MaMIoT: Manipulation of Energy Market Leveraging High Wattage IoT Botnets

If a trader could predict price changes in the stock market better than other traders, she would make a fortune. Similarly in the electricity market, a trader that could predict changes in the electricity load, and thus electricity prices, would be able to make large profits. Predicting price changes in the electricity market better than other market participants is hard, but in this paper, we show that attackers can manipulate the electricity prices in small but predictable ways, giving them a competitive advantage in the market. Our attack is possible when the adversary controls a botnet of high wattage devices such as air conditioning units, which are able to abruptly change the total demand of the power grid. Such attacks are called Manipulation of Demand via IoT (MaDIoT) attacks. In this paper, we present a new variant of MaDIoT and name it Manipulation of Market via IoT (MaMIoT). MaMIoT is the first energy market manipulation cyberattack that leverages high wattage IoT botnets to slightly change the total demand of the power grid with the aim of affecting the electricity prices in the favor of specific market players. Using real-world data obtained from two major energy markets, we show that MaMIoT can significantly increase the profit of particular market players or financially damage a group of players depending on the motivation of the attacker.