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Citadel is back, and it's stealing banking credentials, again

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September 4, 2013

Citadel, the nasty botnet at the very heart of a widely criticized takedown by Microsoft in June of this year, has made a comeback and it's stealing banking credentials again, this time mostly from Japanese users, according to Trend Micro.

The security vendor claims to have found at least nine IP addresses, mostly located in Europe and the United States, functioning as the botnet’s command and control servers.

About 96 percent of the overall connections to these C&C servers come from Japan, proving that most of the banking Trojan infections are from that country alone, suggested Trend Micro.

The security firm added the following in a blog post-- "During a six-day period, we detected no less than 20,000 unique IP addresses connecting to those infected servers, with only a very minimal decrease from beginning to end. This means that there is still a large number of infected systems stealing online banking credentials and sending them to the cybercriminals responsible for the botnet."

The banks and financial institutions targeted in this campaign have already released warnings and advisories to their customers regarding the attack itself.

Users are reminded to read those warnings properly before logging into their online banking accounts. As well as Japanese financial and banking organizations, the botnet has also been targeting popular webmail services such as Gmail, Hotmail and Yahoo Mail, Trend Micro added.

Overall, Citadel was the subject of Operation B54, what Microsoft described back in June as its "most aggressive botnet operation to date".

Working closely with the FBI, financial institutions and other technology firms, Microsoft said it disrupted some 1,400 botnets associated with the Trojan malware, which still managed to grab more than $500 million from several bank accounts around the globe.

But the initiative was slammed by the security community after Microsoft allegedly seized hundreds of domains as part of its swoop which were already being sinkholed by researchers to find out more about the botnet.

Additionally, British security vendor Sophos claimed at the time that the takedown wasn’t nearly as successful as was initially made out.

Threat researcher James Wyke said in a blog post that only half of the 72 Citadel C&C servers Sophos was tracking appeared on Microsoft’s list.

Worse, about 21.4 percent of those on Microsoft’s list failed to point to a sinkhole, implying “either that the sinkholing was unsuccessful or that the domains have already been re-appropriated by the Citadel botnet owners”, he added.

“Overall, takedown efforts such as this can provide immediate benefit to the public by effectively disabling the control channels used to administer a very dangerous piece of Trojan or malware,” said Wyke.

“But the long-term effect of this particular takedown on Citadel is unlikely to be significant. It looks as though many of the botnets weren't knocked out, and rebuilding those that were taken down will not take too long, I would say.”

It now appears that those concerns were well founded. We will keep you updated on this and on other stories.

In other internet security news

Over the weekend, internet users in China were met with very slow response times or no response at all as the country's .cn domain extension came under severe DDoS (distributed denial of service) attacks from many parts of the world.

The attacks were the largest of its kind ever in the history of that country's internet communications, according to the China Internet Network Information Center, a state agency that manages the .cn country TLD (top level domain).

To be sure, the double-barreled attacks took place at around 2.00 AM Sunday, and then again at 4 AM. The second attack was long-lasting and large-scale, according to state media, which said that internet service was slowly being restored in some parts of the country.

Official state media said the attacks targeted websites with the .cn country domain, as well as the popular microblogging site Sina Weibo.

Distributed Denial of Service (DDoS) attacks aren't technically hack attempts per se, since they can be done without breaking into any server systems.

Typically, DDoS attacks overwhelm a website's servers by flooding them with hundreds of thousands of requests per minute. That makes websites either unreachable, extremely slow or unresponsive.

To bring down larger sites, attackers will sometimes organize large numbers of infected computers to send requests all at once.

Chinese authorities closely regulate content and websites available to internet users in the country. The restrictions are extremely sophisticated, leading some to call it "The Great Firewall."

It's still unclear whether the attack is related to political events in China, which appears to be in the midst of carrying out a big crackdown on internet dissent.

The Chinese government is also wrapping up the trial of former political kingpin Bo Xilai, leading some Web users in China to note the timing of the attack.

".Cn domain names under attack?," one user said on Weibo. "Saw this news and laughed. On every 'festive occasion' doesn't China's internet become paralyzed?"

Another user lodged a more practical complaint, noting that the sluggish internet would probably leave many Chinese without sleep.

In other internet security news

Microsoft's new Windows 8 operating system is so vulnerable to the average hacker that Germany's businesses and government workers should not use it, the country's top authorities have warned in a series of leaked documents.

According to several files published in the German weekly 'Der Zeit', the Euro nation's officials fear Germans' data is not secure thanks to the OS' Trusted Computing technology-– a set of specifications and protocols that relies on every computer having a unique cryptographic key built into the hardware that's used to dictate what software can be run.

Authorities at Germany's Federal Office for Information Security (BSI) later clarified that it was the Trusted Computing specs in Windows 8 in conjunction with the Trusted Platform Module (TPM) chip embedded in the hardware that creates the alleged security issues.

BSI released a statement that backtracked slightly, insisting that using Windows 8 in combination with a TPM may make a system safer, but noting that it is investigating "some critical aspects related to specific scenarios in which Windows 8 is operated in combination with a hardware that has a TPM 2.0".

Trusted Computing is a controversial large set of specifications developed by a group of companies including AMD, Cisco, Fujitsu, Hewlett-Packard, IBM, Intel, Microsoft and Wave Systems Corp.

The technology is designed to stop the use of software and the files which do not contain the correct digital rights permissions (thus protecting the property of vendors behind the protocols), including "unauthorised operating systems" (a specific function of the much-maligned Secure Boot).

Microsoft argues that Secure Boot protects users from rootkits and other malware attacks. The set of permissions is automatically updated online, outside of the control of the user.

A machine that contains a Trusted Platform Module and runs software adhering to the Trusted Computing specifications is, arguably, under the control of the vendor-– in this case Microsoft.

It also identifies the machine to the vendor, meaning that users' identities can be linked to their machines as well as their online activities. As Microsoft is a U.S. company, opponents to the protocols argue, users' data is theoretically accessible to U.S. spooks in the National Security Agency via the Foreign Intelligence Surveillance Act, as Der Zeit points out.

A TPM 2.0 chip is being built into more and more computers running Windows 8. The newspaper obtained an internal document from Germany's Ministry of Economic Affairs written at the beginning of 2012. It warned of "the loss of full sovereignty over information technology" and that "the security objectives of confidentiality" and integrity are no longer guaranteed".

It continued-- "The use of Trusted Computing is unacceptable for the federal administration and the operators of critical infrastructure."

And Trusted Platform Module 2.0 is considerably more invasive than older versions. Once this is rolled out across all Windows PCs, the Germans fear, there will be "simply no way to tell what exactly Microsoft does to its system through remote updates".

"From the perspective of the BSI, the use of Windows 8 in combination with a TPM 2.0 is accompanied by a loss of control over the operating system and the hardware used. This results in new risks for the user, especially for the federal government and critical infrastructure."

We previously described Trusted Computing as the "widely derided idea of computing secured for, and against, its users".

The leaked documents advised that Windows 7 is still safe to use, at least until 2020. Windows 8, on the other hand, is so tied up with Trusted Computing protocols that it is already "unfit for use".

As can be expected, Microsoft has denied there was any backdoor. In a lengthy statement, a spokeswoman insisted that users cannot expect "privacy without good security". Redmond argued that users could purchase machines whose manufacturers had disabled the TPMs.

Presumably this will one day become a selling point, although Microsoft still argues that this will actually make the hardware less "secure".

She said-- "TPM 2.0 is designed to be on by default with no user interaction required. Since most users accept OS defaults, requiring the user to enable the TPM will lead to IT users being less secure by default and increase the risk that their privacy will be violated. We believe that government policies promoting this result are ill-advised."

It's also important to note that any user concerns about TPM 2.0 are addressable. The first concern, generally expressed as “lack of user control,” isn't correct as most OEMs have the ability to turn off the TPM in x86 machines. Thus, purchasers can buy PCs with TPMs disabled (of course, they will also be unable to utilize the security features enabled by the technology).

The second concern, generally expressed as “lack of user control over choice of operating system,” is also incorrect. In fact, Windows has been designed so that users can clear/reset the TPM for ownership by another OS if they wish. Many TPM functions can also be used by multiple OSes (including Linux) concurrently.

Rumors about a backdoor in Windows are almost as old as Microsoft itself. In 2009, we reported on the NSA's admission that it had worked with developers on Windows 7's operating system security, forcing Microsoft to deny that there was a backdoor left open to hackers.

In other internet security news

Less than fifteen days after it was first made aware of the issue, Xerox is now rolling out a fix for a printer software glitch that caused numbers in documents scanned by certain of its WorkCentre multi-function printers (MFPs) to come up garbled and unformatted.

Xerox said late last night-- "Our engineering team has been working around the clock to deliver the patch. We have conducted extensive testing both in our labs and in the field to ensure a quality result and an easy installation for your IT staff."

The printer glitch can cause certain digits to be transposed when documents are scanned in as PDFs. For example, the number "6" might become an "8", a potential nightmare for accountants and others who rely on copies of spreadsheets and similarly number-heavy documents.

Xerox says it has determined that the bug only crops up when scanning what it terms "stress documents" – documents containing very small type, for example, or other issues that make them hard to read with the naked eye.

Initially, Xerox had believed that the copier issue could be fixed by changing certain settings. Upon further investigation, however, that turned out not to be the case, and the self-styled "Document Company" warned customers that producing a patch for the glitch could take several weeks.

It will take at least a few more days to patch all of the affected devices, but some lucky few Xerox customers could begin updating their printers today after the company issued its first round of patches late last night.

The first devices to get the fix include the Xerox ConnectKey, WorkCentre 75xx, WorkCentre 57xx and ColorQube 93xx series.

Xerox says it will release more patches for "the remainder of the affected products". The company said in early August that 14 models were affected in its next round of fixes, which it hopes to ship the week of August 26.

To further simplify the patch process, Xerox has created a one-stop website at where customers can download both the appropriate patches and support documents explaining how to apply them.

Xerox says that customers can either download and install the patches themselves or contact local service or support reps to take care of it.

In other internet security news

The Guardian’s photo of the computers it claims to have smashed in order to appease the British government over the Snowden affair has been called into question over both what it shows, and what it doesn’t.

Guardian editor Alan Rusbridger yesterday revealed that GCHQ operatives in July paid the newspaper a visit in order to vet the wrecking of one or more computers so that the encrypted contents of their hard drives could no longer be accessed and perhaps one day fall into the wrong hands.

A follow-up story featured a snap of the remains of a computer that held files leaked by Edward Snowden to the Guardian and destroyed at the request of the British government. The photo is the one you see at the left.

The photo certainly shows the remains of a MacBook all right. But Guardian photographer Roger Tooth’s photo also contains what is clearly a second MacBook laptop, along with an old graphics card. You can see the three output connectors on the backplane, and another motherboard, possibly a small desktop computer or maybe another device, given the large areas empty of circuitry.

The larger of the three motherboards seems too small to have played host to the graphics card, suggesting the Guardian picture shows the remains of at least four computers - and incomplete ones at that. The photo is actually too small to identify the graphics card and the three motherboards precisely.

But even at this size, it’s clear there is no sign of either hard drives or solid-state storage. Given the vigor with which “a senior editor and a Guardian computer expert” clearly applied themselves to the destruction of the devices that’s perhaps not surprising - these components must have been reduced to invisible dust.

According to the paper, its two staffers “used angle grinders and other tools to pulverise the hard drives and memory chips” while being watched by GCHQ techies “who took notes and photographs, but who left empty-handed”.

If that’s the case, why does the Guardian picture show so little of the three, possibly four machines? There’s not much beyond motherboard, storage and memory inside modern Mac laptops, but what about the desktop’s or desktops’ wiring, power supplies, fans, chassis, optical drives and casings?

Nor does the Guardian’s second story explain why the paper’s computer specialist felt the need to vent such spleen on a graphics card which surely couldn’t be used to cache Snowden’s encrypted leaks.

The apparent destruction of chippery on the pictured boards could give some credit to wild conspiracy theories to the effect that the world's major investigative agencies could even read information out of RAM after it has lost power, perhaps through some ultra-advanced scanning of residual quantum ghosts in the computer.

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: Trend Micro.

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