FunkSec Ransomware Explained: Tactics, Targets, and Defense

The late 2024 and beginning of 2025 saw a rise in AI-based ransomware as a new method to target victims for ransom, with a lower skill level to attack. FunkSec ransomware is one of these groups that gained sudden notoriety and made claims against many victims very shortly after its launch.

With reportedly over 85 victims being named within just a few weeks after launch, and offering very low ransom amounts (approximately $10,000). Many CISOs have noticed that FunkSec represents a shift: the use of AI in operations, an affiliate-driven model, and a lower threshold for inexperienced attackers.

The combination of these factors gives FunkSec a scalable business model and offers insights into potential directions for the underlying ransomware ecosystem. In this article, we will give a detailed breakdown of the FunkSec operational model, discuss their use of AI in their operations, and outline additional key defense controls.

What is FunkSec Ransomware?

The initial concept for FunkSec evolved in the late months of 2024. They were very aggressive in their advertising efforts, claiming multiple victims and promoting themselves as an AI-enabled group with products and tools designed for first-time affiliates.

With Ransomware-as-a-Service Models (RaaS), they help affiliates to conduct the attacks and take a share of the profit. FunkSec generates code for its products and automates workflow processes, reducing the entry barriers for new users wishing to engage in ransomware.

How FunkSec Ransomware Attack Models Work

To understand how FunkSec attacks work, it is best to look at the initial access techniques.

Initial Access Techniques

Phishing emails containing trojans (malicious code) or loaders disguised as IT messages or invoices are the starting point for most FunkSec attacks. They utilize credential stuffing tactics against VPNs and RDPs. The organization takes a very aggressive approach to scanning for publicly exposed and unpatched systems, making it easier to find unprotected firewalls, remote tools, and accessible services.

The AI Angle: What’s Real and What’s Hype?

While FunkSec has developed algorithms that allow it to create malware snippets, encrypt routines, and generate various scripts quickly, the use of AI does not inherently produce a quality product. 

Researchers have identified numerous instances of logic errors and patterns in the coding of FunkLocker, which have allowed detection using behavior monitoring software.

Ransomware Payload: FunkLocker

FunkLocker encrypts files, deletes shadow copies, and drops a ransom note. The overall design of FunkLocker is immature, simple, and poorly constructed. Analysts have reported that there are multiple instances of redundant functions, inconsistent naming conventions, and weak logic, which indicates that the software was either developed by AI or by unskilled programmers.

Data Theft and Double Extortion

FunkSec steals sensitive data before the command is executed and encrypts it all simultaneously. This includes customer and organization data, including documents, credentials, financial information, etc. When victims refuse to pay the ransom, FunkSec posts this data to leak sites. 

FunkSec’s ransom prices are substantially lower, which suggests that they earn part of their income by selling the exfiltrated data on underground marketplaces.

The Low-Rent Business Model

By requesting only around $10,000 per attack, FunkSec’s ransom amounts are substantially less than most ransomware demands. Making payment easier for the victim and reducing the decision time needed to pay the ransom. 

FunkSec takes advantage of the high volume of attacks they launch against small- to mid-size businesses that lack adequate strategies to prevent and mitigate ransomware attacks.

Who Does FunkSec Target?

FunkSec does not target any one industry; instead, they target companies that have bad password policies, have credentials that can be easily found on the Internet, or have other weak points in their IT infrastructure.

So far, FunkSec’s known victims have included organizations primarily in North America, Europe, and Asia, with very few larger organizations. Their victims generally have common issues with using weak passwords, open RDP ports, and delayed software patching.

Why FunkSec Is Dangerous Despite Its Technical Weaknesses

Despite being technologically weak, FunkSec poses a danger due to the fact that the democratization of ransomware allows anyone with basic computer skills to create their attacks as part of FunkSec’s Ransomware-as-a-Service (RaaS).

When affiliates attempt to develop an attack against clean systems, even if the initial code is poorly written, the volume of attacks overwhelms the understaffed SOCs at the victim organizations. 

By attacking a huge volume of targets, the probability that an understaffed SOC will not detect all attacks is greatly increased. Multiple volumes of attacks occur on a daily basis, which increases the likelihood of an attacker successfully compromising an organization by the sheer number of hourly attacks.

FunkSec AI Ransomware Prevention: What Actually Works

The key focus of a successful FunkSec AI Ransomware prevention strategy will be the resiliency aspect of the attack and the emphasis on growth through simplicity and consistent attack utilizing resiliency strategies.

Enhance Identity Security 

Weak passwords and exposed remote services are the two largest attack surfaces for identity-related attacks. Multi-Factor Authentication (MFA) must be in place wherever applicable, and organizations must continuously monitor dark web sites for leaking of their staff members’ credentials.

Patch Internet-Facing Systems Quickly

FunkSec is continually attempting to exploit vulnerabilities. Therefore, organizations should focus on patching VPNs, firewalls, web applications, and remote access tools.

Strengthen Human Layered Security

FunkSec continues to be an effective phishing threat. Organizations can leverage ongoing training, phishing simulations, and one-click reporting features to significantly reduce the amount of time an attacker has to attack your organization. Platforms that include Threatcop’s training and reporting features can assist organizations in tightening the defenses of their early-stage systems.

Detect Patterns Indicating Data Being Exfiltrated

FunkSec always extracts data before encrypting it. Therefore, organizations should closely monitor for large data transfers, unusual protocol usage, or any newly established connection to a cloud storage service. EDR/XDR behavioral analytics will also be beneficial here.

Secure Backup and Recovery Procedures

Organizations should use either offline or immutable backups. Backup recovery paths should be tested frequently to minimize the chance of recovering from a failure during an incident.

Email Authentication and Domain Monitoring

Organizations need to implement DMARC, DKIM, and SPF protocols to minimize the potential for becoming a victim of spoofing attacks. Organizations should also constantly scan their domains for unauthorized usage, especially those related to phishing attacks.

Use Threat Intelligence and SOC Detection

Organizations can use information gained from Check Point and SOC Prime to block suspected fraudulent C2 infrastructure and look for unusual PowerShell activity, process injection, or unexpected script execution.

Conclusion

FunkSec ransomware indicates a drastic change in the overall economy of cybercriminals. There is now a significantly lower bar for cybercriminals to be successful due to AI. In addition, the need for highly-skilled ransomware developers will become obsolete as ransomware gangs are able to function without needing the most sophisticated capabilities at scale. Automation, speed, and volume are emerging as new competitive advantages.

For defenders in this environment, there will be an ever-increasing importance placed on resilience. To cope with this evolving threat environment, organizations must embrace identity security, build a culture of continual human awareness, and ensure their patching capabilities are quick and effective. The future belongs to those organizations that can continually evolve, remain flexible and proactive, and understand that the pace of ransomware attacks is increasing dramatically.