In early June, Kadokawa's video-sharing platform Niconico experienced a server outage, which has now been claimed by the Russia-linked hacker group BlackSuit. This group, a rebrand of the Royal ransomware operation and linked to the defunct Conti cybercrime syndicate, has issued a threat on the dark web to release 1.5 terabytes of sensitive data, including signed documents, contracts, legal statements, and emails, unless a ransom is paid by July 1, 2024.
Details of the Attack on Kadokawa:
Kadokawa first acknowledged the cyberattack in early June, which disrupted multiple websites and services. Despite efforts by Kadokawa's IT department, BlackSuit reportedly managed to steal 1.5 terabytes of sensitive data, including business plans, user data, contracts, and financial records. The hackers exploited vulnerabilities in Kadokawa’s network, gaining access to a control center that allowed them to encrypt the entire network, affecting subsidiaries like Dwango and NicoNico.
Kadokawa has assured customers that no credit card information was compromised, as it was not stored on their system.
The company is prioritizing the restoration of accounting functions and normalizing manufacturing and distribution in its publication business, with expected results by early July. Although the production of new publications remains steady, the shipment of existing publications is currently at one-third of normal levels. Kadokawa is implementing alternative arrangements, including increasing human resources, to mitigate the impact.
In the Web Services business, all Niconico family services are still suspended, but provisional services like Niconico Video (Re: tmp) and Niconico Live Streaming (Re: tmp) have been provided. Existing services such as Niconico Manga smartphone version and NicoFT have resumed. The Merchandise business has seen limited impact, with shipping functions operating normally. However, the failure of Kadokawa’s account authentication function has prevented users from logging into certain online shops. Temporary pages have been created for affected users, and Kadokawa will keep providing updates regarding this issue.
Impact on CDK Global:
BlackSuit is also believed to be behind ongoing outages at CDK Global, a software provider for approximately 15,000 North American car dealerships. Several major U.S. auto dealers, including AutoNation, Group 1 Automotive, Penske Automotive Group, Sonic Automotive, and Lithia Motors, have reported disruptions in their services due to the cyberattack. As a result, many dealerships have had to revert to pen and paper for managing auto repairs, closing new car sales, and conducting other business.
CDK attempted to restore its systems but was hit with a second cyberattack, causing them to shut down all systems again. The company has yet to acknowledge that the attack is a result of ransomware, but an incident like this could take weeks to recover from. Even after operations return to normal, CDK will have to investigate what data was stolen, how the attack happened, and the impact on its customers.
Allan Liska, a ransomware analyst at Recorded Future, mentioned that the CDK attack has been attributed to BlackSuit in hacker forums and private chat channels. Malicious cybercriminal gangs are known to boast about their schemes on these platforms. While CDK is not yet listed on BlackSuit's dark web site, indicating ongoing negotiations, Bloomberg reported that the hackers are asking for a ransom in the tens of millions of dollars.
