Bitcoin Blackmail Follows Ashley Madison Data Hack

The release of Ashley Madison’s confidential data has put users at risk of blackmail threats. In at least one case, bitcoin was the blackmailer’s currency of choice.
The incident reveals the darker side of the digital currency, whose deregulation and anonymity make it appealing to criminals.

Ashley Madison data release leaves users vulnerable

The Ashley Madison data release occurred last Tuesday — according to Wired, 9.7 gigabytes of information from the website, including user account and log-in details, as well as credit card information, were released to the public. This outpouring of data followed a massive cybersecurity attack in late July, during which a team of hackers calling themselves the Impact Team targeted the infidelity website. The release of this confidential information has placed the website’s users in a vulnerable position.

For Ashley Madison user Josh Duggar, a Christian reality TV start, the data dump ended in a very public revelation and confession. Other users, however, are still trying to maintain anonymity. CoinDesk reported that an Ashley Madison user whose name and address were revealed with the release of the company’s confidential data has received a blackmail threat. The blackmailer, operating under the name “Team GrayFlay,” threatened to reveal the user’s account to his or her significant other, should he or she refuse to pay the 2.00000054-bitcoin blackmail.
The blackmailer’s email states: “[i]f you are already divorced then I suggest you think about how this information may impact any ongoing court proceedings. If you are no longer in a committed relationship then think about how this will affect your social standing amongst family and friends.” It remains to be seen how many of Ashley Madison’s users will be targeted in blackmail attempts, but reports already suggest that other threats have been made.

The darker side of bitcoin

This is not the first time that bitcoin has been involved in a blackmail scandal. Last week, CoinDesk said that a bomber who placed explosive devices in three different Netherlands-based Jumbo supermarkets demanded a bitcoin ransom to stop the attacks. Prior to that, Coinbuzz stated that Hong Kong had been the target of distributed denial-of-service attacks affecting the Bank of China (HKEX:3988) and the Bank of East Asia (HKEX:0023). The perpetrator also demanded a bitcoin payment after threatening to continue the assaults.

As mentioned, these incidents reveal the darker side of the digital currency. Although many benefits come with bitcoin’s anonymous, decentralized and unregulated nature (take, for example, the enormous impact that it is having on remittance markets), there are also drawbacks. The Ashley Madison blackmail scandal reveals that, at the end of the day, bitcoin is a neutral holder of value. What it is used for depends entirely on the bitcoin community itself.