Article
What To Do When A Hacker Encrypts Your Data
Combating Ransomware
Cyber Threats

RANSOMWARE, RANSOMWARE...
It’s the boogeyman looming in the corners of every digital task we do. Even businesses that don’t operate primarily online have data points that can be exploited, and hackers are always on the lookout for those with poor cyber health.

[This article originally appeared in Risk & Insurance at:
We Talk About Ransomware All the Time. So What Do We Actually Do When a Hacker Has Our Data? : Risk & Insurance (riskandinsurance.com)]
The cost of an attack is growing, too. As Gallagher reported in its 2022 Cyber Insurance Market Conditions Report, during the first six months of 2021, $590 million were paid in ransom payments, as opposed to $416 million paid in all of 2020.
While we talk about best practices to protect ourselves, how often do we flip the conversation and look at the steps we must take when a hack actually occurs? “Unfortunately, no one is safe from ransomware,” said Evgueni Erchov, head of security research & strategy, Arete.
“The most sophisticated groups can focus on larger organizations … but we also see the small companies being targeted all the time.”
Erchov is an experienced hacker negotiator, with more than 20 years in IT security, application development, cybercrime investigations, computer forensics, cryptocurrency blockchain and cyber threat intelligence analysis.
Erchov, alongside John Farley, managing director, cyber practice, at Gallagher, put on a recent webinar on what to do when a hacker strikes, running through a simulated hack to give businesses recovery tips.
The presentation, “What Really Happens When You Negotiate With a Hacker: An Insider’s View,” illuminated several key points, from how to communicate with hackers, where to gather cryptocurrency if a hacker demands it, and what conversations with underwriters should look like when reviewing cyber controls.
Getting in Touch with Your Hacker
Believe it or not, hacking is a business, and hackers treat what they do as such.
Organized criminals work together to suss out vulnerable targets — from a large corporation all the way down to the neighborhood corner store. If the business has the capability to store data — credit card info, health records, trade secrets, you name it — the business is a viable target.
When a hacker infiltrates a system, the language used in their demand can follow a similar pattern. Hackers will note the data they have access to — employee personal records, partner and client data, financial and accountant documents — and how they intend to gain ransom for encrypting these files.
Next steps will focus on how to communicate with the hacker.
“It depends on how sophisticated the group is,” Erchov said. “Sometimes a ransom note will contain an email address that will be used to go back and forth and negotiate a ransom.”
Money and Extortion: How Demands Lives Have Changed
“In the old days, five or six years ago, we had hackers typically freezing our data, we had extortion, but if you didn’t pay, you just didn’t get your data back,” Farley said.
The scare tactics being used by hackers are changing.
In the simulation during the presentation, the fictive hacker threatens to reveal extremely sensitive data from the company CEO if they don’t receive $1 million in bitcoin within five days. To prove how serious they are, the hacker sends an excerpt of that sensitive info.
Extortion and double extortion are commonplace for hackers these days, Erchov said.
“That really happens quite often, on average, close to 70% of cases nowadays will involve data exfiltration along with the encryption,” he said.
It’s a tactic used to encourage payment, because it not only involves the encryption of sensitive data, but it also hangs corporate reputation in the balance. The ransom becomes more than just retrieving data; it becomes about keeping that data out of public hands.
Bitcoin: How the Heck Do I get My Hands on That?
Once the decision to pay the hackers is made, the next issue is figuring out how to follow through. More hackers are demanding bitcoin payments in their ransoms, but not all companies are working in bitcoin.
So then, what do companies do when their data is held for ransom?
As noted by Farley and Erchov, people believe the first place to go for bitcoin is their cyber insurer. But this is not correct.
“The forensic investigator … the company that deals with forensic investigation and interim response, that’s typically the company that will be handling that,” Erchov said.
However, the cyber insurer can be there to guide the process.
“The beauty of the cyber insurance policy is that you have access to these companies [like a forensic investigation company] that have access to bitcoin and can facilitate the payments,” added Farley.
Forensic investigation companies are often operating on a 24/7 basis as well, and the cyber insurance policy acts as a bridge between client and forensics.
Farley noted these payments are also on reimbursement, so the cyber policy is typically designed to reimburse ransoms after the fact.
The Decision to Negotiate
While paying a hacker immediately to get encrypted data back seems like a no brainer, sometimes negotiating down the ransom is the best line of action, especially if a ransom demand is really large or unfeasible.
But what if low-balling a hacker leads to a bigger data leak?
“They almost expect the initial demand is not going to be paid,” said Erchov.
But it’s important to partner with a negotiator, he said, because the negotiation strategist knows what is a reasonable offer versus what could anger the hacker.
The good news: On average, hackers will negotiate down a ransom by 70%, according to Erchov, based on the cases his company Arete has dealt with in the past.
But that depends on several different factors.
“Potentially, the backups might be available. So in that case, if we only have to negotiate for promise of data deletion, it gives us additional leverage because we don’t need a decryption tool,” Erchov gave as an example.
Questions Your Underwriter Will Ask
“We have a very hard cyber insurance marketplace today,” said Farley. “We’re in a place where ransomware and other factors are really getting the underwriting community very nervous.”
Because of the risk landscape and the size of demand, rates are increasing. Some entities with less cyber controls in place are facing nonrenewal.
So, how can a company make itself a good risk for an underwriter?
“They are going to have a lot of questions for you,” said Farley. He noted his list was not all encompassing, but these are key areas to start.
“Multi-factor authentication. If you don’t have that in place, there’s a chance you might not get underwritten at all,” he said.
Underwriters will also want to see patch management — a written and detailed plan to manage any hacker exploitation. Point detection and response, which is technology used to find a hacker in your system and alert you to them, is another control underwriters like to see.
At the end of the day, the key thing to remember is if your company is on the receiving end of a cyber ransomware event, call your cyber partners immediately.
They will know which resources, from bitcoin, negotiators, forensics and more, will aid in appeasing the hacker and getting your data secured.
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Article
Ransomware Trends & Data Insights: October 2026
Although Akira once again emerged as the most active ransomware group in October, overall ransomware and extortion activity was not dominated by any single threat group and instead remained widely distributed among a variety of threat actors, continuing the trend that began around August. Arete identified 31 unique named threat groups in October, the most observed in a single month so far in 2026. In addition to Akira, Settra, and The Gentlemen were among the three most active groups. Several new threat actors also emerged, including BYOD, Kubera Team, QWCrypt, AoQin, Emperador, Osiris Team, and Cinder, with Cinder assessed as possibly part of a threat actor cluster affiliated with the former BlackFile group.

Figure 1. Activity from the top 10 threat groups in October 2026
Throughout the month, analysts at Arete identified several trends behind the threat actors perpetrating cybercrime activities:
PHP2Shell emerged as one of the most significant threats in October, with increasing exploitation of the critical PHP vulnerabilities CVE-2026-109618 and CVE-2026-109619. Other notable vulnerabilities included CVE-2026-104286 affecting FortiMail, and CVE-2026-102255, a critical pre-authentication Server-Side Request Forgery (SSRF) vulnerability affecting SonicWall SMA1000 appliances, highlighting continued threat actor interest in internet-facing enterprise infrastructure.
International law enforcement operations against cybercriminal groups continued to make headlines in October. German authorities announced the arrest of 28-year-old Russian national Vladimir K., suspected of being a senior operator within the Qilin Ransomware-as-a-Service (RaaS) group. Separately, the FBI arrested an individual with suspected links to ShinyHunters, adding to recent law enforcement activity targeting ransomware and extortion groups, including the disruption of KillSec. While Vladimir K.’s arrest has not yet had a notable impact on Qilin’s operational activity, it could provide law enforcement with greater insight into the group’s infrastructure and affiliate network, potentially supporting further disruption efforts.
In early October, “The Luna Moth Files” exposed several files containing alleged internal communications associated with Luna Moth, also known as Silent Ransom Group, revealing insights into the group’s social engineering, data extortion, and victim negotiation operations. However, several claims remain unverified, and the exposure has not notably disrupted the group’s activity thus far, as it was among the top threat actors Arete observed throughout the month.
Sources
Arete Internal
Article
PHP2Shell Exploitation Update
PHP2Shell exploitation activity continues to increase globally, with threat actors targeting the critical PHP remote code execution (RCE) vulnerabilities CVE-2026-109618 and CVE-2026-109619. Researchers recently identified low-volume scanning targeting unpatched or partially mitigated hosts across multiple countries and sectors, and the activity is assessed with moderate confidence as linked to a Korean-speaking operator associated with the Lazarus Group ecosystem. While PHP2Shell (CVE-2026-109618 and CVE-2026-109619) has been patched in PHP 8.5.12, 8.4.27, 8.3.36, and 8.2.35, the separately identified CVE-2026-115560 remains unpatched.
What’s Notable and Unique
PHP2Shell vulnerabilities can cause memory corruption due to improper error handling, potentially allowing threat actors to achieve remote code execution on vulnerable PHP servers.
Observed activity includes mass scanning, PHP environment fingerprinting, exploitation attempts, credential and secret theft attempts, and attempts to deliver second-stage payloads and malware.
Successful in-the-wild exploitation has also been reported against honeypots, resulting in shell command execution and the retrieval of additional payloads, demonstrating the potential for follow-on malicious activity.
Mitigations
Organizations should prioritize upgrading internet-facing PHP deployments to patched versions, migrating unsupported PHP versions, updating embedded and containerized PHP runtimes, and implementing available Web Application Firewall (WAF) protections as a temporary defense-in-depth measure.
Analyst Comments
PHP2Shell poses a significant security concern due to its potential to enable unauthenticated remote code execution on vulnerable PHP servers. The progression from mass scanning and exploitation attempts to reports of successful command execution demonstrates the potential for these vulnerabilities to support initial access and subsequent malicious activity. Arete has been closely monitoring PHP2Shell exploitation activity and regularly reviewing and updating related indicators to support detection and blocking efforts. Given the potential for remote exploitation and follow-on activity, PHP2Shell represents a high-priority initial-access risk, emphasizing the importance of timely patching and remediation of affected PHP environments.
Sources
PHP shares mitigation for new RCE vulnerability with no patch
PHP2Shell Exploitation Attempts Continue Amid Suspected N. Korea Global Scanning Activity
PHP2Shell Exploit Attempts Hit Millions as Attackers Try to Deploy Mirai Malware
Advisory: PHP2Shell Vulnerabilities (CVE-2026-109618, CVE-2026-109619)
Article
LiteLLM Supply-Chain Compromise
A software supply-chain attack compromised the release pipeline of LiteLLM, a widely used open-source Python SDK and AI gateway. Attackers leveraged the compromised pipeline on October 21st to publish a malicious LiteLLM version through PyPI and associated Docker registries. The affected release, LiteLLM 1.107.0, contained malware designed to steal credentials, sensitive configuration data, private keys, browser information, and other secrets from compromised systems.
What’s Notable and Unique
The incident is particularly significant because LiteLLM provides a common API for applications to interact with AI models from multiple providers. It is reported that the project had approximately 61,800 GitHub stars and 92 million monthly PyPI downloads.
Rather than modifying the core LiteLLM application source code, the threat actors reportedly tampered with the installation package itself. The malware was designed for broad credential and information theft and encrypted the collected data before uploading it to the attacker's endpoint.
The compromise went beyond one-time credential theft. A malicious Python component launched a detached loader that checked a GitHub-hosted pointer every hour and could download Python code from an external server for execution on the compromised machine. This provided threat actors with a mechanism for subsequent remote code execution.
Analyst Comments
Although the malicious packages were subsequently removed, simply uninstalling or deleting the affected LiteLLM package may not be sufficient, because malicious Python startup files or the detached loader could remain on the host. All exposed information should be rotated immediately, and infected systems should be isolated and rebuilt from clean backups. The most recent clean release prior to the attack, LiteLLM 1.106.2, is currently the suggested recovery version.
Sources
LiteLLM release pipeline hacked to distribute info-stealer malware
LiteLLM 1.107.0 Compromised: Python Startup Hooks Steal Cloud, AI, and Proxy Credentials
The Collector Reaches Beyond Provider API Keys
Article
French Supermarket Cyberattack Highlights Risks in Exposed Refrigeration Controllers
Hundreds of French supermarkets were reportedly affected by a cyberattack in which threat actors compromised internet-connected refrigeration controllers and manipulated temperature and defrost settings, which caused refrigeration units to overheat, resulting in widespread food spoilage and significant financial loss. Impacted refrigeration systems were associated with Danfoss, Copeland, and Dixell, and demonstrated how vulnerabilities in industrial control systems (ICS) can disrupt physical operations without relying on conventional data theft or encryption. The attack also raised concerns about the wider exposure of similar devices, as thousands of refrigeration management interfaces remain accessible from the public internet. The incident highlights the growing risk posed by insecure operational technology (OT), particularly where legacy equipment and remote-management interfaces lack adequate security controls.
What’s Notable and Unique
Researchers identified approximately 2,765 internet-accessible Danfoss AK-SM 800A interfaces during assessment. This figure reflects the scope of that research and should not be interpreted as a current count of exposed devices. Publicly accessible management interfaces increase the opportunity for unauthorized access to industrial equipment.
Research also identified several security flaws in the Danfoss AK-SM 800A platform, including an authentication bypass command injection that could enable remote code execution and a weakness involving web-server configuration changes. Danfoss addressed these findings through firmware updates.
Authorities reported compromised Danfoss AK-SM and AK-SC systems, alongside Copeland XWEB and Dixell XWEB monitoring platforms.
Analyst Comments
The incident demonstrates the business consequences of insufficiently secured industrial infrastructure and reinforces the need to integrate OT security into enterprise risk management. Organizations operating connected facility systems should establish clear ownership of industrial assets, enforce secure remote-access policies, and prioritize remediation based on exposure and operational criticality. The findings also highlight the importance of coordinating security teams with facilities and engineering personnel to ensure that protective measures do not compromise essential operations. A risk-based approach to OT security can help organizations reduce exposure while maintaining the availability and reliability of critical equipment.
Sources
France Supermarket Hacks Expose Risks of Internet-Facing Refrigeration Systems
Freeze the Controller, Defrost the Food: Uncovering Vulnerabilities in Danfoss Refrigeration Controllers
Attackers Heat French Supermarket Fridges Up to 50°C by Hijacking Danfoss Controllers



