British multinational jeweler Graff Diamonds Corp. has filed a lawsuit against its insurer, The Travelers Companies, Inc. (Travelers), for failing to pay compensation after paying $7.5 million in Bitcoin to ransomware hackers.
Graff Sues Insurer Over $7.5 Million BTC Ransom Loss
According to a Bloomberg report on Wednesday, Graff’s security systems were exploited by the notorious Russian hacking gang Conti in September 2021. The breach gave the group access to data belonging to “high-level” clients, including the former US President Donald Trump and royal families in Saudi Arabia, the United Arab Emirates and Qatar.
After the attack, Conti published 69,000 documents containing private information from Graff’s clients and threatened to publish more if the billion-dollar jewelry brand did not pay $15 million in Bitcoin.
In November 2021, Graff paid the gang 118 BTC (worth $7.5 million at the time), half the amount originally requested. The company said it had to pay the ransom to protect its customers.
“Criminals threatened to selectively publish 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,” a spokesperson for Graff said.
After the incident, the company hoped that its insurer would cover the losses suffered by the attack as it was an “insured risk”. However, Graff has yet to receive compensation from the travellers.
“We are extremely frustrated and disappointed with Travelers’ attempt to avoid settlement of this insured risk. We were left with no choice but to take these recovery proceedings to the High Court,” the jeweler said.
Bitcoin ransomware attack on the rise
Meanwhile, Bitcoin ransomware attacks have become common in recent years.
In May 2021, Elliptic, a blockchain analytics and security company, revealed that the infamous DarkSide cybercriminal group had received $90 million in ransomware payments.
In June 2021, crypto potato reported that the US department of the world’s largest meat producer, JBS SA, was forced to pay hackers $11 million in Bitcoin to prevent further ransomware attacks on its factories.
Featured image courtesy of The Graff
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