A user on DeviantArt named Franz32 encountered the virus and finally managed to contain it. He is working on taking it apart to see how it ticks. Here's what he said on the matter:
Quote from Franz32The virus will come to the victim through a contact whose PC was infected.
It will say a message like
"when was the last time you saw this photo?
[suspicious URL ending in your Skype username] :) (Smile)"
Clicking the link will download a file labeled "telegram (3).zip" to the victim's computer, containing "whatsapp.scr".
After the file is opened it will use the victim's Skype client to continue spreading the virus in the forementioned manner.
Effects other than spreading are unknown, but my infected friend is having (possibly unrelated) problems with their video card as well as internet browser problems.
**UPDATE**
There is confirmation that whatsapp.scr contains Trojan.Ransomware.ED!
This is what YooCare says about this trojan.
"Once installing itself in the computer successfully, Trojan.Ransom.ED begins to change system settings, simultaneously adding malicious files and registry entries to the target system forcedly, which makes it possible to avoid troubles and remain active in the backdoor to control the infected computer easily. Your computer will be very strange. The currently running program or even the computer will suddenly shut down without prior notice to you. You know, too many abnormal shutdowns can cause not only system damages but also hardware damages. It is also able to hide your important files, slow down the computer and even lead to system collapse. Moreover, other viruses will be injected into the infected computer, which will further damage the computer. With the extra help from these viruses, this Trojan can sleep without any anxiety. It is capable of monitoring your computer using traces and transmitting the gathered information back to the virus makers. No one can predict how they will deal with the information. Therefore, you must remove the Trojan horse as soon as possible since time is pressing. But it is hidden deeply in your computer by pretending to be a part of the system. The stiff antivirus programs are difficult to find out all its malicious components. Thus, manual removal is the most effective method."
Here is a link to the article and removal instructions. http://blog.yoocare.com/trojan-ransom-ed-how-to-remove/ [Just scroll down a bit.]