Krebs on Security

Three Charged in Connection with ‘Gozi’ Trojan

January 23, 2013

Federal prosecutors today announced criminal charges against three men alleged to be responsible for creating and distributing the Gozi Trojan, an extremely sophisticated strain of malicious software that was sold to cyber crooks and was tailor-made to attack specific financial institutions targeted by each buyer.

According to charging documents filed in the U.S. District Court for the Southern District of New York, authorities believe Gozi was the creation of Nikita Kuzmin, a 25-year-old Russian national. Authorities say Kuzmin was aided by 27-year-old Latvian resident Deniss “Miami” Calovskis, and Mihai Ionut Paunescu, a 28-year-0ld Romanian national who allegedly used the screen name “Virus”.

A press conference announcement sent to reporters today by the office of New York U.S. Attorney Preet Bharara states that Gozi infected more than one million computers — at least 40,000 of which were in the United States — and caused millions of dollars in losses. Bharara’s office called Gozi “one of the most financially destructive computer viruses in history.”

The charges include bank-fraud conspiracy, conspiracy to commit computer intrusion, wire-fraud conspiracy. Kuzmin was arrested in California in Nov. 2010; Calovskis was arrested in Latvia in Nov. 2012; Paunescu was arrested in last month in Romania.

76Service login page

First discovered in early 2007, the Gozi Trojan is a stealthy cybertheft tool that typically evades anti-virus detection for weeks — sometimes months — at a time. Cyber forensics experts say Gozi has remained a potent threat, mainly because its author has been very selective in choosing new customers and fastidious in creating custom, undetectable versions of the malware.

For all the Trojan’s sophistication, however, investigators say it was merely the delivery vehicle for the author’s real moneymaking machine: A software-as-a-service fraud scheme called “76 Service.” According to authorities, Kuzmin marketed the service on highly-vetted cyber criminal forums online, offering customers a soup-to-nuts crime machine that automated the processes of robbing online banking customers. Incredibly, this turnkey system even automated the ready supply of so-called “money mules,” willing or unwitting individuals recruited through work-at-home job scams to help thieves launder stolen funds.

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Polish Takedown Targets ‘Virut’ Botnet

January 18, 2013

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Security experts in Poland on Thursday quietly seized domains used to control the Virut botnet, a huge army of hacked PCs that is custom-built to be rented out to cybercriminals.

Source: Symantec

NASK, the domain registrar that operates the “.pl” Polish top-level domain registry, said that on Thursday it began assuming control over 23 .pl domains that were being used to operate the Virut network. The company has redirected traffic from those domains to sinkhole.cert.pl, a domain controlled by CERT Polska — an incident response team run by NASK. The company says it will be working with Internet service providers and security firms to help alert and clean up affected users.

“Since 2006, Virut has been one of the most disturbing threats active on the Internet,” CERT Polska wrote. “The scale of the phenomenon was massive: in 2012 for Poland alone, over 890 thousand unique IP addresses were reported to be infected by Virut.”

Some of the domains identified in the takedown effort — including ircgalaxy.pl and zief.pl — have been used as controllers for nearly half a decade. During that time, Virut has emerged as one of the most common and pestilent threats. Security giant Symantec recently estimated Virut’s size at 300,000 machines; Russian security firm Kaspersky said Virut was responsible for 5.5 percent of malware infections in the third quarter of 2012.

The action against Virut comes just days after Symantec warned that Virut had been used to redeploy Waledac, a spam botnet that was targeted in a high-profile botnet takedown by Microsoft in 2010.

SELF-PERPETUATING CRIME MACHINE

A file-infecting virus that has long been used to steal information from infected PCs, Virut is often transmitted via removable drives and file-sharing networks. But in recent years, it has become one of the most reliable engines behind massive malware deployment systems known as pay-per-install (PPI) networks. One such example was “exerevenue.com,” a popular PPI network that once shared Internet resources with the aforementioned .pl domains.

PPI networks attract entrepreneurial malware distributors, hackers who are given custom “installer” programs that bundle malware and adware. In return, the distributors are paid a set amount for each 1,000 times their installer programs are run on new PCs. Access to the PPI networks is sold to miscreants in the underground, particularly spammers who are looking to increase the size of their spam botnets. Those clients submit their malware—a spambot, fake antivirus software, or password-stealing Trojan—to the PPI service, which in turn charges varying rates per thousand successful installations, depending on the requested geographic location of the desired victims.

The Exerevenue.com PPI program died off in 2010, but cached copies of the site offer a fascinating glimpse into the Virut business model. The following snippet of text was taken from Exerevenue’s software end-user license agreement (EULA, and yes, this malware had a EULA). It aptly described how Virut worked: As a file-infecting virus that injected copies of itself into all .EXE and .HTML files found on victim PCs. According to the Exerevenue administrators, the program’s installer relied on a trademarked “QuickBundle™” technology that bundled adware with other programs.

“3) The software will especially target .EXE and .HTML files in the process of bundling. Other types of files may also be affected. HTML files are bundled with adware indirectly, through Internet links, and it relies upon certain features of Web browsers that are often considered undesired. Therefore, you agree you will not deliver your bundled files to anyone who can be offended by the QuickBundle technology described earlier. In order to prevent a file from being bundled with adware, you can change its name to begin with PSTO or WINC (in case of .EXE and .SCR files) or change its extension (in case of .HTM(heart), .ASP, and .PHP files), for example to .TXT. Apart from enriching your files with ad-supported content, your Windows HOSTS file will be modified to block certain domains used for adware loading automatization.”

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New Java Exploit Fetches $5,000 Per Buyer

January 16, 2013

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Less than 24 hours after Oracle patched a dangerous security hole in its Java software that was being used to seize control over Windows PCs, miscreants in the Underweb were already selling an exploit for a different and apparently still-unpatched zero-day vulnerability in Java, KrebsOnSecurity has learned.

Update, Apr. 2, 2:57 p.m. ET: This sales thread turned out to be an elaborate hoax designed by a cybercrime forum administrator to learn the screen name I was using to browse exclusive sections of his forum. See this story for more information on that.

Original story:

On Sunday, Oracle rushed out a fix for a critical bug in Java that had been folded into exploit kits, crimeware made to automate the exploitation of computers via Web browser vulnerabilities. On Monday, an administrator of an exclusive cybercrime forum posted a message saying he was selling a new Java 0day to a lucky two buyers. The cost: starting at $5,000 each.

The hacker forum admin’s message, portions of which are excerpted below, promised weaponized and source code versions of the exploit. This seller also said his Java 0day — in the latest version of Java (Java 7 Update 11) — was not yet part of any exploit kits, including the Cool Exploit Kit I wrote about last week that rents for $10,000 per month. From his sales pitch:

“New Java 0day, selling to 2 people, 5k$ per person

And you thought Java had epically failed when the last 0day came out. I lol’d. The best part is even-though java has failed once again and let users get compromised… guess what? I think you know what I’m going to say… there is yet another vulnerability in the latest version of java 7. I will not go into any details except with seriously interested buyers.

Code will be sold twice (it has been sold once already). It is not present in any known exploit pack including that very private version of [Blackhole] going for 10$k/month. I will accepting counter bids if you wish to outbid the competition. What you get? Unencrypted source files to the exploit (so you can have recrypted as necessary, I would warn you to be cautious who you allow to encrypt… they might try to steal a copy) Encrypted, weaponized version, simply modify the url in the php page that calls up the jar to your own executable url and you are set. You may pm me.” Continue reading →

Spam Volumes: Past & Present, Global & Local

January 15, 2013

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Last week, National Public Radio aired a story on my Pharma Wars series, which chronicles an epic battle between men who ran two competing cybercrime empires that used spam to pimp online pharmacy sites. As I was working with the NPR reporter on the story, I was struck by how much spam has decreased over the past couple of years.

Below is a graphic that’s based on spam data collected by Symantec‘s MessageLabs. It shows that global spam volumes fell and spiked fairly regularly, from highs of 6 trillion messages sent per month to just below 1 trillion. I produced this graph based on Symantec’s raw spam data.

Some of the points on the graph where spam volumes fall precipitously roughly coincide with major disruptive events, such as the disconnection of rogue ISPs McColo Corp. and 3FN, as well as targeted takedowns against major spam botnets, including Bredolab, Rustock and Grum. Obviously, this graph shows a correlation to those events, not a direct causation; there may well have been other events other than those mentioned that caused decreases in junk email volumes worldwide. Nevertheless, it is clear that the closure of the SpamIt affiliate program in the fall of 2010 marked the beginning of a steep and steady decline of spam volumes that persists to this day.

Of course, spam volumes are relative, depending on where you live and which providers you rely on for email and connections to the larger Internet. As I was putting together these charts, I also asked for spam data from Cloudmark, a San Francisco-based email security firm. Their data (shown in the graphs below) paint a very interesting picture of the difference in percentage of email that is spam coming from users of the top three email services: The spam percentages were Yahoo! (22%), Microsoft (11%) and Google (6%).

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Microsoft Issues Fix for Zero-Day IE Flaw

January 14, 2013

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Microsoft today deviated from its usual monthly patch cycle in issuing an emergency security update to fix a critical security hole in its Internet Explorer Web browser that attackers have been exploiting to break into Windows PCs.

The update, MS13-008, addresses a single vulnerability in IE versions 6 through 8, and is available through Windows Update. The patch comes a little more than two weeks after security firms began seeing evidence that hackers were leveraging the vulnerability in targeted attacks. Microsoft maintains that it has seen only a limited number of attacks against the flaw, but acknowledged in a blog post that “the potential exists that more customers could be affected.”

Prior to today, Microsoft released a stopgap Fix It tool to help blunt attacks against the IE flaw. According to Microsoft, “if you previously applied the Fix it offered through the advisory, you do not need to uninstall it before applying the security update released today. However, the Fix it is no longer needed after the security update is installed, so we are recommending that you uninstall it after you have applied the update to your system.” Users who applied the Fix It solution can uninstall it by clicking the Fix It icon under the words “Disable MSHTML shim workaround” at this page.

Oracle Ships Critical Security Update for Java

January 13, 2013

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Oracle has released a software update to fix a critical security vulnerability in its Java software that miscreants and malware have been exploiting to break into vulnerable computers.

Java 7 Update 11 fixes a critical flaw (CVE-2013-0422) in Java 7 Update 10 and earlier versions of Java 7. The update is available via Oracle’s Web site, or can be downloaded from with Java via the Java Control Panel. Existing users should be able to update by visiting the Windows Control Panel and clicking the Java icon, or by searching for “Java” and clicking the “Update Now” button from the Update tab.

This update also changes the way Java handles Web applications. According to Oracle’s advisory: “The default security level for Java applets and web start applications has been increased from “Medium” to “High”. This affects the conditions under which unsigned (sandboxed) Java web applications can run. Previously, as long as you had the latest secure Java release installed applets and web start applications would continue to run as always. With the “High” setting the user is always warned before any unsigned application is run to prevent silent exploitation.”

It’s nice that Oracle fixed this vulnerability so quickly, but I’ll continue to advise readers to junk this program altogether unless they have a specific need for it. For one thing, Oracle tried (and failed) to fix this flaw in an earlier update. Also, it seems malware writers are constantly finding new zero-day vulnerabilities in Java, and I would not be surprised to see this zero-day situation repeat itself in a month or so. Also, most users who have Java installed can get by just fine without it (businesses often have mission-critical operations that rely on Java).

If you need Java for a specific Web site, consider adopting a two-browser approach. If you normally browse the Web with Firefox, for example, consider disabling the Java plugin in Firefox, and then using an alternative browser (Chrome, IE9, Safari, etc.) with Java enabled to browse only the site(s) that require(s) it.

What You Need to Know About the Java Exploit

January 12, 2013

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On Thursday, the world learned that attackers were breaking into computers using a previously undocumented security hole in Java, a program that is installed on hundreds of millions of computers worldwide. This post aims to answer some of the most frequently asked questions about the vulnerability, and to outline simple steps that users can take to protect themselves.

Update, Jan. 13, 8:14 p.m. ET: Oracle just released a patch to fix this vulnerability. Read more here.

Q: What is Java, anyway?
A: Java is a programming language and computing platform that powers programs including utilities, games, and business applications. According to Java maker Oracle Corp., Java runs on more than 850 million personal computers worldwide, and on billions of devices worldwide, including mobile and TV devices. It is required by some Web sites that use it to run interactive games and applications.

Q: So what is all the fuss about?
A: Researchers have discovered that cybercrooks are attacking a previously unknown security hole in Java 7 that can be used to seize control over a computer if a user visits a compromised or malicious Web site.

Q: Yikes. How do I protect my computer?
A: The version of Java that runs on most consumer PCs includes a browser plug-in. According to researchers at Carnegie Mellon University‘s CERT, unplugging the Java plugin from the browser essentially prevents exploitation of the vulnerability. Not long ago, disconnecting Java from the browser was not straightforward, but with the release of the latest version of Java 7 — Update 10 — Oracle included a very simple method for removing Java from the browser. You can find their instructions for doing this here.

Q: How do I know if I have Java installed, and if so, which version?
A: The simplest way is to visit this link and click the “Do I have Java” link, just below the big red “Download Java” button.

Q: I’m using Java 6. Does that mean I don’t have to worry about this?
A: There have been conflicting findings on this front. The description of this bug at the National Vulnerability Database (NVD), for example, states that the vulnerability is present in Java versions going back several years, including version 4 and 5. Analysts at vulnerability research firm Immunity say the bug could impact Java 6 and possibly earlier versions. But Will Dormann, a security expert who’s been examining this flaw closely for CERT, said the NVD’s advisory is incorrect: CERT maintains that this vulnerability stems from a component that Oracle introduced with Java 7. Dormann points to a detailed technical analysis of the Java flaw by Adam Gowdiak of Security Explorations, a security research team that has alerted Java maker Oracle about a large number of flaws in Java. Gowdiak says Oracle tried to fix this particular flaw in a previous update but failed to address it completely.

Either way, it’s important not to get too hung up on which versions are affected, as this could become a moving target. Also, a new zero-day flaw is discovered in Java several times a year. That’s why I’ve urged readers to either uninstall Java completely or unplug it from the browser no matter what version you’re using.

Q: A site I use often requires the Java plugin to be enabled. What should I do?
A: You could downgrade to Java 6, but that is not a very good solution. Oracle will stop supporting Java 6 at the end of February 2013, and will soon be transitioning Java 6 users to Java 7 anyway. If you need Java for specific Web sites, a better solution is to adopt a two-browser approach. If you normally browse the Web with Firefox, for example, consider disabling the Java plugin in Firefox, and then using an alternative browser (Chrome, IE9, Safari, etc.) with Java enabled to browse only the site(s) that require(s) it.

Q: I am using a Mac, so I should be okay, right?
A: Not exactly. Experts have found that this flaw in Java 7 can be exploited to foist malware on Mac and Linux systems, in addition to Microsoft Windows machines. Java is made to run programs across multiple platforms, which makes it especially dangerous when new flaws in it are discovered. For instance, the Flashback worm that infected more than 600,000 Macs wiggled into OS X systems via a Java flaw. Oracle’s instructions include advice on how to unplug Java from Safari. I should note that Apple has not provided a version of Java for OS X beyond 6, but users can still download and install Java 7 on Mac systems. However, it appears that in response to this threat, Apple has taken steps to block Java from running on OS X systems.

Q: I don’t browse random sites or visit dodgy porn sites, so I shouldn’t have to worry about this, correct?
A: Wrong. This vulnerability is mainly being exploited by exploit packs, which are crimeware tools made to be stitched into Web sites so that when visitors come to the site with vulnerable/outdated browser plugins (like this Java bug), the site can silently install malware on the visitor’s PC. Exploit packs can be just as easily stitched into porn sites as they can be inserted into legitimate, hacked Web sites. All it takes is for the attackers to be able to insert one line of code into a compromised Web site.

Q: I’ve read in several places that this is the first time that the U.S. government has urged computer users to remove or wholesale avoid using a particular piece of software because of a widespread threat. Is this true?
A: Not really. During previous high-alert situations, CERT has advised Windows users to avoid using Internet Explorer. In this case, CERT is not really recommending that users uninstall Java: just that users unplug Java from their Web browser.

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Zero-Day Java Exploit Debuts in Crimeware

January 10, 2013

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The hackers who maintain Blackhole and Nuclear Pack — competing crimeware products that are made to be stitched into hacked sites and use browser flaws to foist malware — say they’ve added a brand new exploit that attacks a previously unknown and currently unpatched security hole in Java.

The curator of Blackhole, a miscreant who uses the nickname “Paunch,” announced yesterday on several Underweb forums that the Java zero-day was a “New Year’s Gift,” to customers who use his exploit kit. Paunch bragged that his was the first to include the powerful offensive weapon, but shortly afterwards the same announcement was made by the maker and seller of Nuclear Pack.

According to both crimeware authors, the vulnerability exists in all versions of Java 7, including the latest — Java 7 Update 10. This information could not be immediately verified, but if you have Java installed, it would be a very good idea to unplug Java from your browser, or uninstall this program entirely if you don’t need it. I will update this post as more information becomes available.

Update, 8:47 a.m. ET: Alienvault Labs say they have reproduced and verified the claims of a new Java zero-day that exploits a vulnerability (CVE-2013-0422) in fully-patched versions of Java 7.

Update, 11:46 a.m. ET: As several readers have noted, Java 7 Update 10 ships with a feature that makes it far simpler to unplug Java from the browser than in previous. Oracle’s instructions for using that feature are here, and the folks at DHS’s U.S.-CERT are now recommending this method as well.

Police Arrest Alleged ZeuS Botmaster “bx1”

January 10, 2013

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A man arrested in Thailand this week on charges of stealing millions from online bank accounts fits the profile of a miscreant nicknamed “bx1,” a hacker fingered by Microsoft as a major operator of botnets powered by the ZeuS banking trojan.

Photo: Bangkok Post

As reported by The Bangkok Post, 24-year-old Hamza Bendelladj, an Algerian national, was detained this weekend at Bangkok’s Suvarnnabhumi airport, as he was in transit from Malaysia to Egypt. This young man captured news media attention when he was brought out in front of Thai television cameras handcuffed but smiling broadly, despite being blamed by the FBI for hacking into customer accounts at 217 financial institutions worldwide.

Thai investigators told reporters that Bendelladj had amassed “huge amounts” in illicit earnings, and that “with just one transaction he could earn 10 to 20 million dollars. He’s been travelling the world flying first class and living a life of luxury.”

I didn’t fully appreciate why I found this case so interesting until I started searching the Internet and my own servers for his email address. Turns out that in 2011, I was contacted via instant message by a hacker who said he was operating botnets using the Zeus and SpyEye Trojans. This individual reached out to me repeatedly over the next year, for no apparent reason except to brag about his exploits. He contacted me via Microsoft’s MSN instant message platform, using the email address daniel.h.b@universityofsutton.com. That account used the alias “Daniel.” I later found out that Daniel also used the nickname bx1.

According to several forums on which bx1 hung out until very recently, the man arrested in Thailand and bx1 were one and the same. A review of the email addresses and other contact information bx1 shared on these forums suggests that bx1 was the 19th and 20th John Doe named in Microsoft’s 2012 legal suit seeking to discover the identities of 39 alleged ZeuS botmasters. From the complaint Microsoft submitted to the U.S. District Court for the Eastern District of Virginia, and posted at Zeuslegalnotice.com:

“Plaintiffs are informed and believe and thereupon allege that John Doe 19/20 goes by the aliases “Daniel,” “bx1,” “Daniel Hamza” and “Danielbx1” and may be contacted at messaging email and messaging addresses “565359703,” airlord1988@gmail.com, bx1@hotmail.com, i_amhere@hotmail.fr, daniel.h.b@universityof sutton.com, princedelune@hotmail.fr, bx1_@msn.com, danibx1@hotmail.fr, and danieldelcore@hotmail.com. Upon information and belief, John Doe 19/20 has purchased and used the Zeus/SpyEye code.”

The Daniel I chatted with was proud of his work, and seemed to enjoy describing successful attacks. In one such conversation, dated January 2012, bx1 bragged about breaking into the systems of a hacker who used the nickname “Symlink” and was renowned in the underground for writing complex, custom Web injects for ZeuS and SpyEye users. Specifically, Symlink’s code was designed to automate money transfers out of victim banks to accounts that ZeuS and SpyEye botmasters controlled. Here’s an excerpt from that chat:

(12:31:22 AM) Daniel: if you wanna write up a story

(12:31:34 AM) Daniel: a very perfect

(12:31:34 AM) Daniel: even Interpol will get to you

(12:31:35 AM) Brian Krebs: ?

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Facebook, Yahoo Fix Valuable $ecurity Hole$

January 9, 2013

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Both Facebook and Yahoo! recently fixed security holes that let hackers hijack user accounts. Interestingly, access to methods for exploiting both of the flaws appears to have been sold by the same miscreant in the cybercrime underground.

According to Softpedia, Facebook has addressed a serious vulnerability after being notified by independent security researcher Sow Ching Shiong.

Image: http://chingshiong.blogspot.ro/

“The security hole allowed hackers to change the passwords of accounts they had compromised without knowing the old passwords. Whenever users change the password that protects their Facebook account, they’re required to enter the current password before they can set the new one. However, the expert found that cybercriminals could change a user’s password without knowing the old one by accessing the “https://www.facebook.com/hacked” URL, which automatically redirected to the compromised account recovery page.”

Information obtained by KrebsOnSecurity indicates that this “exploit” was being sold to a handful of members of an elite underground forum for $4,000 per buyer. The individual selling the exploit is the same hacker that I reported last year as selling access to a vulnerability in Yahoo! that let attackers hijack email accounts.

In late November 2012, I wrote about a cross-site scripting (XSS) vulnerability in Yahoo! that was being sold for $700 in the underground by an Egyptian hacker named TheHell. Shortly after that story, the hacker changed his nickname, but continued selling the exploit. Earlier this week, The Wall Street Journal‘s AllThingsD blog reported that Yahoo! had fixed the flaw I pictured in the video from that blog post.

“Web giant Yahoo just confirmed that it has been dealing with a vulnerability to its email service that may be connected to a surge in breaches of email accounts that are being used to send spam and other annoying content,” wrote Arik Hesseldahl. “I just got a statement from a Yahoo spokeswoman saying that the vulnerability seen in a video has been fixed.”

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