A British jeweler has sued his insurance company for refusing to cover a $7.5 million bitcoin ransom payment. The jeweler paid the hackers to prevent the publication of sensitive customer data.
Insurance company faces legal action for refusing to cover Bitcoin ransom payment
A luxury British jeweler, Graff, has sued its insurer, The Travelers Companies, for refusing to cover a bitcoin ransom payment, Bloomberg reported last week.
The jeweler has paid a $7.5 million bitcoin ransom to the Russian hacking gang Conti after the group threatened to release the data of the firm’s big customers, including Middle Eastern royalty. Graff negotiated the amount of the ransom payment with the hackers and managed to reduce it by $15 million.
Conti attacked Graff in September last year and leaked data on the royal families of Saudi Arabia, the United Arab Emirates (UAE) and Qatar. The hackers apologized to the families, but said they may need to release more data from Graff.
“Our goal is to release as much information from Graff as possible regarding the financial statements made by the neoliberal American-British-European plutocracy, who indulge in horribly expensive purchases when their nations crumble under economic duress,” reportedly said the hacking group. said.
Although authorities have discouraged individuals and businesses from paying ransoms, there are circumstances in which paying them is beneficial, particularly when the damage inflicted by a cyberattack exceeds the cost of the ransom.
Some insurers offer cyber insurance policies that cover crypto ransom payments. However, experts have warned that insurers are inadvertently funding organized crime by paying the claims of companies that have paid ransoms.
Ciaran Martin, founding CEO of the British National Cyber Security Center (NCSC), explained last year that “people pay bitcoins to criminals and demand money in return”. He stressed: “I consider this to be so avoidable. Right now, companies are incentivized to pay ransoms to make sure all of this goes away. You need to seriously consider changing the insurance law and banning these payments, or at the very least having a major consultation with the industry.
Regarding Graff’s ransom payment, a company spokesperson said, “The criminals threatened the targeted publication of our customers’ private purchases. We were determined to take all possible steps to protect their interests and therefore negotiated a payment that successfully neutralized this threat.
The jewelry company added:
We are extremely frustrated and disappointed with the attempt by travelers to avoid settlement of this insured risk. They left us no choice but to take these recovery proceedings to the High Court.
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