Krebs on Security

A Shakeup in Russia’s Top Cybercrime Unit

January 28, 2017

A chief criticism I heard from readers of my book, Spam Nation: The Inside Story of Organized Cybercrime, was that it dealt primarily with petty crooks involved in petty crimes, while ignoring more substantive security issues like government surveillance and cyber war. But now it appears that the chief antagonist of Spam Nation is at the dead center of an international scandal involving the hacking of U.S. state electoral boards in Arizona and Illinois, the sacking of Russia’s top cybercrime investigators, and the slow but steady leak of unflattering data on some of Russia’s most powerful politicians.

Sergey Mikhaylov

In a major shakeup that could have lasting implications for transnational cybercrime investigations, it’s emerged that Russian authorities last month arrested Sergey Mikhaylov — the deputy chief of the country’s top anti-cybercrime unit — as well as Ruslan Stoyanov, a senior employee at Russian security firm Kaspersky Lab.

In a statement released to media, Kaspersky said the charges against Stoyanov predate his employment at the company beginning in 2012. Prior to Kaspersky, Stoyanov served as deputy director at a cybercrime investigation firm called Indrik, and before that as a major in the Russian Ministry of Interior’s Moscow Cyber Crime Unit.

In a move straight out of a Russian spy novel, Mikhaylov reportedly was arrested while in the middle of a meeting, escorted out of the room with a bag thrown over his head. Both men are being tried for treason. As a result, the government’s case against them is classified, and it’s unclear exactly what they are alleged to have done.

However, many Russian media outlets now report that the men are suspected of leaking information to Western investigators about investigations, and of funneling personal and often embarrassing data on Russia’s political elite to a popular blog called Humpty Dumpty (Шалтай-Болтай). Continue reading →

ATM ‘Shimmers’ Target Chip-Based Cards

January 27, 2017

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Several readers have called attention to warnings coming out of Canada about a supposedly new form of card skimming called “shimming” that targets chip-based credit and debit cards. Shimming attacks are not new (KrebsOnSecurity first wrote about them in August 2015), but they are likely to become more common as a greater number of banks in the United States shift to issuing chip-based cards. Here’s a brief primer on shimming attacks, and why they succeed.

Several shimmers recently found inside Canadian ATMs. Source: RCMP.

Several shimmers recently found inside Canadian point-of-sale devices. Source: RCMP.

Most skimming devices made to steal credit card data do so by recording the data stored in plain text on the magnetic stripe on the backs of cards. A shimmer, on the other hand, is so named because it acts a shim that sits between the chip on the card and the chip reader in the ATM or point-of-sale device — recording the data on the chip as it is read by the underlying machine.

Data collected by shimmers cannot be used to fabricate a chip-based card, but it could be used to clone a magnetic stripe card. Although the data that is typically stored on a card’s magnetic stripe is replicated inside the chip on chip-enabled cards, the chip contains an additional security components not found on a magnetic stripe.

One of those is a component known as an integrated circuit card verification value or “iCVV” for short — also known as a “dynamic CVV.” The iCVV differs from the card verification value (CVV) stored on the physical magnetic stripe, and protects against the copying of magnetic-stripe data from the chip and using that data to create counterfeit magnetic stripe cards.

A close-up of a shimmer found on a Canadian ATM. Source: RCMP.

A close-up of a shimmer found inside a point-of-sale device in Canada. Source: RCMP.

The reason shimmers exist at all is that some banks have apparently not correctly implemented the chip card standard, known as EMV (short for Europay, Mastercard and Visa).

“The only way for this attack to be successful is if a [bank card] issuer neglects to check the CVV when authorizing a transaction,” ATM giant NCR Corp. wrote in a 2016 alert to customers. “All issuers MUST make these basic checks to prevent this category of fraud. Card Shimming is not a vulnerability with a chip card, nor with an ATM, and therefore it is not necessary to add protection mechanisms against this form of attack to the ATM.” Continue reading →

Who is Anna-Senpai, the Mirai Worm Author?

January 18, 2017

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On September 22, 2016, this site was forced offline for nearly four days after it was hit with “Mirai,” a malware strain that enslaves poorly secured Internet of Things (IoT) devices like wireless routers and security cameras into a botnet for use in large cyberattacks. Roughly a week after that assault, the individual(s) who launched that attack — using the name “Anna-Senpai” — released the source code for Mirai, spawning dozens of copycat attack armies online.

After months of digging, KrebsOnSecurity is now confident to have uncovered Anna-Senpai’s real-life identity, and the identity of at least one co-conspirator who helped to write and modify the malware.

Mirai co-author Anna-Senpai leaked the source code for Mirai on Sept. 30, 2016.

Before we go further, a few disclosures are probably in order. First, this is easily the longest story I’ve ever written on this blog. It’s lengthy because I wanted to walk readers through my process of discovery, which has taken months to unravel. The details help in understanding the financial motivations behind Mirai and the botnet wars that preceded it. Also, I realize there are a great many names to keep track of as you read this post, so I’ve included a glossary.

The story you’re reading now is the result of hundreds of hours of research. At times, I was desperately seeking the missing link between seemingly unrelated people and events; sometimes I was inundated with huge amounts of information — much of it intentionally false or misleading — and left to search for kernels of truth hidden among the dross. If you’ve ever wondered why it seems that so few Internet criminals are brought to justice, I can tell you that the sheer amount of persistence and investigative resources required to piece together who’s done what to whom (and why) in the online era is tremendous.

As noted in previous KrebsOnSecurity articles, botnets like Mirai are used to knock individuals, businesses, governmental agencies, and non-profits offline on a daily basis. These so-called “distributed denial-of-service (DDoS) attacks are digital sieges in which an attacker causes thousands of hacked systems to hit a target with so much junk traffic that it falls over and remains unreachable by legitimate visitors. While DDoS attacks typically target a single Web site or Internet host, they often result in widespread collateral Internet disruption.

A great deal of DDoS activity on the Internet originates from so-called ‘booter/stresser’ services, which are essentially DDoS-for-hire services which allow even unsophisticated users to launch high-impact attacks. And as we will see, the incessant competition for profits in the blatantly illegal DDoS-for-hire industry can lead those involved down some very strange paths, indeed.

THE FIRST CLUES

The first clues to Anna-Senpai’s identity didn’t become clear until I understood that Mirai was just the latest incarnation of an IoT botnet family that has been in development and relatively broad use for nearly three years.

Earlier this summer, my site was hit with several huge attacks from a collection of hacked IoT systems compromised by a family of botnet code that served as a precursor to Mirai. The malware went by several names, including “Bashlite,” “Gafgyt,” “Qbot,” “Remaiten,” and “Torlus.”

All of these related IoT botnet varieties infect new systems in a fashion similar to other well-known Internet worms — propagating from one infected host to another. And like those earlier Internet worms, sometimes the Internet scanning these systems perform to identify other candidates for inclusion into the botnet is so aggressive that it constitutes an unintended DDoS on the very home routers, Web cameras and DVRs that the bot code is trying to subvert and recruit into the botnet. This kind of self-defeating behavior will be familiar to those who recall the original Morris Worm, NIMDA, CODE RED, Welchia, Blaster and SQL Slammer disruptions of yesteryear.

Infected IoT devices constantly scan the Web for other IoT things to compromise, wriggling into devices that are protected by little more than insecure factory-default settings and passwords. The infected devices are then forced to participate in DDoS attacks (ironically, many of the devices most commonly infected by Mirai and similar IoT worms are security cameras).

Mirai’s ancestors had so many names because each name corresponded to a variant that included new improvements over time. In 2014, a group of Internet hooligans operating under the banner “lelddos” very publicly used the code to launch large, sustained attacks that knocked many Web sites offline.

The most frequent target of the lelddos gang were Web servers used to host Minecraft, a wildly popular computer game sold by Microsoft that can be played from any device and on any Internet connection.

The object of Minecraft is to run around and build stuff, block by large pixelated block. That may sound simplistic and boring, but an impressive number of people positively adore this game – particularly pre-teen males. Microsoft has sold more than a 100 million copies of Minecraft, and at any given time there are over a million people playing it online. Players can build their own worlds, or visit a myriad other blocky realms by logging on to their favorite Minecraft server to play with friends.

Image: Minecraft.net

A large, successful Minecraft server with more than a thousand players logging on each day can easily earn the server’s owners upwards of $50,000 per month, mainly from players renting space on the server to build their Minecraft worlds, and purchasing in-game items and special abilities.

Perhaps unsurprisingly, the top-earning Minecraft servers eventually attracted the attention of ne’er-do-wells and extortionists like the lelddos gang. Lelddos would launch a huge DDoS attack against a Minecraft server, knowing that the targeted Minecraft server owner was likely losing thousands of dollars for each day his gaming channel remained offline.

Adding urgency to the ordeal, many of the targeted server’s loyal customers would soon find other Minecraft servers to patronize if they could not get their Minecraft fix at the usual online spot.

Robert Coelho is vice president of ProxyPipe, Inc., a San Francisco company that specializes in protecting Minecraft servers from attacks.

“The Minecraft industry is so competitive,” Coelho said. “If you’re a player, and your favorite Minecraft server gets knocked offline, you can switch to another server. But for the server operators, it’s all about maximizing the number of players and running a large, powerful server. The more players you can hold on the server, the more money you make. But if you go down, you start to lose Minecraft players very fast — maybe for good.”

In June 2014, ProxyPipe was hit with a 300 gigabit per second DDoS attack launched by lelddos, which had a penchant for publicly taunting its victims on Twitter just as it began launching DDoS assaults at the taunted.

The hacker group “lelddos” tweeted at its victims before launching huge DDoS attacks against them.

At the time, ProxyPipe was buying DDoS protection from Reston, Va. -based security giant Verisign. In a quarterly report published in 2014, Verisign called the attack the largest it had ever seen, although it didn’t name ProxyPipe in the report – referring to it only as a customer in the media and entertainment business.

Verisign said the 2014 attack was launched by a botnet of more than 100,000 servers running on SuperMicro IPMI boards. Days before the huge attack on ProxyPipe, a security researcher published information about a vulnerability in the SuperMicro devices that could allow them to be remotely hacked and commandeered for these sorts of attacks.

THE CENTRALITY OF PROTRAF

Coelho recalled that in mid-2015 his company’s Minecraft customers began coming under attack from a botnet made up of IoT devices infected with Qbot. He said the attacks were directly preceded by a threat made by a then-17-year-old Christopher “CJ” Sculti, Jr., the owner and sole employee of a competing DDoS protection company called Datawagon.

Datawagon also courted Minecraft servers as customers, and its servers were hosted on Internet space claimed by yet another Minecraft-focused DDoS protection provider — ProTraf Solutions.

Christopher “CJ” Sculti, Jr.

According to Coelho, ProTraf was trying to woo many of his biggest Minecraft server customers away from ProxyPipe. Coelho said in mid-2015, Sculti reached out to him on Skype and said he was getting ready to disable Coelho’s Skype account. At the time, an exploit for a software weakness in Skype was being traded online, and this exploit could be used to remotely and instantaneously disable any Skype account.

Sure enough, Coelho recalled, his Skype account and two others used by co-workers were shut off just minutes after that threat, effectively severing a main artery of support for ProxyPipe’s customers – many of whom were accustomed to communicating with ProxyPipe via Skype.

“CJ messaged me about five minutes before the DDoS started, saying he was going to disable my skype,” Coelho said. “The scary thing about when this happens is you don’t know if your Skype account has been hacked and under control of someone else or if it just got disabled.”

Once ProxyPipe’s Skype accounts were disabled, the company’s servers were hit with a massive, constantly changing DDoS attack that disrupted ProxyPipe’s service to its Minecraft server customers. Coelho said within a few days of the attack, many of ProxyPipe’s most lucrative Minecraft servers had moved over to servers protected by ProTraf Solutions.

“In 2015, the ProTraf guys hit us offline tons, so a lot of our customers moved over to them,” Coelho said. “We told our customers that we knew [ProTraf] were the ones doing it, but some of the customers didn’t care and moved over to ProTraf anyway because they were losing money from being down.”

I found Coelho’s story fascinating because it eerily echoed the events leading up to my Sept. 2016 record 620 Gbps attack. I, too, was contacted via Skype by Sculti — on two occasions. The first was on July 7, 2015, when Sculti reached out apropos of nothing to brag about scanning the Internet for IoT devices running default usernames and passwords, saying he had uploaded some kind of program to more than a quarter-million systems that his scans found.

Here’s a snippet of that conversation:

July 7, 2015:

21:37 CJ: http://krebsonsecurity.com/2015/06/crooks-use-hacked-routers-to-aid-cyberheists/
21:37 CJ: vulnerable routers are a HUGE issue
21:37 CJ: a few months ago
21:37 CJ: I scanned the internet with a few sets of defualt logins
21:37 CJ: for telnet
21:37 CJ: and I was able to upload and execute a binary
21:38 CJ: on 250k devices
21:38 CJ: most of which were routers
21:38 Brian Krebs: o_0

The second time I heard from Sculti on Skype was Sept. 20, 2016 — the day of my 620 Gbps attack. Sculti was angry over a story I’d just published that mentioned his name, and he began rather saltily maligning the reputation of a source and friend who had helped me with that story.

Indignant on behalf of my source and annoyed at Sculti’s rant, I simply blocked his Skype account from communicating with mine and went on with my day. Just minutes after that conversation, however, my Skype account was flooded with thousands of contact requests from compromised or junk Skype accounts, making it virtually impossible to use the software for making phone calls or instant messaging.

Six hours after that Sept. 20 conversation with Sculti, the huge 620 Gbps DDoS attack commenced on this site. Continue reading →

Adobe, Microsoft Push Critical Security Fixes

January 11, 2017

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Adobe and Microsoft on Tuesday each released security updates for software installed on hundreds of millions of devices. Adobe issued an update for Flash Player and for Acrobat/Reader. Microsoft released just four updates to plug some 15 security holes in Windows and related software.

brokenwindows Microsoft’s batch includes updates for Windows, Office and Microsoft Edge (Redmond’s replacement for Internet Explorer). Also interesting is that January 2017 is the last month Microsoft plans to publish individual bulletins for each patch. From now on, some of the data points currently in the individual updates will be lumped into a “Security Updates Guide” published with each Patch Tuesday.

This change mirrors a shift in the way Microsoft is deploying updates. Last year Microsoft stopped making individual security updates available for home users, giving those users instead a single monthly security rollup that includes all available security updates.

Windows users and anyone else with Flash installed will need to make sure that Adobe Flash Player is updated (or suitably bludgeoned, more on that in a bit). Adobe’s Flash update addresses 13 flaws in the widely-installed browser plugin. The patch brings Flash to v. 24.0.0.194 for Windows, Mac and Linux users alike. Continue reading →

Extortionists Wipe Thousands of Databases, Victims Who Pay Up Get Stiffed

January 10, 2017

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Tens of thousands of personal and possibly proprietary databases that were left accessible to the public online have just been wiped from the Internet, replaced with ransom notes demanding payment for the return of the files. Adding insult to injury, it appears that virtually none of the victims who have paid the ransom have gotten their files back because multiple fraudsters are now wise to the extortion attempts and are competing to replace each other’s ransom notes.

At the eye of this developing data destruction maelstrom is an online database platform called MongoDB. Tens of thousands of organizations use MongoDB to store data, but it is easy to misconfigure and leave the database exposed online. If installed on a server with the default settings, for example, MongoDB allows anyone to browse the databases, download them, or even write over them and delete them.

Shodan, a specialized search engine designed to find things that probably won’t be picked up by Google, lists the number of open, remotely accessible MongDB databases available as of Jan. 10, 2017.

This blog has featured several stories over the years about companies accidentally publishing user data via incorrectly configured MongoDB databases. In March 2016, for example, KrebsOnSecurity broke the news that Verizon Enterprise Solutions managed to leak the contact information on some 1.5 million customers because of a publicly accessible MongoDB installation.

Point is, this is a known problem, and almost once a week some security researcher is Tweeting that he’s discovered another huge open MongoDB database. There are simple queries that anyone can run via search engines like Shodan that will point to all of the open MongoDB databases out there at any given time. For example, the latest query via Shodan (see image above) shows that there are more than 52,000 publicly accessible MongoDB databases on the Internet right now. The largest share of open MongoDB databases are here in the United States.

Normally, when one runs a query on Shodan to list all available MongoDB databases, what one gets in return is a list of variously-named databases, and many databases with default filenames like “local.”

But when researcher Victor Gevers ran that same query earlier this week, he noticed that far too many of the database listings returned by the query had names like “readme,” “readnow,” “encrypted” and “readplease.” Inside each of these databases is exactly one file: a database file that includes a contact email address and/or a bitcoin address and a payment demand.

Researcher Niall Merrigan, a solutions architect for French consulting giant Cap Gemini, has been working with Gevers to help victims on his personal time, and to help maintain a public document that’s live-chronicling the damage from the now widespread extortion attack. Merrigan said it seems clear that multiple actors are wise to the scam because if you wait a few minutes after running the Shodan query and then re-run the query, you’ll find the same Internet addresses that showed up in the database listings from the previous query, but you’ll also notice that many now have a different database title and a new ransom note.

Merrigan and Gevers are maintaining a public Google Drive document (read-only) that is tracking the various victims and ransom demands. Merrigan said it appears that at least 29,000 MongoDB databases that were previously published online are now erased. Worse, hardly anyone who’s paid the ransom demands has yet received their files back.

A screen shot of the Google Drive document that Merrigan is maintaining to track the various ransom campaigns. This tab lists victims by industry. As we can see, many have paid the ransom but none have reported receiving their files back.

“It’s like the kidnappers keep delivering the ransom notes, but you don’t know who has the actual original data,” Merrigan said. “That’s why we’re tracking the notes, so that if we see the [databases] are being exfiltrated by the thieves, we can know the guys who should actually get paid if they want to get their data back.” Continue reading →

Krebs’s Immutable Truths About Data Breaches

January 9, 2017

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I’ve had several requests for a fresh blog post to excerpt something that got crammed into the corner of a lengthy story published here Sunday: A list of immutable truths about data breaches, cybersecurity and the consequences of inaction.

Here’s the excerpt requested from yesterday’s story:

coecopy “There are some fairly simple, immutable truths that each of us should keep in mind, truths that apply equally to political parties, organizations and corporations alike:

-If you connect it to the Internet, someone will try to hack it.

-If what you put on the Internet has value, someone will invest time and effort to steal it.

-Even if what is stolen does not have immediate value to the thief, he can easily find buyers for it.

-The price he secures for it will almost certainly be a tiny slice of its true worth to the victim.

-Organizations and individuals unwilling to spend a small fraction of what those assets are worth to secure them against cybercrooks can expect to eventually be relieved of said assets.”

They may not be complete, but as a set of truisms these tenets probably will age pretty well. After all, taken as a whole they are practically a model Cybercriminal Code of Ethics, or a cybercrook’s social contract. Continue reading →

DNI: Putin Led Cyber, Propaganda Effort to Elect Trump, Denigrate Clinton

January 8, 2017

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Russian President Vladimir Putin directed a massive propaganda and cyber operation aimed at discrediting Hillary Clinton and getting Donald Trump elected, the top U.S. intelligence agencies said in a remarkable yet unshocking report released on Friday.

Russian President Vladimir Putin tours RT facilities. Image: DNI

The 25-page dossier from the Office of the Director of National Intelligence stopped short of saying the Russians succeeded at influencing the outcome of the election, noting that the report did not attempt to make an assessment on that front. But it makes the case that “Russia’s intelligence services conducted cyber operations against targets associated with the 2016 US presidential election, including targets associated with both major US political parties.”

“We assess with high confidence that Russian military intelligence (General Staff Main Intelligence Directorate or GRU) used the Guccifer 2.0 persona and DCLeaks.com to release US victim data obtained in cyber operations publicly and in exclusives to media outlets and relayed material to WikiLeaks,” the DNI report reads.

The report is a quick and fascinating read. One example: It includes a fairly detailed appendix which concludes that the U.S.-based but Kremlin-financed media outlet RT (formerly Russia Today) is little more than a propaganda machine controlled by Russian intelligence agencies.

“Moscow’s influence campaign followed a Russian messaging strategy that blends covert intelligence operations—such as cyber activity—with overt efforts by Russian Government agencies, state-funded media, third-party intermediaries, and paid social media users or ‘trolls,'” reads the report.

The DNI report is remarkable for several reasons. First, it publicly accuses Russia’s President of trying to meddle with the U.S. election and to hack both political parties. Also, as The New York Times observed, it offers “a virtually unheard-of, real-time revelation by the American intelligence agencies that undermined the legitimacy of the president who is about to direct them.”

However, those who’ve been clamoring for more technical evidence to support a conclusion that Russian intelligence agencies were behind the phishing, malware attacks and email leaks at The Democratic National Committee (DNC) and Clinton campaign likely will be unmoved by this report. Those details will remain safely hidden from public view in the classified version of the report.

Last week, the FBI and Department of Homeland Security issued a joint report (PDF) on some of the malware and Internet resources used in the DNC intrusion. But many experts criticized it as a poorly-written, jumbled collection of threat indicators and digital clues that didn’t all quite lead where they should.

Others were perplexed by the high confidence level the agencies assigned to the findings in their unclassified report, noting that neither the FBI nor DHS examined the DNC hard drives that were compromised in the break-in (that work was done by private security firm Crowdstrike).

Former black-hat hacker turned Wired and Daily Beast contributing editor Kevin Poulsen slammed the FBI/DHS report as “so aimless that it muddies the clear public evidence that Russia hacked the Democratic Party to affect the election, and so wrong it enables the Trump-friendly conspiracy theorists trying to explain away that evidence.”

Granted, trying to reconstruct a digital crime scene absent some of the most important pieces of evidence is a bit like attempting to assemble a jigsaw puzzle with only half of the pieces. But as digital forensics and security expert Jonanthan Zdziarksi noted via Twitter last night, good old fashioned spying and human intelligence seems to have played a bigger role in pinning the DNC hack on the Russians.

“The DNI report subtly implied that more weight was put on our intelligence coming from espionage operations than on cyber warfare,” Zdziarski wrote. “As someone who’s publicly called out the FBI over misleading the public and the court system, I believe the DNI report to be reliable. I also believe @CrowdStrike’s findings to be reliable based on the people there and their experience with threat intelligence.”

Key findings from the DNI report.

Continue reading →

Stolen Passwords Fuel Cardless ATM Fraud

January 5, 2017

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Some financial institutions are now offering so-called “cardless ATM” transactions that allow customers to withdraw cash using nothing more than their mobile phones. But as the following story illustrates, this new technology also creates an avenue for thieves to quickly and quietly convert stolen customer bank account usernames and passwords into cold hard cash. Worse still, fraudulent cardless ATM withdrawals may prove more difficult for customers to dispute because they place the victim at the scene of the crime.

A portion of the third rejection letter that Markula received from Chase about her $2,900 fraud claim.

San Francisco resident Kristina Markula told KrebsOnSecurity that it wasn’t until shortly after a vacation in Cancun, Mexico in early November 2016 that she first learned that Chase Bank even offered cardless ATM access. Markula said that while she was still in Mexico she tried to view her bank balance using a Chase app on her smartphone, but that the app blocked her from accessing her account.

Markula said she thought at the time that Chase had blocked her from using the app because the request came from an unusual location. After all, she didn’t have an international calling or data plan and was trying to access the account via Wi-Fi at her hotel in Mexico.

Upon returning to the United States, Markula called the number on the back of her card and was told she needed to visit the nearest Chase bank branch and present two forms of identification. At a Chase branch in San Francisco, she handed the teller a California driver’s license and her passport. The branch manager told her that someone had used her Chase online banking username and password to add a new mobile phone number to her account, and then move $2,900 from her savings to her checking account.

The manager told Markula that whoever made the change then requested that a new mobile device be added to the account, and changed the contact email address for the account. Very soon after, that same new mobile device was used to withdraw $2,900 in cash from her checking account at the Chase Bank ATM in Pembroke Pines, Fla.

A handful of U.S. banks, including Chase, have deployed ATMs that are capable of dispensing cash without requiring an ATM card. In the case of Chase ATMs, the customer approaches the cash machine with a smart phone that is already associated with a Chase account. Associating an account with the mobile app merely requires the customer to supply the app with their online banking username and password.

Users then tell the Chase app how much they want to withdraw, and the app creates a unique 7-digit code that needs to be entered at the Chase ATM (instead of numeric code, some banks offering cardless ATM withdrawals will have the app display a QR code that needs to be read by a scanner on the ATM). Assuming the code checks out, the machine dispenses the requested cash and the transaction is complete. At no time is the Chase customer asked to enter his or her 4-digit ATM card PIN.

Most financial institutions will limit traditional ATM customers to withdrawing $300-$600 per transaction, but some banks have set cardless transaction limits at much higher amounts under certain circumstances. For example, at the time Markula’s fraud occurred, the limit was set at $3,000 for withdrawals during normal bank business hours and made at Chase ATMs located at Chase branches.

Markula said the bank employees helped her close the account and file a claim to dispute the withdrawal. She said the teller and the bank manager reviewed her passport and confirmed that the disputed transaction took place during the time between which her passport was stamped by U.S. and Mexican immigration authorities. However, Markula said Chase repeatedly denied her claims.

“We wanted to thank you for providing your information while we thoroughly researched your dispute,” Chase’s customer claims department wrote in the third rejection letter sent to Markula, dated January 5, 2017. “We confirmed that the disputed charges were correct and we will not be making an adjustment to your account.”

Markula said she was dumbfounded by the rejection letter because the last time she spoke with a fraud claims manager at Chase, the manager told her that the transaction had all of the hallmarks of an account takeover.

“I’m pretty frustrated at the process so far,” said Markula, who shared with this author a detailed timeline of events before and after the disputed transaction. “Not captured in this timeline are the countless phone calls to the fraud department which is routed overseas. The time it takes to reach someone and poor communication seems designed to make one want to give up.”

KrebsOnSecurity contacted Chase today about Markula’s case. Chase spokesman Mike Fusco said Markula’s rejection letter was incorrect, and that further investigation revealed she had been victimized by a group of a half-dozen fraudsters who were caught using the above-described technique to empty out Chase bank accounts.

Fusco forwarded this author a link to a Fox28 story about six men from Miami, Fla. who were arrested late last year in Columbus, Ohio in connection with what authorities there called a “multi-state crime spree” targeting Chase accounts. Continue reading →

The FTC’s Internet of Things (IoT) Challenge

January 4, 2017

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One of the biggest cybersecurity stories of 2016 was the surge in online attacks caused by poorly-secured “Internet of Things” (IoT) devices such as Internet routers, security cameras, digital video recorders (DVRs) and smart appliances. Many readers here have commented with ideas about how to counter vulnerabilities caused by out-of-date software in IoT devices, so why not pitch your idea for money? Who knows, you could win up to $25,000 in a new contest put on by the U.S. Federal Trade Commission (FTC).

Electronics giant LG said at the Consumer Electronics Show (CES) today that all of its devices from now on will have Wi-Fi built in. Image: @Karissabe

Electronics giant LG said today at the Consumer Electronics Show (CES) that all of its appliances from now on will have Wi-Fi built in and be connected to the cloud. Image: Mashable

The FTC’s IoT Home Inspector Challenge is seeking ideas for a tool of some sort that would address the burgeoning IoT mess. The agency says it’s offering a cash prize of up to $25,000 for the best technical solution, with up to $3,000 available for as many as three honorable mention winner(s). Continue reading →

The Download on the DNC Hack

January 3, 2017

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Over the past few days, several longtime readers have asked why I haven’t written about two stories that have consumed the news media of late: The alleged Russian hacking attacks against the U.S. Democratic National Committee (DNC) and, more recently, the discovery of malware on a laptop at a Vermont power utility that has been attributed to Russian hacker groups.

I’ve avoided covering these stories mainly because I don’t have any original reporting to add to them, and because I generally avoid chasing the story of the day — preferring instead to focus on producing original journalism on cybercrime and computer security.

dnc But there is another reason for my reticence: Both of these stories are so politically fraught that to write about them means signing up for gobs of vitriolic hate mail from readers who assume I have some political axe to grind no matter what I publish on the matter.

An article in Rolling Stone over the weekend aptly captures my unease with reporting on both of these stories in the absence of new, useful information (the following quote refers specifically to the Obama administration’s sanctions against Russia related to the DNC incident).

“The problem with this story is that, like the Iraq-WMD mess, it takes place in the middle of a highly politicized environment during which the motives of all the relevant actors are suspect,” Rolling Stone political reporter Matt Taibbi wrote. “Absent independent verification, reporters will have to rely upon the secret assessments of intelligence agencies to cover the story at all. Many reporters I know are quietly freaking out about having to go through that again.”

Alas, one can only nurse a New Year’s holiday vacation for so long. Here are some of the things I’ve been ruminating about over the past few days regarding each of these topics. Please be kind.

Gaining sufficient public support for a conclusion that other countries are responsible for hacking important U.S. assets can be difficult – even when the alleged aggressor is already despised and denounced by the entire civilized world.

The remarkable hacking of Sony Pictures Entertainment in late 2014 and the Obama administration’s quick fingering of hackers in North Korea as the culprits is a prime example: When the Obama administration released its findings that North Korean hackers were responsible for breaking into SPE, few security experts I spoke to about the incident were convinced by the intelligence data coming from the White House.

That seemed to change somewhat following the leak of a National Security Agency document which suggested the United States had planted malware capable of tracking the inner workings of the computers and networks used by the North’s hackers. Nevertheless, I’d wager that if we took a scientific poll among computer security experts today, a fair percentage of them probably still strongly doubt the administration’s conclusions.

If you were to ask those doubting experts to explain why they persist in their unbelief, my guess is you would find these folks break down largely into two camps: Those who believe the administration will never release any really detailed (and likely classified) information needed to draw a more definitive conclusion, and those who because of their political leanings tend to disbelieve virtually everything that comes out of the current administration.

Now, the American public is being asked to accept the White House’s technical assessment of another international hacking incident, only this time the apparent intention of said hacking is nothing less than to influence the outcome of a historically divisive presidential election in which the sitting party lost.

It probably doesn’t matter how many indicators of compromise and digital fingerprints the Obama administration releases on this incident: Chances are decent that if you asked a panel of security experts a year from now whether the march of time and additional data points released or leaked in the interim have influenced their opinion, you’ll find them just as evenly divided as they are today.

The mixed messages coming from the camp of President-elect Trump haven’t added any clarity to the matter, either. Trump has publicly mocked American intelligence assessments that Russia meddled with the U.S. election on his behalf, and said recently that he doubts the U.S. government can be certain it was hackers backed by the Russian government who hacked and leaked emails from the DNC.

However, one of Trump’s top advisers — former CIA Director James Woolsey — now says he believes the Russians (and possibly others) were in fact involved in the DNC hack.

It’s worth noting that the U.S. government has offered some additional perspective on why it is so confident in its conclusion that Russian military intelligence services were involved in the DNC hack. A White House fact sheet published alongside the FBI/DHS Joint Analysis Report (PDF) says the report “includes information on computers around the world that Russian intelligence services have co-opted without the knowledge of their owners in order conduct their malicious activity in a way that makes it difficult to trace back to Russia. In some cases, the cybersecurity community was aware of this infrastructure, in other cases, this information is newly declassified by the U.S. government.” Continue reading →

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