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There are indications that U.S. healthcare giant Change Healthcare has made a $22 million extortion payment to the infamous BlackCat ransomware group (a.k.a. “ALPHV“) as the company struggles to bring services back online amid a cyberattack that has disrupted prescription drug services nationwide for weeks. However, the cybercriminal who claims to have given BlackCat access to Change’s network says the crime gang cheated them out of their share of the ransom, and that they still have the sensitive data Change reportedly paid the group to destroy. Meanwhile, the affiliate’s disclosure appears to have prompted BlackCat to cease operations entirely.
Image: Varonis.
In the third week of February, a cyber intrusion at Change Healthcare began shutting down important healthcare services as company systems were taken offline. It soon emerged that BlackCat was behind the attack, which has disrupted the delivery of prescription drugs for hospitals and pharmacies nationwide for nearly two weeks.
On March 1, a cryptocurrency address that security researchers had already mapped to BlackCat received a single transaction worth approximately $22 million. On March 3, a BlackCat affiliate posted a complaint to the exclusive Russian-language ransomware forum Ramp saying that Change Healthcare had paid a $22 million ransom for a decryption key, and to prevent four terabytes of stolen data from being published online.
The affiliate claimed BlackCat/ALPHV took the $22 million payment but never paid him his percentage of the ransom. BlackCat is known as a “ransomware-as-service” collective, meaning they rely on freelancers or affiliates to infect new networks with their ransomware. And those affiliates in turn earn commissions ranging from 60 to 90 percent of any ransom amount paid.
“But after receiving the payment ALPHV team decide to suspend our account and keep lying and delaying when we contacted ALPHV admin,” the affiliate “Notchy” wrote. “Sadly for Change Healthcare, their data [is] still with us.”
Change Healthcare has neither confirmed nor denied paying, and has responded to multiple media outlets with a similar non-denial statement — that the company is focused on its investigation and on restoring services.
Assuming Change Healthcare did pay to keep their data from being published, that strategy seems to have gone awry: Notchy said the list of affected Change Healthcare partners they’d stolen sensitive data from included Medicare and a host of other major insurance and pharmacy networks.
On the bright side, Notchy’s complaint seems to have been the final nail in the coffin for the BlackCat ransomware group, which was infiltrated by the FBI and foreign law enforcement partners in late December 2023. As part of that action, the government seized the BlackCat website and released a decryption tool to help victims recover their systems.
BlackCat responded by re-forming, and increasing affiliate commissions to as much as 90 percent. The ransomware group also declared it was formally removing any restrictions or discouragement against targeting hospitals and healthcare providers.
However, instead of responding that they would compensate and placate Notchy, a representative for BlackCat said today the group was shutting down and that it had already found a buyer for its ransomware source code.
The seizure notice now displayed on the BlackCat darknet website.
“There’s no sense in making excuses,” wrote the RAMP member “Ransom.” “Yes, we knew about the problem, and we were trying to solve it. We told the affiliate to wait. We could send you our private chat logs where we are shocked by everything that’s happening and are trying to solve the issue with the transactions by using a higher fee, but there’s no sense in doing that because we decided to fully close the project. We can officially state that we got screwed by the feds.”
BlackCat’s website now features a seizure notice from the FBI, but several researchers noted that this image seems to have been merely cut and pasted from the notice the FBI left in its December raid of BlackCat’s network. The FBI has not responded to requests for comment.
Fabian Wosar, head of ransomware research at the security firm Emsisoft, said it appears BlackCat leaders are trying to pull an “exit scam” on affiliates by withholding many ransomware payment commissions at once and shutting down the service.
“ALPHV/BlackCat did not get seized,” Wosar wrote on Twitter/X today. “They are exit scamming their affiliates. It is blatantly obvious when you check the source code of their new takedown notice.”
Dmitry Smilyanets, a researcher for the security firm Recorded Future, said BlackCat’s exit scam was especially dangerous because the affiliate still has all the stolen data, and could still demand additional payment or leak the information on his own.
“The affiliates still have this data, and they’re mad they didn’t receive this money, Smilyanets told Wired.com. “It’s a good lesson for everyone. You cannot trust criminals; their word is worth nothing.”
BlackCat’s apparent demise comes closely on the heels of the implosion of another major ransomware group — LockBit, a ransomware gang estimated to have extorted over $120 million in payments from more than 2,000 victims worldwide. On Feb. 20, LockBit’s website was seized by the FBI and the U.K.’s National Crime Agency (NCA) following a months-long infiltration of the group.
LockBit also tried to restore its reputation on the cybercrime forums by resurrecting itself at a new darknet website, and by threatening to release data from a number of major companies that were hacked by the group in the weeks and days prior to the FBI takedown.
But LockBit appears to have since lost any credibility the group may have once had. After a much-promoted attack on the government of Fulton County, Ga., for example, LockBit threatened to release Fulton County’s data unless paid a ransom by Feb. 29. But when Feb. 29 rolled around, LockBit simply deleted the entry for Fulton County from its site, along with those of several financial organizations that had previously been extorted by the group.
Fulton County held a press conference to say that it had not paid a ransom to LockBit, nor had anyone done so on their behalf, and that they were just as mystified as everyone else as to why LockBit never followed through on its threat to publish the county’s data. Experts told KrebsOnSecurity LockBit likely balked because it was bluffing, and that the FBI likely relieved them of that data in their raid.
Smilyanets’ comments are driven home in revelations first published last month by Recorded Future, which quoted an NCA official as saying LockBit never deleted the data after being paid a ransom, even though that is the only reason many of its victims paid.
“If we do not give you decrypters, or we do not delete your data after payment, then nobody will pay us in the future,” LockBit’s extortion notes typically read.
Hopefully, more companies are starting to get the memo that paying cybercrooks to delete stolen data is a losing proposition all around.
A Russian man identified by KrebsOnSecurity in January 2022 as a prolific and vocal member of several top ransomware groups was the subject of two indictments unsealed by the Justice Department today. U.S. prosecutors say Mikhail Pavolovich Matveev, a.k.a. “Wazawaka” and “Boriselcin” worked with three different ransomware gangs that extorted hundreds of millions of dollars from companies, schools, hospitals and government agencies.
An FBI wanted poster for Matveev.
Indictments returned in New Jersey and the District of Columbia allege that Matveev was involved in a conspiracy to distribute ransomware from three different strains or affiliate groups, including Babuk, Hive and LockBit.
The indictments allege that on June 25, 2020, Matveev and his LockBit co-conspirators deployed LockBit ransomware against a law enforcement agency in Passaic County, New Jersey. Prosecutors say that on May 27, 2022, Matveev conspired with Hive to ransom a nonprofit behavioral healthcare organization headquartered in Mercer County, New Jersey. And on April 26, 2021, Matveev and his Babuk gang allegedly deployed ransomware against the Metropolitan Police Department in Washington, D.C.
Meanwhile, the U.S. Department of Treasury has added Matveev to its list of persons with whom it is illegal to transact financially. Also, the U.S. State Department is offering a $10 million reward for the capture and/or prosecution of Matveev, although he is unlikely to face either as long as he continues to reside in Russia.
In a January 2021 discussion on a top Russian cybercrime forum, Matveev’s alleged alter ego Wazawaka said he had no plans to leave the protection of “Mother Russia,” and that traveling abroad was not an option for him.
“Mother Russia will help you,” Wazawaka concluded. “Love your country, and you will always get away with everything.”
In January 2022, KrebsOnSecurity published Who is the Network Access Broker ‘Wazawaka,’ which followed clues from Wazawaka’s many pseudonyms and contact details on the Russian-language cybercrime forums back to a 33-year-old Mikhail Matveev from Abaza, RU (the FBI says his date of birth is Aug. 17, 1992).
A month after that story ran, a man who appeared identical to the social media photos for Matveev began posting on Twitter a series of bizarre selfie videos in which he lashed out at security journalists and researchers (including this author), while using the same Twitter account to drop exploit code for a widely-used virtual private networking (VPN) appliance.
“Hello Brian Krebs! You did a really great job actually, really well, fucking great — it’s great that journalism works so well in the US,” Matveev said in one of the videos. “By the way, it is my voice in the background, I just love myself a lot.”
Prosecutors allege Matveev used a dizzying stream of monikers on the cybercrime forums, including “Boriselcin,” a talkative and brash personality who was simultaneously the public persona of Babuk, a ransomware affiliate program that surfaced on New Year’s Eve 2020.
Previous reporting here revealed that Matveev’s alter egos included “Orange,” the founder of the RAMP ransomware forum. RAMP stands for “Ransom Anon Market Place, and analysts at the security firm Flashpoint say the forum was created “directly in response to several large Dark Web forums banning ransomware collectives on their site following the Colonial Pipeline attack by ransomware group ‘DarkSide.”
As noted in last year’s investigations into Matveev, his alleged cybercriminal handles all were driven by a uniquely communitarian view that when organizations being held for ransom decline to cooperate or pay up, any data stolen from the victim should be published on the Russian cybercrime forums for all to plunder — not privately sold to the highest bidder.
In thread after thread on the crime forum XSS, Matveev’s alleged alias “Uhodiransomwar” could be seen posting download links to databases from companies that have refused to negotiate after five days.
Matveev is charged with conspiring to transmit ransom demands, conspiring to damage protected computers, and intentionally damaging protected computers. If convicted, he faces more than 20 years in prison.
Further reading:
Who is the Network Access Broker “Wazawaka?”
The New Jersey indictment against Matveev (PDF)
The indictment from the U.S. attorney’s office in Washington, D.C. (PDF)
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