“We wait, because we know you.” Inside the ransomware negotiation economics.

Pepijn Hack, Cybersecurity Analyst, Fox-IT, part of NCC Group

Zong-Yu Wu, Threat Analyst, Fox-IT, part of NCC Group


Organizations worldwide continue to face waves of digital extortion in the form of targeted ransomware. Digital extortion is now classified as the most prominent form of cybercrime and the most devastating and pervasive threat to functioning IT environments. Currently, research on targeted ransomware activity primarily looks at how these attacks are carried out from a technical perspective. However, little research has focused on the economics behind digital extortions and digital extortion negotiation strategies using empirical methods. This research paper explores three main topics. First, can we explain how adversaries use economic models to maximize their profits? Second, what does this tell us about the position of the victim during the negotiation phase? And third, what strategies can ransomware victims leverage to even the playing field? To answer these questions, over seven hundred attacker-victim negotiations, between 2019 and 2020, were collected and bundled into a dataset. This dataset was subsequently analysed using both quantitative and qualitative methods. Analysis of the final ransom agreement reveals that adversaries already know how much victims will  end up paying, before the negotiations have even started. Each ransomware gang has created their own negotiation and pricing strategies meant to maximize their profits. We provide multiple (counter-)strategies which can be used by the victims to obtain a more favourable outcome. These strategies are developed from negotiation failures and successes derived from the cases we have analysed, and are accompanied by examples and quotes from actual conversations between ransomware gangs and their victims. When a ransomware attack hits a company, they find themselves in the middle of an unknown situation. One thing that makes those more manageable is to have as much information as possible. We aim to provide victims with some practical tips they can use when they find themselves in the middle of that crisis.


It is 1:30 on a Saturday morning. You just went to bed exhausted after a week of demanding work, but your phone is ringing, nudging you to wake up. It is your IT department on the line telling you to come to the office right now. Your company got hacked and all off the important data is encrypted, including the backup storage. The head of your IT department informs you it is a kind of virus called ransomware. After two long hours of phone calls, you have assembled a crisis management team and you open the ransom note. It  redirects you to a TOR website  where you can chat with the adversaries who hacked your company. Their demand is 3.5 million US dollars in cryptocurrency. You get a sinking feeling in your stomach. You have spent years building this company from the ground. You hired all employees yourself, and know every single one of them by name. You start to realise that the weekend you planned away with your wife and kids is going to have to be cancelled. You need to be there now for your company. For all the families of the people that work for you. You open the chat and start typing. But after telling them you need more time to even start thinking about making a payment, all they respond with is – “We wait.”

After the adversary encrypts and exfiltrates the selected data, he sets an initial ransom demand. If the victim decides to engage in negotiation, both sides will try to reach an agreement on the final amount. With this research we wanted to investigate the phenomenon of ransomware negotiations. How do adversaries set the price of their ransom demand? What could be the final price adversaries would accept? How does the difference in information about each other impact the negotiation process? What does this tell us about paying or not paying the ransom? If companies do end up paying, are there strategies that the companies can utilize to lower the ransom demand? 

We made use of both quantitative as well as qualitative research methods to answer these research questions. There have been some earlier reports and blog posts from security companies or news agencies on this topic. However, this research  is mainly based on empirical approaches. We have used our own data, gathered from more than seven hundred negotiations between threat actors and victims. Using this data, we provide information and practical tips to victims who need it the most.

There is a negative sentiment in our society towards paying or negotiating with criminals, and the legitimacy and ethics of it are also questionable to say the least. Nonetheless, we realise that a significant percentage of companies currently do end up paying the ransom demand. Our research demonstrates that the adversaries have a significant upper hand in the negotiation process They often know how much a victim would pay in the end, providing them a comfortable vantage point in the negotiations. We hope to achieve the following twofold goal with our research: firstly, we discourage the victims from engaging with the adversary. However, should there be no choice to negotiate, the second half of our paper provides tips on how to do so successfully.

The paper is structured in the following order. First, we start  with modelling how adversaries are able to use price discrimination to maximize their profit. Then, we use our data to support our hypothesis on the information asymmetry during negotiation. In the second part of the paper, we dig deeper into the negotiation process. We give some practical tips and look at strategies that can be used during the negotiation phase. In the final paragraphs we summarize our findings and look ahead to the future on how we should deal with ransomware not just as individuals but as a society.

The paper is structured in two parts. The first half starts with providing a short background in how ransomware as a service developed and its economy, and goes on modelling how adversaries are able to use price discrimination to maximize the profit. We transition into illustrating the information asymmetry between the victims of the ransomware attack and the attackers themselves using our datasets. The second half digs deeper into the negotiation process, and provides practical tips and strategies that can be used during the negotiation phase, should it prove to be unavoidable. In the final paragraphs, we summarize our findings and explore the future possibilities of how to deal with the phenomenon of ransomware, not only as individuals under attack, but as society as a whole.


The idea of the cryptovirology, using cryptography to write malicious software, was initially born out scientific curiosity within an academic research paper in 1996 [1]. After more than a decade, it was the actors behind GameOverZeus/ZeusP2P who brought the business into the wild under the name of CryptoLocker in 2013 [2]. CryptoLocker implemented the hybrid cryptographic system, which was the same as the cryptovirology, to encrypt personal files and demand a ransom for the key to decrypt them.  Consequently, the idea of abusing the cryptography, which was initially intended to provide privacy, has attracted attention from different cybercrime actors. For instances, in 2017, the WannaCry ransomware had the capability to be self-propagated using the EternalBlue exploit and aimed to infect every vulnerable computer on the internet [3]. SamSam ransomware occupied the news headlines as it was targeting health-care sectors in 2017 [4]. More recently, the arrival of Ransomware-as-a-Service (RaaS) provides different cybercrime actors an easy access to ready-to-use ransomware. Along with the popularity of cryptocurrency, it led to a surge of targeted ransomware attacks worldwide. The ecosystem has since been developed into a multiple-extortions attack. Sensitive data is located, exfiltrated and encrypted. Ransomware extortions nowadays not only impose a denial-of-service attack on the critical business resources, but also invade the privacy of their victims. Similarly, we have seen a rise in the ransom demands . Previously people had to pay a couple hundred dollars to get their holiday pictures back. Nowadays we see companies getting extorted for millions of dollars, many of which end up paying these prices.

Data Collection

In this research, we primarily focused on two different ransomware strains. The first dataset was collected in 2019. This was a period in time when targeted ransomware attacks were upcoming and only a handful of groups were engaged in this business model. At that time, the adversaries were relatively inexperienced and ransom demands were lower compared to today’s ransom amounts. The second dataset was collected in the late 2020s and through the first couple of months in 2021. At this time, ransomware attacks have become a major threat to companies worldwide. Not only has the maturity of the operation been improved, but there has also been an underground market shift to targeting big and profitable enterprises. The owners of the second ransomware strain specifically positioned themselves in the market to only target big and profitable enterprises. The first dataset consists of 681 negotiations, and the second dataset consists of 30 negotiations between the victim and the ransomware group. Due to the sensitive nature of our data, we cannot share further details as we have an obligation to protect our sources.

Ransomware Economics

As most adversaries have claimed, ransomware attacks are nothing but business. Ransomware groups try to achieve the highest possible profits. That is their primary motivation. In this section, we try to model the factors on how the adversaries make decision for profit making. The model is  somewhat rudimentary, but can be used to explain key factors which impact the decision making of the adversaries and as well as their victims.

Hernandez-Castro, et al. [5] explain their hypothesis in their paper “Economic Analysis of Ransomware” and used small scale surveys to get some preliminary results. Based on their model, which we have updated, our research goes beyond this and tests our hypothesis based on actual ransomware negotiation cases.

First and the most importantly, the total profit is not only influenced by the amount of ransom they demand from the victim. It also depends on  whether the victim decides to pay, and the costs of the operation. Instead of studying a single ransom gain, the total profit throughout a series of attacks should be taken into consideration. Take two examples, an organised cybercrime group which only hunts for big targets and asked for millions of dollars but only 5% of the victims paid. We compare this with another group which only asks for ten thousand dollars but 20% of the victims paid. Evidently, these two business strategies lead to different profit gains. Furthermore, the cost for operating a  criminal operation should be included in the calculation. We use the following formula to calculate the overall profit from adversary’s perspective. 

We describe P as the total profit taken by the criminal from N number of victims.

  •  ri is the final ransomware demand on case .
  •  li is the percentage left after exchanging the cryptocurrency to “clean” currencies. 
  •  mi is the percentage left after paying the commission fee for the RaaS platform. This fee depends on the rules of the RaaS platform and the total ransom. It could cost from 10 to 30 percentage of the . In some cases, this commission fee is 0 as some adversaries use in-house ransomware tool kits.
  • f (i) is the final decision made by the victim on to pay or not.  can either be 0 or 1, with 0 meaning the victim decided not to pay and 1 meaning the victim did pay. 
  • ci is the cost of carrying out the attack. The detailed explanation can be found in the following paragraph.

Using this formula, we can calculate the adversaries’ profit for N number of victims. Let us assume we have two victims. Therefore, , the ransom demand is $100,000 in bitcoin in both cases (ri) , the exchange cost is 10% (li = 90%), the RaaS fee is 20% (li = 80%) of the ransom. Only the second victim pays, and the cost of carrying out the attack is $50 (ci) . 

In the first case the profit is ($100,000 * 0.8 * 0.9) * 0 – $50 = -$50. In the second case the profit is ($100,000 * 0.8 * 0.9) * 1 – $50 = $71,950. The total profit of the ransom attack is $71,950 + (-$50) = $71,900.

In reality, each variable in the equation will be larger than the example we have used. However, as you can tell, when an adversary is able to find a sweet spot where profit can be maximized, it can be an incredibly profitable business. On the other hands, if less and less victims decide to pay or the ransom paid was less than the adversaries had expected, it becomes a challenge to keep their business running.

The variables affecting the cost of carrying out the attack (ci) can include:

  • Risk cost: These are the costs of avoiding being held accountable. It might include setting up proxies, hiding human factor evidence and even bribing local authorities.
  • Penetration cost: It is the cost of accessing the targets’ network. It might include, for example, hiring skilled hackers, buying access to malwares/exploits/distribution services and any other form of illegal access into the targets’ network. If the adversary uses a home brew crypto locker, the cost should be included as well

As for the f (i), it is a function which models the decision of paying ransomware or not. Even though in the end it is a binary decision, being either a yes or a no, the major variables affecting this decision can include:

  • Ethics: There are certain companies who do not cooperate with the adversary whatsoever.
  • ri : The ransom amount strongly impacts the decision whether or not to pay.
  • Remediation cost:  These are the cost of restoring backups, restarting any services, and compensating affected customers.
  • Regulation cost: These are the estimated cost of paying the fine for the data breach (like GDPR-fines).

Maximise the Profit – Finding Pricing Strategy from the Final Ransom Deal.

In the earlier years, groups behind ransomware strains used a uniform pricing strategy, which meant they asked a fixed price after each infection. For example, CryptoLocker demanded a payment of 400 USD or EUR per victim. However, the ecosystem has evolved into multiple extortions with each their own different price discrimination approach. There are three types of classic price discriminations [6]. First-degree Price Discrimination (Personalized Pricing), it is a perfect price discrimination where each consumer gets charged a different price based on their own willingness and ability to pay. Second-degree is, for example, when the buyer gets a discount for bulk purchases. Third-degree Price Discrimination happens when the price depends on personal traits of the consumer such as age, gender etc. In the case of a ransomware attack this could be the size of the company or the number of servers encrypted.

We have seen different actors adapting second and third degree of price discriminations on ransom pricing. A Chinese cybercrime group was asking for a relatively high initial price for decrypting less than 10 locked computers, and the price gliding down a slope after a bulk number of decryptor was sold. This is an example of second-degree of price discrimination.

Table 1. The price table provided by the Chinese actors behind a ransomware attack.

On the other hand, based on our data, two groups we looked at were a part of multiple extortion ransomware gangs. They were both using third-degree price discrimination. In our dataset D-first, 17% (N = 116) of the 681 victims group proceeded to pay the ransom, with an average amount of $400,767.05 per victim. Within the total of 116 victims who  paid, the revenue of 32 companies was known by us.

In the above example, the initial ransom price was set according to multiple variables. Finding out how the initial price is set and what it represents is important. However, this is beyond the scope of our research because it is rather difficult to get access to these decision-making processes only residing within a criminal organisation. Thus, we focused on studying only the final ransom deal, which may tell a more accurate story on how the hidden price, or maybe a baseline, is set.

A negotiation starts with an adversary demanding an initial ransom. Then, the victim has the option to ask for a lower price, or what adversaries call a ‘discount’. Both sides offer their ideal price back-and-forth. Intuitively, one would assume that the adversary did not know how much a victim was willing to pay. However, we used a metric: Ransom per annual Revenue (in Million USD)  to demonstrate that the result could  differ from  what our intuition is telling us / what is initially assumed. This ratio tells us how much the victim paid per every million dollars in revenue. To calculate the RoR (Ransom per annual Revenue), we divided the ransomware demand by the annual revenue a company made in the last year before they got attacked.

Table 2. The Revenue, ransom and RoR calculated.
Figure 1. The box plot of RoR on all of the data in first dataset.

Interestingly, most of the final negotiated ransom prices fell into a certain margin, but there are also some outliers. We can further divide the victim companies into two categories based on their estimated revenue. D-first-small and D-first-mid represent small (revenue < 100 million USD per year) and medium size (revenue >= 100 million USD per year) companies, respectively.

Data SetRevenueNumberQuartileMediumThird Quartile
D-first-mid>= 100 million $101,0002,2003,900
D-first-small< 100 million $213,20010,55013,700
Figure 2. The box plot of RoR on the first dataset with two revenue groups separated. The left plot shows the victims who have more than 100 million in annual revenue and the right-hand side plot shows the victims who earned less than 100 million in annual revenue in the year before the company got compromised.

The results show that the adversaries operating behind the dataset we collected knew how much ransom a victim is willing to pay before the negotiation had started.

Another interesting observation is that smaller companies generally pay more from a RoR point of view. In other words, a smaller company pays less in absolute amount but higher in percentage of their revenue. This observation still follows in the second dataset.

Ransom PaidEstimated Revenue (in Million USD)RoR
Table 3. The RoR calculation on the second data set.

The highest amount of ransom payment within the data set was 14 million. This was one case from the second dataset where the ransom was paid by a Fortune 500 company was found to be only $822 per every million in revenue, or 0.00822% of the annual revenue. The medium ransom of the small enterprises of the first dataset was found to be 0.22%.

The duration of participating in criminal activities affects the Risk Cost significantly. It is therefore understandable that a financially motivated actor could cherry pick valuable targets and profit from just a few big ransoms instead of attacking small companies. This situation leads to a few ransomware groups indeed deciding to only target big and profitable enterprises. In the second dataset (D-second), around 14% (N = 15) of 105 victims paid, with an average amount of $ 2,392,661 per victim. The owners of this second RaaS platform received less commission if the actor receives a higher amount of ransom. Therefore, there is an incentive for actors using the second RaaS platform to target high profile companies.

Maximise the Profit – Discussion

We realise that there are limitations on doing this research. We cannot say for certain that the identified victims set is representative for the entire population. Furthermore, based on our qualitative research we know that ransomware groups also use other factors to determine the price, such as the number of computers and servers that are encrypted, the number of employees or the expected amount of media exposure a company will receive if people find out they got compromised. Unfortunately, these factors are not all open-source and are therefore more difficult to compare. Although our dataset shows that the final ransom price has a correlation with the victim’s revenue, it cannot fully explain how adversaries set the ransom demands.

Despite these limitations, our findings suggests that adversaries have already adopted some price discrimination strategies. It is obvious that the attackers are optimizing their profit by trial and error in real infection cases. In addition, we have observed that some adversaries steal sensitive data and broadly look at financial statements from their victims. However, this pricing strategy, which is influenced by both successful negotiations and no deal situations, is unknown to the victims. Normally, in a negotiation, each player holds their cards in their own hands. The ransomware actor knows the cost of their business and how much they need to make to break even. Meanwhile, the victim makes an estimation of the remediation cost. The ransom price is the place where the two counterparts meet in the middle. In the cybercrime world, however, this is not the case. The victim is asked to play the game for the first time whereas the adversary has played many games to decide an optimal strategy. Furthermore, in sharp contrast to normal negotiations, the adversary can investigate the opponents’ cards if he chooses to do so. This results in a situation of a compromised victim trying to negotiate with an adversary that  runs an unfair negotiation game which guides the victim into a pre-set but reasonable ransom range without the victim’s knowledge. It is a rigged game. If the adversary plays well, he will always win. This conclusion ultimately contributes to a rampant ransomware ecosystem.

Do we negotiate with criminals?

Even though we have painted a bleak picture in our previous analysis, not all hope is lost. Despite their best efforts, the adversaries attacking companies are also just humans, and humans make mistakes or  can be influenced into making certain decisions. In the next two sections we will try to explain what options are left when the decision to negotiate is made .

Process-based tips before the negotiation starts

Although the focus of our research was the negotiation phase of a ransomware attack, we also wanted to provide some guidelines and tips on what to do before the negotiations start. We will not go into all things related to crisis management strategies, as there already is an abundance of trainings and information on the topic provided online and in print . We will, however, touch upon some topics that we feel are not always covered in other sources which we learned from reading the negotiations between ransomware groups and victims.

1.    Preparing employees

The first thing any company should teach their employees is not to open the ransom note and click on the link inside it. In the D-second database, and we have seen this at other adversaries as well, the timer starts to count when you click on the link. You can give yourself some valuable time by not doing this. Use this time to assess the impact of the ransomware infection. Address this in a structured manner by asking the following questions: Which parts of your infrastructure are hit? What kind of consequences does this have for your day-to-day operation? How much money are we talking about? This will allow you to retake a degree of control over the situation by mapping the future strategy better. 

2.    Think about your goals

Secondly, before you start negotiating, you should discuss your goal. What is it that you want to achieve? Is your technical department (perhaps with some outside help) able to restore the backups and do you need to extend the timer, or are you going for a lower ransom? It is also important to decide what ransom demand would be your best- and worst-case scenarios. You will only learn the actual demand when you click on the link, but you should at least make an estimation of what you could pay before you open a conversation with the adversary. 

3.    Communication lines

Another important thing to think about is to set up internal and external communication lines. Who is going to be responsible for what? A ransomware attack is not just an IT issue. Involve your crisis management team and you board to answer strategic questions. Involve legal counsel who can help answering the questions about possible cyber insurance coverage, and will know about rules and regulations regarding any institutions that need to be informed about data breaches. Also do not forget your communications department. It is getting more common for adversaries to inform the media that they have hacked a company. This is done to put extra stress and pressure on the company’s decision making. Realising this beforehand and having a media strategy prepared will help taking control of the situation, and mitigate possible damages.

4.    Inform yourself

Lastly, we advise to get informed about your attacker. Do some research yourself about their capabilities or hire a specialised company with a threat intelligence department. They can tell you more about the peculiarities of the adversary you are dealing with. Perhaps they have a decryptor which is not available online or know of another company who might be of help. They can also tell you more about the reliability of the adversary you are dealing with. Furthermore, knowing if you should expect a DDOS attack, calls to your customers, or the leakage of information to the press will be useful information to incorporate into your crisis management strategy.

Negotiation strategies

If the decision to pay the ransom is made , there are still ways to lessen the damage. Based the analysis of more than 700 cases we can give the following advice. Note that using just one of these strategies in your negotiation will not help as much but trying to implement as many of these as possible could save companies millions of dollars.

1.    Be respectful

This first tip might sound obvious, but crises can be emotional rollercoasters. Owners of companies can see their lives work vanish in front of their eyes, like seeing your house burn to the ground. We have seen multiple examples of companies getting frustrated and angry in conversations with threat actors resulting in chats being closed. Look at the ransomware crisis as a business transaction. Hire outside help if needed but stay professional. From the study of D-first database we learned that there is a negative relation between being kind and the amount of ransom paid in the end. One example of someone who went above and beyond during a negotiation is the following. This person managed to talk the ransom down from 4 million to 1.5 million dollars.

“Thanks Sir. We can pay 750,000 USD in XMR, provided that you will share with me the exact scope, volume, and significance of data that is in your possession. (…) I do stress the data, rather than the decryption key, since I learned about your very positive reputation in providing decryption keys. Looking forward hearing your thoughts. Respectfully, {victim’s name}.”

This example shows that not only should you see the negotiation as a business transaction, but it is also best to leave your emotions outside of the conversation.

2.    Do not be afraid to ask for more time.

Adversary will usually try to pressure you into making quick decisions. This is often done by threatening to leak documents after a certain amount of time or by threatening to double the ransom. The more stress the adversary can impose on you, the worse your decision making will be. However, in almost all D-second cases the adversary was willing to extend the timer when negotiations were still ongoing. This can be helpful for several reasons. In the beginning of the process, you will need time to assess the situation and rule out any possibilities of restoring your data. Similarly, it can give you extra time to produce different strategies. If you decide to pay in the end, you will need to make arrangements to acquire the right cryptocurrency.

Figure 3. A screenshot of a notification showing the ransom demand has been doubled because the timer has run out.

We have seen examples of cases in which the negotiation went on multiple weeks after the deadline. In this case the deadline was already over for two days:

Hello, I’m going to be as up front and honest as I can be right now and let you know that we have not been able to secure the 12 million dollars and we also have just now been able to download the data that you took so that we can review it. If at all possible, we need some more time to get together what we can get together to, at the very least, make a reasonable offer. Coming up with the 12 million is almost impossible but if it doubles, there’s no way we will be able to come up with the money. Just a few more days and we should be in a position to give you a realistic and reasonable offer. Any help would be greatly appreciated!

After being asked how much time they needed, the victim responded that they would need at least another week. The adversary agreed with this if they guaranteed a payment of 1 million within 24 hours otherwise the price would be doubled to 24 million. The victim responded to this by saying:

“I understand that and trust me, we are really trying here. This is exactly why I asked for more time. We have been working all night to gather just the funds to buy more time and we aren’t there. 1 million isn’t going to be possible right now 12 million is definitely going to take more time than 1 million and 24 million just isn’t possible at all really. This is the situation we are in right now. All we’ve asked for is more time and you are going to pass up on a potentially big payday over just giving us a few more days? How much effort would it take on your part just to give us a little more time? You’ve already taken our data and crippled our business. What more effort do you have to put forth to just work with us and give us a few more days. I’ve told you multiple times that we are trying like hell to get this money together from the moment you locked us down. Give us the time and we’ll get whatever we can get together and we’ll continue to communicate with you or don’t give us the time and get nothing. We’ll recover from this or we won’t and you will have put a bunch of people out of work that have been here for their entire careers. This is our livelihoods, this is how we feed our families, this is how we pay our bills. Please try and keep that in mind.

In the end they ended up paying 1.5 million dollars in cryptocurrency. Another way  to get more time is by explaining that higher-ups need more time to make decisions, or that you need more time to buy crypto:

“Not to mention it’s the weekend here and the banks or crypto buying sites aren’t open to get anything converted. Your timer runs out tomorrow. Just give us a few more days. We are trying here but we need a little help from you.”

3.    Promise to pay a small amount now or a larger amount later.

Whereas stalling for time can be an effective strategy if you want to prevent your data getting leaked while rebuilding your systems,  the following strategy can help  negotiating to settle on a smaller amount. Adversaries also have an incentive to close a deal quickly and move on to their next target. In multiple cases we have seen that the adversary in the D-second database gave large discounts when presented the option of getting a small amount of money now instead of a large amount of money later. In one case the adversary said the following after an initial demand of 1 million US dollars:

“I spoke to my boss and explained your situation to him. He approved a payment of 350k dollars. There will be no more discounts. Now you are offering 300k dollars, raise your price by 50k and we will close this deal now.”

4.    Convince the adversary you cannot pay the high ransom amount.

One of the most effective strategies is to convince the adversary your financial position does not let you pay the ransom amount that is initially asked. In one example a company was asked to pay 2 million and responded the following:

“We have discussed this with our management team. We do want the decryptor for our network and for our data to be deleted, but you have asked for a lot of money especially at the end of a difficult year. Can you offer us a lower price?

They got a 50K discount and ended up paying 1.95 million. Although this seems like a good deal, there are cases in which much less has been paid after a more drawn-out negotiation in which the victim was not as willing to pay. Two examples of this are two companies who both had to pay 1 million, but one ended up paying 350K and the other only 150K. There is also an example of a victim who talked down the price from 12 million to 1.5 million.

These companies achieved this by constantly stressing they could not pay the amount that was asked. One example of this is:

“Our overall revenue has suffered significant impacts in the past year and we are still losing more and more money by the day. Your demand of 12 million dollars is a large portion of our entire revenue for all of last year. You may not know anything about us as a company but we provide a vital service for our clients and this incident has affected not only our business but also many many people and other businesses that rely on us and our services. With all of that being said, we are still willing to pay something to get our data unlocked and not have our client’s information out on the internet for everyone to see. What we can offer you is 1,000,000 USD in bitcoin today to be done with this”.

Later they said:

“(…) With that being said, this payment is out of our own pockets and the million dollars is what we had. We’ve been in discussions all day with our team and we are willing to up our offer to 1,200,000 USD. Work with us here, we are paying for this out of pocket.”

“We’ve looked everywhere and tapped every resource we can tap and taken out every loan we can take out and we’ve been able to come up with another 150k to bring our offer to 1,350,000 USD.”

“We are doing the absolute best we can. With that being said, the owner of the company has agreed to take 50k out of his own pocket to further increase our offer to 1,400,000 USD. That is a hell of a lot of money for anyone and especially us. This is not only affecting our company, it’s affecting PEOPLE real, honest, and hard working people. Basically where we are at right now is that you can take this 1.4 million dollars to make sure that our data doesn’t get released or release the data and it’s worthless from a payment standpoint. There will be no reason at all for us to pay for anything to you once that’s done. We’ll focus our efforts on rebuilding our reputation and rebuilding our business. Please think about the two options here. Thank you for your consideration.”

After this the adversary agreed to the amount of 1.5 million which the victim ended up paying.

Now you might ask yourself, I understand this technique might work for companies who do not have that much money, but what about bigger companies with an obviously larger budget at their disposal? Does the adversary not have access to the financial statements of companies when they get hacked? One of the D-second victims was a Fortune 500 company who got this as a response from the adversary when telling them that they could only pay 2.25 million at max:

“Thank you for your offer but we have a counteroffer. Let me do some pretty important points. The first you are one of Fortune 500 companies with a revenue 16-18 billion, am I right? You produce kind of very important product right now (…) and because online business is booming right now. Back to the numbers we had encrypted 5,000-6,000 of your servers (…). So, if we do same VERY simple calculation. Your expenditures like, let say I don’t know $50 per hour or may me you are even more generous like $65? So, 24 hours spent to restore one server multiply per one encrypted by us server, this is like 10 million dollars in expenditure only on a labour, but don’t forget you spent all this time for installation and OOPS you can’t even restore any data because this is gone for next 1000 year of intensive calculations. The timer it ticking and in in next 8 hours your price tag will go up to 60 million. So, you this are your options first take our generous offer and pay to us $28,750 million US or invest some monies in quantum computing to expedite a decryption process.”

As you can see the adversary is not very willing to compromise. However, it seems they did not do a deep dive into the financial records of this company. They primarily talk about the servers they hacked. We speculate this might be because the ability to hack companies, and the ability to read and dissect complex financial statements might not have as much overlap. Even if they have access to those files, there is a difference between having a certain amount of revenue and having a couple million dollars in crypto laying around just for the occasion. In this example the company ended up paying 14.4 million instead of the 28.75 million which was asked initially.

5.    If possible, do not tell anyone you have cyber insurance

Our last negotiation strategy is that you must not mention to the adversary you have cyber insurance and preferably also do not save any documents related to it on any reachable servers. These are two examples of messages from chats in which the adversary knew the victim had insurance:

“Yes, we can prove you can pay 3M. Contact your insurance company, you paid them money at the beginning of the year and this is their problem. You have protection against cyber extortion. (…) I know that you are now in trouble with profit. We would never ask for such an amount if you did not have insurance.”

“Look, we know about your cyber insurance. Let’s save a lot of time together? You will now offer 3M, and we will agree. I want you to understand, we will not give you a discount below the amount of your insurance. Never. If you want to resolve this situation now, this is a real chance.”

Although a company could still tell the adversary that the insurance company is not willing to pay, this limits the options for any negotiation severely.

Some practical tips during the negotiation

Besides the process-based strategies before and during the negotiation, we also wanted to give a few tips that should be done regardless of your strategy:

  1. The first thing any company should do is try to set up a different means of communication with the adversary and if they do not want to switch, they should realise their communication is not private. Getting access to these chats is not the most demanding thing for technically skilled people. It happened multiple times that during a negotiation a chat got infiltrated by third parties who started interfering and disturbing the negotiation.
  2. Always asks for a test file to be decrypted. Although most infamous adversaries have a decent reputation nowadays, you can never be too sure.
  3. Make sure to ask for a proof of deletion of the files if you ended up paying. There are examples of companies who paid, but their files are still openly accessible online.
  4. Always prepare for a situation in which your files will still be leaked or sold. Despite what the adversaries may show you, you have absolutely no guarantee that your files got deleted. Especially with RAAS platforms your system access and files will have gone through many different parties before they reached the final adversary you were negotiating with. Even if they properly deleted your files, who’s to say any of the other people in the chain did not quickly make a copy of some interesting files for ‘personal usage’.
  5. Ask for an explanation of how the adversary hacked you. In one case a company received an extensive report from the adversary on how they got access and what the company should do to close any vulnerabilities.

Chat conversation between a victim and D-Second adversary

In this example we see the use of multiple negotiation strategies. The victim asks for more time, and successfully talks down the ransom demand from 13 million to 500K.

“Hello. Can we please get some sample files you took from us? Thank you”
     “Hello. we took all files by our filters , round- about 2 TB. What proofs you want see? We will send proofs in 12 hours round about. 100 screenshots from infrastructure and evidence pack of data.”

“Thank you. Would it be possible to also receive a list of files? Thank you”

     “Full file tree will be only able in 1-2 working days, quantity of data is so high. Proof pack of files we already started to prepare. Very soon will be sent. Here you are proof pack of your data, we are interested in to continue dialog with CEO, CFO. We are not interested in to talk with system administrators. Don’t worry we done full dump, files from your network by our smart filters.”

“Hello. Thank you for the sample files. When can we get a file tree?”

     “Full file tree will be able after successful deal. In other case files will go to public   mass media. Proof package where provided already with some samples of documents and screenshot as well. Article able public for all, in 2 days we will start publicate data.”

“We thought we have almost 6 days left. Our leadership is currently reviewing the situation and determining the best resolution.”

     “Until we waiting for your reply on situation. We stopped DDoS attack to your domain, you can switch on your website. As well your blog, where hidden. Nobody will see information about that, until we will not get in deal. We stopped already other instruments which already where processed today.”

“Okay, thank you. We want to cooperate with you. We just need some time during this difficult situation.”

“Hello. We would like to know how you came up with this price for us. It is very high.”

     “Hello. We work on mathematical algorithms for each client price is different depending on their financial situation, sphere of activity and other aspects. In your situation price comes like is it. What price is not so high for you, then we have question.”

“Our industry has been suffering in revenue over the last couple of years and we don't make enough to pay even close to that much. Can you suggest a much lower amount that would satisfy you?”

     “We have been asked before, we doesn’t get answer - on our question - What price is not so high for you ???”

“Can you please tell us what we will receive once payment is made?”

     “You will get: 1) full decrypt of your systems and files 2) full file tree 3) we will delete files witch we taken from you 4) audit of your network

“This situation is very difficult for us and we are worried we may get attacked again or pay and you will still post our data. What assurances or proof of file deletion can you give us?”

     “We have reputation and word, we worry about our reputation as well. After successful deal you will get: 1) full file trees of your files 2) after you will confirm we will delete all information and send you as proof video, we are not interested in to give to someone other your own data. We never work like that.”

“Okay, thank you. We are going to have some meetings this weekend with our leadership. We need to assess our available funding and we can get back to you after that with what we can pay. Thank you for your patience.”

     “We wait”

“These leadership meetings are going to take this weekend to complete. It may take until Monday to come up with what we might be able to pay.”


“Hello. We would like to know if you would accept our offer of $300k? Our revenue has been severely impacted as the industry has suffered over the last few years, and we can not pay even close to the amount you have asked. We only hope you can understand our situation. Thank you.”

     “Hello. Thank you for offer, sorry but we can't gave you so big discount. We know that all businesses are impacted by Covid-19, and financial crisis , etc. for Us the situation same. We have different questions to you 1) Your reputation costs 300 000 USD? And customer trust. 2) Costs for lawsuits with GDPR as well will cost nothing? 3) How about investors they already know about the situation? We always go forward to our clients. The legal losses will be much greater on today. In case of successful deal think about better offer, and come back. Time is settled and we will continue our procedures if you don’t take situation serious.”

“We of course understand the severity of the situation and have considered all of these issues, however we are offering what we have available. We are a very small company and do not have much revenue and we are offering what we can. We can try to come up with a little more, but it is not so much. We hope you can work with us as we try to satisfy the needs for both of us. Thank you.”

     “What’s the offer?”

“We will get back to you shortly with a revised offer. Thank you”

“Hello. We would like to know if you would accept $350k? This is a significant amount of money for us at this time. Thank you.”

     “We will never accept such ridiculous amount, make it x10 higher and we will think.”

“Thank you for your patience. Unfortunately the amount you are asking for is not something we are able to provide. We are a small company and do not have the revenue, and our insurance is not enough to help with this. We are able to increase our offer to $425k. Please let us know if you are willing to work with us in this. Thank you.”

     “I said you, you must make your offer x10 higher. If you continue to make your ridiculous steps, we will ignore you.”

     “And don't forget, you have the last 21 hours before price will be doubled and all discounts will be impossible, and sure, post with you sensitive data will be published.”

“Hello. We thank you again for your patience. We are asking for you to take into account the difficult position we are in. We do not have the cash funds available or insurance to pay the amount you are seeking. We are not even able to borrow the money right now. We are only able to offer you a little more money right now and this is the most we can do. We can only pay up to $500k. This is our final offer and are prepared for what will happen if you do not accept. If you accept we will arrange for the payment. Thank you for your consideration.”

     “O.K. Your price is changed to 500 000 USD (in XMR Monero). We are ready for compromise.”

“Okay, thank you very much. Please add some time back to the timer so we can arrange for the funds to be sent. We will start the process right away.”

     “We wait”

“Can you show us proof of ability to decrypt our files?”

     “Of course. Send one file we will decrypt and send it back”

“Hello. We are getting close to finalizing making the payment. We will notify you when it is coming, but we would like to conduct a test transaction first. Please confirm you will provide the following when payment is made: 1) Decryption tool 2) File tree 3) Can you provide a link so we can download all of our files in case there is a problem decrypting them? 4) Proof of file deletion after we download all of the files.”

     “1) decrypt tool you I will get instantly 2) file tree will start make after payment 3) all your files if will be needed we will share by link 4) and video of course. Write after sending money.”

“Great, thank you. Will 2250 xmr be okay? That was the amount we purchased because of the amount shown this morning. Now it shows more. We bought 2250.”


“We are preparing to send a test transaction. Once we confirmed it works we will send the remaining amount. To confirm above mentioned, we will definitely want a link to download the files. Thank you.”

     “Link for downloaded files will take time round - about 1 working day. It`s not so easy how you think. We should prepare it for, you in case if you don`t need full file tree.”

“Okay, thank you”

     “Also, we see your payment. You have to send the rest.”

“Okay we will send the rest now”

     “We can see your payment, after 10 confirmations we will do all that was promised.”

“Thank you”


This empirical research suggests that the ecosystem of ransomware has been developed into a sophisticated business. Each ransomware gang has created their own negotiation and pricing strategies meant to maximize their profit. There is a number of well-executed studies focusing on fighting against the (cyber-)criminal and how the adversaries penetrate given targets. However, despite the economics behind this ecosystem being its essential driver, it has oftentimes been overlooked. We concluded that there are clear signs that adversaries have adopted price discrimination techniques based on the yearly revenue of their victims. If we look at the price setting and negotiation from the adversaries’ point of view, we see that they wield a massive advantage over their victims. Not only do they have the luxury of investigating their victims’ financial statements if they choose to do so, but they also have the advantage of having previous experiences they can use. This conclusion can explain the current rise in ransomware infections around the world. Luckily, there are some strategies victims can use to diminish some of the advantages the adversary has which we have covered extensively in the previous chapters.

Looking forward to the future of ransomware, it is no longer the question of whether a company is going to get breached, but rather a question of when. We have even heard people go as far as to say that it is almost an insult if your company does not get attacked nowadays, becoming a business badge of honour of sorts. Similarly, we also see that as more and more companies are becoming a ransomware victim, people are simply becoming tired of hearing it. If the increase in ransom demands stays, and the decrease in public backlash continues, we could see a shift to companies paying less often which would overall be better for society. On the other hand, this could also lead to criminals becoming more aggressive in their persuasion tactics, or lowering their ransom amounts to an equilibrium.

A bit of hope comes from some recent successes from law enforcement agencies. In november 2021 Romanian authorities arrested multiple individuals suspected of deploying the REvil ransomware on victims’ systems as part of operation GoldDust. This operation included authorities from 17 countries which joined efforts with Europol, Eurojust and Interpol. Similarly, in october 2021, another police cooperation between eight countries led to the arrest of twelve suspects that allegedly were part of a worldwide ransomware network. During this investigation multiple companies could be warned that ransomware was about to be deployed on their systems preventing millions of dollars of damages. These cases are perfect examples of a way in which we can find a way to tackle this wicked problem These ransomware groups make victims in multiple countries and do not care about borders. So the only way to fight this is with coordinated international cooperation between police agencies around the world.

We hope that by sharing this research to the public we can add some fuel for the defending side. We demonstrated how powerful the adversaries are during the negotiation, and, most importantly, have created a safety net for the unlucky victims who have fallen.Let us look back at the hypothetical case we opened with. “We wait”, that was their reply after you told them you needed more time. After the entire investigation is over and all the systems have been restored, it became clear to you that they were not in a hurry. They had been in the company’s systems for three weeks prior to rolling out the ransomware. They had access to all your internal documents, including all finance related statements. They knew everything about you, and you knew very little about them. They waited because they knew you would pay in the end. But how much did you end up paying? The full 3.5 million, or less? Or did you not end up paying at all. The end of this story will not be told by us, but by the countless cases that will continue to happen in the future. We just hope that the information we provided will help in making the right decisions for your situation.


We would like to express our special thanks to Nikki van der Steuijt, and all the members of Fox-IT threat intelligence team.


[1] Adam Young and Moti Yung, Cryptovirology: Extortion-Based Security Threats and Countermeasures, IEEE Security and Privacy, May 1996

[2] Michael Sandee, CryptoLocker ransomware intelligence report, https://blog.fox-it.com/2014/08/06/cryptolocker-ransomware-intelligence-report/, August 6, 2014

[3] Maarten van Dantzig, FAQ on the WanaCry ransomware outbreak, https://www.fox-it.com/en/news/blog/faq-on-the-wanacry-ransomware-outbreak/

[4]SOPHOS, SamSam: The (Almost) Six Million Dollar Ransomware, https://www.sophos.com/en-us/medialibrary/PDFs/technical-papers/SamSam-The-Almost-Six-Million-Dollar-Ransomware.pdf

[5] Hernandez-Castro, Julio and Cartwright, Edward and Stepanova, Anna, Economic Analysis of Ransomware (March 20, 2017). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2937641

[6] A. C. Pigou, The Economics of Welfare, Macmillan and Co., Limited St. Martin’s Street, London, 1920

Call us before you need us.

Our experts will help you.

Get in touch
%d bloggers like this: