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Hackers Will Never Stop Targeting the Art Market, But Buyers Are Safer Than They Think

Auction houses (and some galleries) are investing heavily in layered back-up systems, redundancies and third-party payment platforms to reduce exposure to cyber threats.

It was an absolute mess. “The art dealer’s sales team was locked out of its inventory information, freezing their sales transactions,” Steve Pincus Sr., managing director of insurance brokerage firm Risk Strategies, told Observer. A cybercriminal was holding the gallery’s data hostage by hacking into its systems and encrypting the files, agreeing to decrypt them only after payment—in other words, the gallery was dealing with a ransomware attack. “Once the ransom was paid and system access was restored, it still took several months to be sure that the existing data was not manipulated in any way.”

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Until the data was verified, it was effectively useless. In the meantime, the sales team could not access inventory. “They didn’t know what works were for sale, for how much, or any other data related to any individual work of art,” Pincus added. Sales were lost, and the gallery filed what is known as a Business Interruption claim.

Fortunately, the gallery had taken out a cyber policy that covered business interruptions, and the insurer paid out a claim exceeding seven figures. This is not simply a story about the value of business insurance, however, but about the risks individual dealers, galleries and auction houses face from hackers seeking sensitive client data, including names, addresses, occupations, credit card numbers, bank accounts and even passport numbers—everything clients provide in order to buy and sell at the highest levels of the commercial art world

“We get attacked very regularly—weekly if not daily,” Sam Spiegel, technology principal at Heritage Auctions, told Observer. The company’s security systems generally blunt those attacks, though the occasional hacker breaks through. In 2019, a ransomware attack took down its website for several days, but Heritage had backups in place and didn’t lose any data. More........

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