DNS firewalls can help prevent ransomware attacks by blocking access to malicious domains that may host ransomware payloads or command-and-control servers.


In Conclusion

Ransomware is a serious and evolving threat that poses significant challenges for organizations in terms of data protection and regulatory compliance. Organizations should take proactive steps to prevent ransomware attacks and prepare for potential scenarios involving data exfiltration and reporting obligations. By doing so, they can reduce the impact of ransomware attacks and protect their reputation and assets.