Security researchers at Symantec demonstrated how an Android Wear device might be impacted by typical Android ransomware. The malware could be easily activated by the user if they were tricked into running it, by clicking on a malicious app. After installation, the ransomware will cause the smartwatch to become unresponsive and unusable. However, you can recover from this situation, but unfortunately, it involves a factory reset of your smartwatch. No such ransomware has been seen yet, but the day is not far when this becomes a reality.
Source: https://thehackernews.com/2015/08/ransomware-android-smartwatch.html