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Nasdaq servers infected by malware that exploit zero-day vulnerabilities

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July 18, 2014

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According to a magazine cover story published today, Nasdaq is saying that its stock exchange servers were recently infected by malware that exploits not just one but two mysterious zero-day security vulnerabilities.

Despite spending a huge amount of money on computer security, the American number two stock exchange was instead wide open to attack, we're told.

Today's scathing report pulls the curtain back to reveal a little more about the attack on Nasdaq's software that was first reported in February 2011.

To be sure, back in 2010, the FBI noticed odd network traffic coming out of Nasdaq's systems that indicated a malware infection.

The federal investigating agency then alerted the exchange, which knew about a compromise but had neglected to tell anyone about it.

A five-month investigation by the FBI, the NSA, the CIA and even the U.S. Treasury Department ensued.

According to a Bloomberg investigation, what emerged was that malware used two unnamed security holes, for which no security patches existed at that time.

The magazine was not able to reveal which software was attacked, nor whether the zero-day vulnerabilities were used to infect systems or to exfiltrate data, or both.

Further analysis of the attacking code revealed that it was similar in design to malware written by the Russian Federal Security Service for spying and, according to the NSA, had the ability to seriously disrupt the exchange's activities.

But in reality, the malware could have come from anywhere, Bloomberg notes, and that's the really troubling aspect of it all.

Additional efforts to investigate the infiltration were also hampered from the start by poor security practices within the exchange, it's claimed.

Daily server logs, which could have shed more light on any malicious activity, were largely unavailable.

Once the network traffic was analyzed, investigators found multiple infections, and believe that malware grabbed data from the exchange and then simply leaked it somehow.

But it's far from clear at all what exactly was taken, if anything. Nevertheless, one investigator described the servers as “the dirty swamp.”

This prompted the FBI to check out ten U.S. banks to see if there had been cross contamination from the Nasdaq stock exchange.

And not all of the banks agreed to take part, but of those that did none had been infected by the Nasdaq malware, or so they claim.

But almost all could have been infected as their computer security systems are so lax, it appears.

In February 2011, Nasdaq alerted customers that it had been under attack, and added some more details in October of that year. Exchange chief Robert Greifeld said at the time that his agency spent nearly $1 billion on computer security, but without providing any further details.

If the Bloomberg investigation is to be believed as accurate, we can only wonder what that money is being spent on.

Maybe the $600,000 per month the former head of the NSA wants to charge banks for security advice isn't that outrageous after all!

In other internet security news

Amazon Web Services' share of cloud-hosted malware atacks has more than doubled in the last six months, and is taking the IT industry by surprise. The general percecption is that AWS isn't ready for prime time.

That's according to NTT subsidiary Solutionary, which demonstrated its findings in its Q2 2014 Security Engineering Research Team (SERT) report published July 15 of this week.

Internet security researchers said that, out of the top ten ISPs and hosting providers surveyed, the proportion of malware-hosting websites served from Amazon infrastructure more than doubled from 16 percent in Q4 2013 to 41 percent in Q2 2014.

During the same period, hacker attacks on some European hosting companies grew from 10 to 13 percent; from 9 to 12 percent on Akamai; and from 6 to 9 percent on Google.

And this isn't the first time that Amazon's Cloud has been used by miscreants to host large amounts of malware-– Solutionary made the same claims in its Q4 2013 SERT file, and Kaspersky researchers discovered in 2011 that Amazon Web Services was playing host to the notorious SpyEye malware.

Part of the reason must be Amazon's scale and popularity as a cloud service, along with its Bezos-backed low prices. This means any wannabe hacker can buy server images from crooks and deploy them on AWS to build a network of malware-spreading websites.

"Overall, cloud instances of web services are extremely simple to provision on Amazon, GoDaddy, and all the majors," noted Solutionary security manager Chad Kahl.

"When you start going into the underground forums, they don't just sell a Zeus malware package, they'll sell you an entire command-and-control infrastructure and a phishing website to set up, and a drive-by-download website to set up.

"You go to them and it's CaaS (crime-as-a-service)" he explained. "It's truly script kiddies on a major scale."

Another reason why large providers may be having trouble stomping out amateur hackers on their service is that the criminals are moving rapidly between different clouds, Kahl said. "A lot of the malware operators bounce in between hosting providers, internet service providers and proxy hosts in different countries, and that's only part of the issue."

Worse, digital fingerprints of the viruses, Trojans and other software bugs hosted in public clouds are known and circulated in the infosec world, and can be used to identify malicious binaries, Kahl added.

"The question is, can these providers put the infrastructure in to scan everything?" he asked. Amazon and Google may be scrimping when it comes to investing in the tools needed to efficiently check the signatures of hosted files against databases of known evil binaries, he said.

"When we're talking about someone as big as Amazon or Google it would be a significant investment both in architecture and in time to go through and monitor everything as it's being put up, regular scans – to detect everything and take down these groups," the researcher said.

However, some companies are making good moves, such as Microsoft which has a number of malware-splatting initiatives.

Similarly, Google's new Project Zero team is tasked with hunting down security vulnerabilities in software before they are discovered and capitalized on by crooks.

As for Amazon, a spokesperson told us-- "AWS employs a number of mitigation techniques, both manual and automated, to prevent such misuse of these services.

"We have also added automatic systems in place that detect and block some attacks before they leave our infrastructure. Our terms of usage are clear and when we find misuse we take action quickly and shut it down. Companies that do see malicious activity originating from AWS should contact us immediately," he added.

In other internet security news

The U.S. National Institute of Standards and Technology (NIST) has been asked to hire more cryptography experts in order that it can confidently tell the NSA to abandon the idea.

A report from NIST's Visiting Committee on Advanced Technology (VCAT), which scrutinizes and advises the institute has criticized NIST for being too dependant on the NSA's cryptography expertise (or lack thereof).

VCAT cited the adoption and backing of the use of the buggy Dual EC DRBG algorithm, an NSA-sanctioned random number generator that was later found to be flawed.

To be sure, random numbers are crucial in cryptography, as they thwart an eavesdropper attempting to decrypt intercepted enciphered data.

The report was launched in the wake of allegations from whistleblower Edward Snowden that the NSA deliberately weakened Dual EC DRBG and other algorithms for surveillance purposes.

Despite having been warned about those insecurities several years ago, the report also reveals that NIST – which is part of the U.S. Department of Commerce – relied heavily on input from the NSA in maintaining the security standard.

VCAT members believe that to guard itself from such scandals in the future, NIST will need to become more transparent and better engage with the security community as a whole.

According to the VCAT report, a lack of qualified personnel was a key shortfall for the NIST. Without enough experts on hand, the institute was unable to spot and address the security vulnerabilities in the Dual EC DRBG and the SP 800-90 standard.

To remedy the problem, the steering committee is recommending that NIST hire additional staff versed in cryptography as well as reaching out to academic institutions and security vendors when building and analyzing encryption standards.

Additionally, it was also determined that NIST will need to sever its ties with the NSA for good. "NIST may seek the advice of the NSA on cryptographic matters but it must be in a position to assess it and reject it when warranted," the report suggests.

"This may be accomplished by NIST itself or by engaging the cryptographic community during the development and review of any particular standard," the report added.

And the report goes on to suggest other transparency measures as well, including the utilization of open competitions to build new standards and maintaining better documentation on how standards are developed.

NIST added that it would also continue to study the advisory board's findings ahead of releasing a new cryptographic standards report and some new guidelines regarding the development process by the end of 2014.

In other internet security news

Google is warning its users that bogus SSL certificates have been issued by India's National Information Centre (NIC).

Those certificates can be used by servers to masquerade as legitimate Google websites when they're not, and then eavesdrop or tamper with users' encrypted communications.

The internet connection would appear to be secure when in fact it's not. According Google's security team, it noticed unauthorized certificates for several Google domains that popped up last Wednesday and then traced them back to India's NIC.

What's troubling about this is that the issuer holds several intermediate CA certificates that are trusted by the Indian Controller of Certifying Authorities (India CCA) and also some Western companies.

"The India CCA certificates are included in the Microsoft Root Store and thus are trusted by the vast majority of programs running on Windows, including Internet Explorer and Chrome. Firefox is not affected because it uses its own root store that doesn't include these certificates," said Google security engineer Adam Langley.

"However, we are not aware of any other root stores that include the India CCA certificates, thus Chrome on other operating systems, Chrome OS, Android, iOS and OS X are not affected. Additionally, Chrome on Windows would not have accepted the certificates for Google sites because of public-key pinning, although mis-issued certificates for other sites may exist," Langley added.

Google engineers alerted both Indian agencies and Microsoft about the security issue, and the bogus certificates were revoked a day later. In the meantime, Google has revoked all the certificates using Chrome's CRL Set function and says its products are in the clear.

It also appears that Microsoft users are now covered. "We are aware of the mis-issued third-party certificates and we have not detected any of the certificates being issued against Microsoft domains," a Microsoft spokesperson said.

"We are taking all the necessary steps to help ensure that our customers remain protected at all times."

The India CCA is now running a full investigation to determine exactly what happened to lead to the certificates being issued, but it's not the first time that certification authorities have either been tricked into issuing bogus certificates, or hacked in a manner to achieve that goal.

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Source: The Nasdaq Stock Exchange.

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