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Chinese hackers target critical U.S. infrastructure

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February 20, 2013

Yesterday's various reports detailing hacking activities by the Chinese government against several U.S. targets confirms what everyone already suspected for a while-- the Chinese, along with other nations and groups, are gathering information that could disrupt the operation of critical infrastructure in the United States, including power plants, oil refineries, water treatment plants, several chemical factories and even air-traffic control systems in numerous airports around the country.

But to be fair, the report from U.S.-based cybersecurity firm Mandiant didn't say the Chinese government has actively tampered with these systems. The only two countries thought to have actually altered industrial processes in another country are the United States and Israel, which are suspected of infecting an Iranian uranium enrichment plant with malicious software that caused the centrifuges to spin out of control and self-destruct.

But the Mandiant report did say that it was highly likely that Chinese military personnel did hack into Telvent Canada, a company now known as Schneider Electric that makes switches, drives and other equipment for oil and gas pipelines and refineries.

The Chinese military denies all allegations, calling them "groundless both in facts and legal basis." Mandiant's analysis fingering the Chinese comes just two months after the U.S. Department of Homeland Security said cyber attacks on critical U.S. infrastructure increased a whopping 52.4 percent in 2012 alone.

The department fielded reports on 198 attacks, several of which resulted in successful break-ins. Security experts say the snooping probably has two purposes: To gather information in an effort to improve China's own critical infrastructure; and to lay the groundwork for a future attack to shut down those systems, if China wanted to pursue that option.

Many observers say that if it ever did ever come to that, things could get ugly and very fast. The industrial control systems than run so many of America's power plants, factories, pipelines, dams, water treatment plants and other infrastructure elements are fairly well guarded from the outside, said Dale Peterson, chief executive of Digital Bond, a company that consults on such matters.

However, once a hacker is in the system, there's very few safeguards preventing the intruder from sending commands that could, say cause an accident at a chemical plant or lead a pharmaceutical factory to dispense the wrong medications to hospitals and doctors all over the U.S.

Once they get on those networks, they are insecure by design. Targeting a third-party vendor like Telvent is one way to get around the more robust security systems put in place by the pipeline companies. Telvent, as a contractor, had access to the pipeline networks.

Overall, targeting third parties is something that Dale Petersen has experience with himself. Petersen is the CEO of a security firm and was the subject of a so-called "spear phishing" attempt last year. In that attack, a crafty cyberthief fashioned an email to Digital Bond employees that seemed to come from Petersen himself.

It contained a link that, if clicked, could have granted the perpetrator access to sensitive client data held by Digital Bond. The plan was only thwarted when an auto-forward function sent Petersen a copy.

"For a while, it was a dirty little secret that just people in the industry knew," said Petersen, referring to how easy it is to take over an industrial process once you're in the system. "But we can't wait another 20 years, or whatever it is that people thought we could get out of these systems. We have to upgrade them right now. Time is of the essence."

The attack on Digital Bond appeared to originate from China, Petersen said. The key word there, though, is "appeared." The perpetrators could have designed the attack to look like it came from China, he acknowledged.

So far, neither the Chinese government nor the private sector is doing enough, and that's one of the biggest issues right now.

One of the most critical systems is the power grid itself. Without electricity, factories, water delivery and offices all stop working at once.

Electric industry sources say the most sensitive equipment -- think nuclear power plants -- have internal, on-site control functions that are not connected to the internet. That makes them much less vulnerable to attack.

But not all systems are that secure. The advanced age of much of the power grid, combined with how interconnected everything is, is a major challenge, and will continue to be so for the short and near term.

"It's a critical problem that's at the top of the list of every utility executive," said Mark McGranaghan, a power delivery and utilization specialist at the Electric Power Research Institute.

In November, security researchers have discovered a whole new list of security vulnerabilities in industrial control software from many leading manufacturers, including Siemens, General Electric, Schneider Electric, ABB/Rockwell and a few others.

McGranaghan said that building redundancies into the system should make it stronger. There are also efforts toward greater monitoring, and toward ensuring that compromised systems can be isolated. He believes grid security should be made better, not worse, by the adoption of smart meters and other internet-connected devices that could further help the utilities' ability to quickly fix an issue.

Petersen conceded that many challenges still remain, and that for some, it sometimes looks like a culture issue. We will keep you posted on these and on other developments.

In other internet security news

Various security vulnerabilities in the U.S.' television emergency alert system, exploited last week by pranksters to put out fake warnings of a zombie apocalypse still remain widespread. And that's after TV station system admins remembered to change their default passwords on their broadcast equipment after they got hacked into.

As it happens, the hackers managed to attack a television station's emergency alert system in Montana to broadcast an on-air audio warning about the end of the world...

But it gets worse-- the initial attack on KRTC's equipment was also repeated in three other states-- two stations were electronically broken into in Michigan as well as several others in California, Montana and New Mexico, according to Karole White, president of the Michigan Association of Broadcasters.

"It isn't what the pranksters said," White added. "It's the fact that they hacked into the system in the first place."

And it's very easy to understand how the hacks were possible to begin with, since the TV stations had neglected to change their original default passwords on their own equipment facing the public internet. Most broadcasting equipment makers today issue factory default passwords that need to be replaced before being connected to the internet, and this is clearly indicated in their installation manuals.

A security advisory sent by regulators at the FCC to broadcasters urged TV station system admins to take immediate action to correct the issue. They were told to change all passwords on all equipment regardless of the manufacturer as well as make sure that all equipment were protected behind a firewall and that hackers had not queued up bogus alerts for later transmission.

Reuters reports that an alert controller device from Monroe Electronics had been abused to carry out at least some of the apocalypse pranks. Monroe responded by publishing an advisory on its web site: "To improve overall security all One-Net R189 users are urged to: 1) Change the factory default password immediately. 2) Make sure that all network connections are behind secure firewalls.

Meanwhile, researchers at IO-Active Labs discovered a substantial number of insecure emergency alert system devices directly connected to internet, making it possible for hackers to exploit even more security flaws in attacks that go beyond pure mischief.

Mike Davis, a hardware expert at IO-Active Labs, says that by using Google he was able to find no less than thirty alert systems across the United States that were easily vulnerable to attacks. The security holes allow attackers to remotely compromise these devices, and then they can broadcast official alerts through U.S. radio and TV stations all over the country.

Davis also discovered very weak cryptography and security shortcomings in the firmware loaded into emergency warning systems. He reported the security vulnerabilities to the U.S.' Computer Emergency Response Team (CERT) about a month ago but isn't revealing the details of the vulnerabilities nor the names of the manufacturers they affect, pending confirmation of a security patch.

In other internet security news

Federal police in Spain has arrested eleven individuals suspected of running a €1 million a year ransomware gimmick using malware that posed as a message from law enforcement officials.

Investigators first became interested in the 'Reveton Malware' after hundreds of complaints from victims of the crime starting flooding in at the beginning of 2011.

Trend Micro and Spanish law enforcement agencies worked with the European Cybercrime Centre (EC3) at Europol in a concerted operation coordinated by Interpol over the months that followed, sharing gathered intelligence, samples and many related technical details.

Cops said that their research allowed them to literally map the criminal network infrastructure including traffic redirection and command control servers.

They then conducted multiple raids on various premises, seizing computers, hard drives, servers, IT equipment and stolen credit cards used to cash out the money that victims had paid.

In a statement, police said that since it was detected in May 2011, there had been more than 1,200 complaints about the so-called "POLICE VIRUS" (Reveton drive-by malware).

Police said this intelligence led to the arrest of eleven individuals. One of the suspects, an unnamed 27-year-old, is suspected to be the kingpin of the group that produces the Reveton ransomware.

This Russian national was arrested in Dubai, United Arab Emirates. Spanish authorities have filed an extradition warrant. Along with this key arrest, police said they had run a takedown operation focusing on the lower-ranked members of gang, in connection with which they made several additional arrests.

Police added that lower-ranked members in the group were involved in monetization of the Pay Safe Card/Ukash vouchers received as payment in the scam. The gang had a branch in Spain's Costa Del Sol that exchanged these vouchers and then converted them into real cash, which would then be sent to the main group in Russia.

Europol said in a separate statement: "The financial cell of the network specialized in laundering the proceeds of their crimes obtained in the form of electronic money. The gang employed both virtual systems for money laundering and other traditional systems using various online gaming portals, electronic payment gateways or virtual coins."

Spanish cops said that ten of the suspects had been arrested in connection with allegations of money-laundering activity. Six of the cuffed suspects are Russian, two Ukrainian and two Georgian, but all of them were based in Spain, police said.

Spanish police said the fraudsters behind the scam were netting about €1 million a year in illegal profits. "This coordinated activity, in a similar fashion as the Trend Micro/FBI action against the DNS Changer gang last year, leading directly to the arrest of individuals believed to be actively engaged in cybercrime, should serve as a model for how the security industry and law enforcement can effectively cooperate in the global fight against online criminal activities," said Rik Ferguson, director of security research and communications at Trend Micro.

The ransomware used by the gang utilizes police logos to make it look like it came from a law enforcement agency to convince victims to cough up a fine"of around €100 using cash vouchers in order to unlock their computers.

In other internet security news

U.S. defense contractor Raytheon has developed new software that can mine social media websites such as Twitter and Facebook to track and predict users' behaviour, according to British media news outlets.

The story from The Guardian says that the key features of Raytheon's software, developed in co-operation with the U.S. government and delicately titled Rapid Information Overlay Technology are said to be an ability to sift through social media and figure out who your friends are and the places you frequent.

What is disturbing is that such a tool could likely end up in the hands of a repressive State, or a shadowy agency inside a more open State. Australia's Sydney Morning Herald today has a similar story on the same theme.

All of this *is* disturbing, except for the fact that similar software can be had from other sources that are far less scary than a defense contractor.

For instance, IBM sells “social media analytics” software that can “capture consumer data from social media to better understand attitudes, opinions, trends and manage online reputation” and even “predict customer behavior”. That's the same company that can whip up a supercomputer or sell you a scale-out NAS capable of storing multiple petabytes of raw information.

And customer service software firm Genesys sells “social engagement” software that “automates the process of social listening to your customers” and “extends business rules and service level strategies to the growing volume of social media-based customer interactions.

A quick mention of Big Data, daily and breathlessly advanced as capable of all of the above, and much more to more data, is also surely worth inserting at this point.

And then there are Google, Twitter, Facebook and others whose entire business is built on figuring out who you spend time with and where you spend or intend to spend that time, so they can sell that information to advertisers all over the globe.

Or hand over your data to the government, which seems to be happening rather more regularly if the social networks' own reports on the matter suggest.

We're not suggesting that Raytheon's software was designed as an instrument of State surveillance, but it's still worth pointing out that the company is far from alone in having developed software capable of tracking numerous data public sources, aggregating them into a file on an individual, and doing so without the individuals' knowledge.

And that the company has done so in full collaboration with the U.S. government should not surprise anyone.

As for the spatial aspect of these allegations, the fact that photos contain spatial metadata is hardly news, nor is the notion that social media leaves a trail of breadcrumbs a novel-- it's a well-known fact.

One has only to revisit news from 2010 to be reminded of how pleaserobme.com pointed out how social media can alert thieves to the fact you've left your home.

Far clearer is the fact that you are the product for any free online product. Also very clear is that by using such services, data about you will be consumed by a large and diverse audience. The scariest thing of all may be how few of those that use such services care or even realize the vast implications this could have on their personal and professional lives.

In other internet security news

The Canadian government is blaming a simple printing error for the fact that some student loan recipients who received letters to say their personal information had gone missing along with a portable hard drive also got letters addressed to someone else.

Canada's Human Resources and Skills Development (HRSDC) revealed in mid-January that a hard drive containing the personal information of some 583,200 Canadian students had gone missing.

The data included social insurance numbers and dates of birth of people who had received student loans between 2002 and 2006.

Victims of the data breach began receiving notification letters a few days ago, and at least 100 of those envelopes contained letters intended for other people.

In Ottawa's House of Commons, opposition members hammered the government over the latest blunder in question period earlier this week.

“Mr. Speaker, the incompetence continues regarding the data breach and mail-outs now going to the wrong people,” Liberal MP Rodger Cuzner said.

Human Resources Minister Diane Finley responded that her department had identified the cause of the wayward letters and “the issue has been fixed.”

HRSDC said that a technical issue with printers led to some envelopes being double stuffed, and the personal information contained in the letters was limited to names and addresses.

The department will send pre-paid envelopes to those who received letters intended for others so they can be returned to the intended recipients.

The department went public about the lost of the data last month after a RCMP investigation into another breach revealed that there was a hard drive missing from an office in Gatineau, Quebec.

The hard drive was last seen in August but was only discovered missing in November. Finley has said there is no evidence to suggest that the missing data has been used for unlawful purposes.

The department has said that the portable hard drive did not contain personal banking, social insurance numbers or medical information.

But Canadians affected by the breach are still very concerned. National Democratic Party minister Ruth Brosseau, who took out a student loan eleven years ago, is among those whose data is on the missing hard drive.

“It’s my SIN card, it’s my address,” Brosseau said. “I know a lot of people knew a lot about me after the election, and now they’re going to know a lot more. So it’s very, very disturbing.”

The security breach has sparked both an internal and an RCMP investigation, and department officials will appear before a Commons committee next month to answer questions.

Dozens of people have also joined at least three class-action lawsuits that have been filed over the breach, demanding hundreds of millions of dollars in financial compensation.

In other internet security news

Two internet security research scientists say they have identified a new vulnerability in TLS, the encryption technology used to safeguard online shopping, banking and privacy.

Discovered today, the design flaw could be exploited to snoop on passwords and other sensitive information sent by users to HTTPS websites.

Professor Kenny Paterson from the Information Security Group at Royal Holloway, University of London and PhD student Nadhem Alfardan claim that they can easily crack TLS-encrypted traffic in a man-in-the-middle attack.

According to their study, the weakness revolves around altering messages exchanged between the web server and browser, and noting microsecond differences in the time taken to process them.

If you need reliability when it comes to SMTP servers, get the best, get Port 587.

Get a powerful Linux Dual-Core dedicated server for less than $2.67 a day!

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Source: PG&NN.

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