CrimeJun 30, 2022
What JSA’s Annual Report Tells Us About Jewelry Crime in 2021TechnologyJul 12, 2022
Graff’s Ransomware Payment Not an Unusual Move, Expert Says
The high-end jeweler reportedly paid a $7.5 million ransom to a group of hackers and is suing its insurance company to cover the loss.
London—Graff Diamonds reportedly paid a $7.5 million ransom in Bitcoin to the hackers responsible for a ransomware attack on its systems last fall, a decision that is not unusual for large companies today, one expert says.
Ransomware is malware that uses encryption to hold a victim’s system or personal data hostage, basically, and demands payment to get them back.
Following the attack on Graff, Conti, the group that took credit for it, leaked data about the brand’s clients, such as their names and, potentially, their home addresses.
Graff counts many high-end clients and celebrities as customers, and the data breach included leaked data about the royal families in Saudi Arabia, the United Arab Emirates, and Qatar, prompting Conti to issue an apology to the families involved, an unusual move for the group.
Conti threatened to leak more of Graff’s data if the ransom wasn’t paid.
Though it tried to avoid paying, the high-end jeweler eventually offered $7.5 million, half the original ransom amount, and Conti accepted, according to Bloomberg, which broke the story. The jeweler paid in Bitcoin.
Graff is also suing its insurance company, The Travelers Companies Inc., in a London court for the losses, arguing that its policy should cover the ransom payment.
“The criminals threatened targeted publication of our customers’ private purchases. We were determined to take all possible steps to protect their interests and so negotiated a payment that successfully neutralized that threat,” a Graff spokesperson told National Jeweler.
“Regrettably, these commercial decisions are all too common these days. Insurers know this, which is why we are extremely frustrated and disappointed by Travelers’ attempt to avoid settlement of this insured risk. They have left us with no option but to bring these recovery proceedings at the High Court.”
The Travelers Companies did not respond to a request for comment by press time.
Related stories will be right here …
Ransomware is malware that uses encryption to hold a victim’s system or personal data hostage, basically, and demands payment to get them back.
Following the attack on Graff, Conti, the group that took credit for it, leaked data about the brand’s clients, such as their names and, potentially, their home addresses.
Graff counts many high-end clients and celebrities as customers, and the data breach included leaked data about the royal families in Saudi Arabia, the United Arab Emirates, and Qatar, prompting Conti to issue an apology to the families involved, an unusual move for the group.
Conti threatened to leak more of Graff’s data if the ransom wasn’t paid.
Though it tried to avoid paying, the high-end jeweler eventually offered $7.5 million, half the original ransom amount, and Conti accepted, according to Bloomberg, which broke the story. The jeweler paid in Bitcoin.
Graff is also suing its insurance company, The Travelers Companies Inc., in a London court for the losses, arguing that its policy should cover the ransom payment.
“The criminals threatened targeted publication of our customers’ private purchases. We were determined to take all possible steps to protect their interests and so negotiated a payment that successfully neutralized that threat,” a Graff spokesperson told National Jeweler.
“Regrettably, these commercial decisions are all too common these days. Insurers know this, which is why we are extremely frustrated and disappointed by Travelers’ attempt to avoid settlement of this insured risk. They have left us with no option but to bring these recovery proceedings at the High Court.”
The Travelers Companies did not respond to a request for comment by press time.
Shayne Caffrey, marketing manager and cybersecurity awareness training lead for LeeShanok Network Solutions, echoed what Graff Diamonds said it its statement—ransom payouts like this are fairly common today.
“Deciding whether to pay the ransom is a cost/benefit analysis. It can make a lot of sense to pay up when you can’t safely restore from a backup,” he said in an email to National Jeweler.
Once a business does decide to pay, it becomes a negotiation, going back and forth on price like in any deal until it becomes worth it for both sides.
“In this case, the initial $15 million demand may not have been worth it, but $7.5 million was,” Caffrey said. “Hackers would rather get something than nothing. This calculated approach means ransoms get paid more often than any of us would like.”
He also noted there’s rarely a guarantee that hackers will unencrypt the data even once the ransom is paid.
Caffey offered businesses two recommendations to reduce the chances of becoming a victim of cybercrime.
The first is to require every employee to undergo cybersecurity awareness training annually, with a particular focus on phishing prevention.
According to IBM, 95 percent of breaches result from human error, and the only way to fix that is through education, he noted.
But rather than using the common online training modules, Caffrey suggested bringing in a cybersecurity expert to deliver a live training, either in-person or virtually.
“In my experience, those trainings are much stickier.”
The second tip is to create a strong Backup and Disaster Recovery (BCDR) Strategy.
“Implementing these strategies can seem expensive on the surface, but they are often a fraction of the cost of paying a ransom, or even paying increased insurance premiums after a breach,” Caffrey said.
“Plus, it feels a lot better to restore your environment to a pre-ransomware instance than to reward the hackers by paying a ransom.”
More tips businesses can use to protect themselves from the Jewelers Security Alliance can be found in National Jeweler’s original story reporting on the Graff attack.
Editors' Picks
Sponsored by
More on Technology
The Latest
ColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire BrandsWhy do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
AuctionsMay 15, 2024
Red Diamond Breaks Records at Phillips GenevaThe “Argyle Phoenix” sold for more than $4 million at the auction house’s second jewels sale.
Events & AwardsMay 15, 2024
See Who’s in JA’s 2024 ‘20 Under 40’ ClassThe annual list recognizes young professionals making an impact in jewelry retail.
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.Despite the rising prices, consumers continue to seek out the precious metal.
IndependentsMay 15, 2024
David Mann Jewelers in Upstate NY to Close After 35 YearsOwner David Mann is heading into retirement.
Weekly QuizMay 09, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
FinancialsMay 15, 2024
Brilliant Earth’s Sales Fall Flat in Q1 While overall sales were sluggish, the retailer said its non-bridal fine jewelry was a popular choice for Valentine’s Day.
SourcingMay 14, 2024
Anglo American Confirms It Is Looking to Sell De Beers The mining giant also wants to offload its platinum business as part of an overhaul designed to “unlock significant value.”
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
AuctionsMay 14, 2024
2 Huge Yellow Diamonds Are Heading to AuctionChristie's is selling one of the diamonds, moving forward with its Geneva jewelry auction despite the cyberattack that took down its website.
MajorsMay 14, 2024
Platinum Born Taps ‘Born Leaders’ for New CampaignThe ad aims to position platinum jewelry as ideal for everyday wear.
GradingMay 14, 2024
Instappraise Adds Trifold Brochure to Appraisal OfferingsRetailers can customize and print the appraisal brochures from their store.
Lab-GrownMay 13, 2024
Lab-Grown Diamond Brand Lightbox Cuts Prices by 25 to 40%The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
AuctionsMay 13, 2024
Madeleine Albright’s Jewelry, Pins a White-Glove Sale at Freeman’s | HindmanThe late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
IndependentsMay 13, 2024
Zachary’s Jewelers Names Mother’s Day Jewelry Contest WinnersThree fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
IndependentsMay 10, 2024
Frank Adams Jewelers Names New CEOKimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
CollectionsMay 10, 2024
Piece of the Week: Carina Hardy’s ‘Birth of Venus’ NecklaceAs a token of womanhood, this necklace depicts when Venus was born from the sea.
MajorsMay 09, 2024
Watches of Switzerland Pays $130M for Roberto Coin Inc.The deal gives the retailer control over the distribution of Roberto Coin jewelry in the U.S., Canada, Caribbean, and Central America.
TrendsMay 09, 2024
Amanda’s Style File: Shine Bright, Moms Show your mother some love with a piece of fine jewelry.
IndependentsMay 09, 2024
Kyle Edward Fine Jewelry to Close Salisbury StoreThe company’s Easton location will remain open.
MajorsMay 09, 2024
JBT Elects New ChairmanBrian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
Supplier BulletinMay 08, 2024
Fusing Past and Present at the Las Vegas Antique Jewelry & Watch ShowSponsored by the Las Vegas Antique Jewelry and Watch Show
EditorsMay 07, 2024
Q&A: Author Vikki Tobak on the ‘Ice-Cold’ ExhibitionTobak, author of “Ice Cold: A Hip-Hop Jewelry History,” shares how the exhibition came to be, and the pieces people may be surprised to see.
EditorsMay 07, 2024
10 On-Theme Looks from the 2024 Met GalaStars adorned themselves in emeralds, platinum, and myriad bird motifs, writes Associate Editor Natalie Francisco.
IndependentsMay 07, 2024
112-Year-Old New Orleans Business Popping Up in Aspen M.S. Rau is set to open a seasonal gallery in the high-end resort town early next month.
MajorsMay 07, 2024
Richemont Acquires Italian Jeweler VhernierThe branded jewelry market is thriving, said Richemont Chairman Johann Rupert.
CollectionsMay 07, 2024
These ‘Luminaries’ Are Set to Light Up CoutureThe six designers, all participants in the show’s Diversity Action Council mentorship program, will exhibit in Salon 634.
AuctionsMay 07, 2024
Sotheby’s to Auction Sylvester Stallone’s WatchesThe highlight of his collection is the coveted Patek Philippe Grandmaster Chime, which could sell for up to $5 million.
