Aswe know that tradition ally, "C ryptography" is used forinformation processing and communications, it h elps people to store information securely and it isu sed very frequen tly forprivate communications.butCryptovirologyis the study of applications of cryp tography to build the malicious software(malware). It is an investigation, how modern cryptographic tools and paradigms can be used to strengthen, develop and improve new malwareattacks.This is a forward engineering discipline that can be used for attackin g rather than defending.In this paper we p resenttheclear process of "how the crypto virus can damage the victim's system,based on Extortion mechan ism" with showingthe live scenariothat causes the lossof access to in formation, loss of control and loss of money also.Here we discuss and explain some of the latest events regard ing to this cryproviral extortion like GPcode and C onflicker. This paper also suggestssome of the countermeasu res, mechanisms to defendand prevent such attacks. Even if the attacker'saction s on the h ost machin e are being monitored, itcannot be controlledthe host systemcompletely. Byknowing that the exact scen ariowhat exactly hacker follow to spoil ou r system or network using this cryptoviralExtortionmethod .we can an ticipate or guesses the opponent's or attackers next move and can able to p rovide someof thesafe guards initially
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