Ransomware attack hits cloud hosting provider Netgain

Cloud hosting and information technology provider Netgain Technology Inc. was hit by a ransomware attack that forced the company to take some of its data centers offline.

According to Bleeping Computer on Wednesday, the ransomware attack was first reported by Netgain to its customers on November 24. A December 4 email warned customers of “system crashes or slowdowns” of an ongoing cyber attack targeting the hosting provider. Another December 5 email to customers said Netgain had been forced to shut down some of its data centers to isolate and contain the ransomware attack.

The company has not commented publicly on the reports, neither on its website nor on social media. A Netgain customer, Crystal Practice Management, emailed their customers on Wednesday saying they had had a briefing with the hosting provider. It has been said that thousands of Netgain servers have been affected by the ransomware attack and the company is working tirelessly to bring the servers back online.

The exact number of affected customers is unknown. Netgain provides cloud and IT hosting services to the healthcare industry and financial service providers. The Crystal Practice Management website remains offline.

Given that ransomware attacks in 2020 increasingly involved data theft, it’s surprising that the company has yet to publicly disclose the attack itself. At the very least, it will likely have customers in California and be bound by the California Consumer Privacy Act, and if it has customers in Europe, the European Union’s General Data Protection Regulation kicks in.

“The ransomware attack on Netgain highlights the devastating impact that a ransomware attack can have, not only on the victim, but also on their customers.” Sanjay Jagad, senior director of products and solutions at enterprise data storage company Cloudian Inc., told SiliconANGLE. “With the increasing sophistication of ransomware, any business could experience a multi-week attack, like Netgain.”

Trevor Morgan, product manager at comforte AG, a data security specialist, noted that Netgain has apparently been working proactively to isolate and mitigate the situation while keeping customers fully informed.

“This response is appropriate and admirable given the situation,” Morgan explained. “With these types of data security incidents, the best-case scenario is that downtime is a nuisance but sensitive data remains protected. “

Morgan said the incident taught others a lesson. “If your business relies on cloud services for the management, processing and storage of data, you are responsible for protecting sensitive data,” he said. “If regulations are broken, your business needs to be accountable for how you manage and protect people’s sensitive data in the cloud. This shouldn’t inspire fear, but should instead encourage you to re-evaluate how you protect your customers’ most sensitive private information, no matter where that data resides.

Photo: BalticServers / Wikimedia Commons

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