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Monday, March 27, 2023

Insurance Company Sued for Refusing to Cover $7.5 Million Bitcoin Ransom Payment

Insurance Company Sued for Refusing to Cover $7.5 Million Bitcoin Ransom Payment – According to Bloomberg last week, a high-end British jeweler named Graff has filed a lawsuit against The Travelers Companies for failing to pay out on a bitcoin ransom.

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The jeweler paid the Russian hacking gang Conti a $7.5 million bitcoin ransom after the group threatened to disclose information about the business’s high-profile clients, including Middle Eastern royalty. Graff and the hackers were able to cut the $15 million ransom payment through negotiation.

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In September of last year, Conti attacked Graff and released information regarding the royal families of Saudi Arabia, the United Arab Emirates (UAE), and Qatar. Though they expressed regret to the families, the hackers warned that they might have to release more of Graff’s data.

“The US, UK, and EU neo-liberal plutocracy engages in obscenely expensive purchases when their countries are collapsing under economic pressure. Our goal is to publish as much of Graff’s information regarding the financial declarations made by the US, UK, and EU as possible,” the hacking group reportedly said.

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Although authorities have advised against paying ransoms, there are some situations where doing so is advantageous, especially when the harm caused by a cyberattack exceeds the cost of the ransom.

Cyber insurance policies from some insurers include coverage for cryptocurrency ransom payments. However, experts have cautioned that by settling claims from businesses who paid ransoms, insurance unintentionally support organized crime.

People are paying criminals in bitcoin and then reclaiming their money, according to Ciaran Martin, the founding CEO of the British National Cyber Security Centre (NCSC), who made this statement last year. “I see this as so avoidable,” he emphasized. “Companies currently have incentives to pay ransoms to ensure that everything goes away. You need to seriously consider altering the insurance laws to outlaw these payments or, at the very least, hold a significant industry consultation.”

A company spokeswoman explained Graff’s response to the ransom demand, saying: “The criminals threatened targeted publication of our clients’ confidential transactions. We negotiated a payment that successfully eliminated that threat because we were committed to doing everything in our power to safeguard their interests.”

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The jewelry business continued:

“By trying to avoid paying up on this covered risk, Travelers has left us feeling very dissatisfied and disappointed. We are forced to file these recovery procedures before the High Court because they have given us no other choice.”

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