An 'arms race' is emerging to steal computing power to mine cryptocurrencies, says RedLock CEO

  • There appears to be an arms race by hackers to steal computing power from the public cloud to mine cryptocurrencies, RedLock co-founder and CEO Varun Badhwar says.
  • "Money doesn't grow on trees but it, in fact, does today with cryptocurrencies," Badhwar says.

There appears to be an arms race by hackers to steal computing power from the public cloud to mine cryptocurrencies, RedLock co-founder and CEO Varun Badhwar told CNBC on Thursday.

Cryptojacking, a process whereby hackers deploy software that exploits a computer's central processing unit to mine cryptocurrency, is on the rise, said Badhwar, whose firm specializes in cloud security.

"Money doesn't grow on trees but it, in fact, does today with cryptocurrencies," Badhwar told "Squawk Box."

The soaring value of cryptocurrencies, a growing billion dollar market, is prompting hackers to shift their focus from stealing data to pilfering computing power.

"What we're facing today is attackers, instead of going after and stealing data, are trying to find free effectively or cheap [computing] resources to use to complete these transactions," he said.

Last week, RedLock revealed Tesla's Amazon Web Services cloud account was compromised by hackers and used for cryptocurrency mining, a process where miners solve complex mathematical problems to validate a transaction and add it to the underlying network.

RedLock didn't specify which cryptocurrency was mined in the cyberbreach. Tesla stated that its investigation founded no indication that customer privacy or vehicle safety had been violated in the breach.

"We're not sure what the financial impact of Tesla was," Badhwar said Thursday. "We have seen in a couple of days they can rack up to a quarter million dollars worth of compute bills for the customers. And, yes, they can get away with thousands of dollars worth of cryptocurrency."

Badhwar, whose firm is made up of security experts and former entrepreneurs of successful cloud security companies, said security programs for the cloud are currently very immature.

"What it really takes is it getting very mature quickly on cloud security programs, getting good monitoring controls to make sure you're understanding who's getting into your environment."

— CNBC's Ryan Browne contributed to this report.

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