Lawmakers Probe Early Release of Top RU Cybercrook

March 15, 2022
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Aleksei Burkov, seated second from right, attends a hearing in Jerusalem in 2015. Image: Andrei Shirokov / Tass via Getty Images.

Aleksei Burkov, a cybercriminal who long operated two of Russia’s most exclusive underground hacking forums, was arrested in 2015 by Israeli authorities. The Russian government fought Burkov’s extradition to the U.S. for four years — even arresting and jailing an Israeli woman to force a prisoner swap. That effort failed: Burkov was sent to America, pleaded guilty, and was sentenced to nine years in prison. But a little more than a year later, he was quietly released and deported back to Russia. Now some Republican lawmakers are asking why a Russian hacker once described as “an asset of supreme importance” was allowed to shorten his stay.

A native of St. Petersburg, Russia, Burkov admitted to running CardPlanet, a site that sold more than 150,000 stolen credit card accounts, and to being a founder of DirectConnection — a closely guarded online community that attracted some of the world’s most-wanted Russian hackers.

But Burkov’s cybercriminal activities spanned far beyond mere credit card fraud. A 2019 deep dive into Burkov’s hacker alias “K0pa” revealed he also was co-administrator of the secretive Russian cybercrime forum “Mazafaka.” Like DirectConnection, Mazafaka’s member roster was a veritable “Who’s Who?” of the Russian hacker underground, and K0pa played a key role in vetting new members and settling disputes for both communities.

K0pa’s elevated status in the Russian cybercrime community made him one of the most connected malicious hackers ever apprehended by U.S. authorities. As I wrote at the time of Burkov’s extradition, the Kremlin was probably concerned that he simply knew too much about Russia’s propensity to outsource certain activities to its criminal hacker community.

“To my knowledge, no one has accused Burkov of being some kind of cybercrime fixer or virtual badguy Rolodex for the Russian government,” KrebsOnSecurity wrote in 2019. “On the other hand, from his onetime lofty perch atop some of the most exclusive Russian cybercrime forums, K0pa certainly would have fit that role nicely.”

Burkov was arrested in December 2015 on an international warrant while visiting Israel, and over the ensuing four years the Russian government aggressively sought to keep him from being extradited to the United States.

When Israeli authorities turned down requests to send him back to Russia — supposedly to face separate hacking charges there — the Russians imprisoned Israeli citizen Naama Issachar on trumped-up drug charges in a bid to trade prisoners. Nevertheless, Burkov was extradited to the United States in November 2019.

And if there were any doubts Issachar was jailed for use as a political pawn, Russian President Vladimir Putin erased those by pardoning her in January 2020, just hours after Burkov pleaded guilty in the United States.

In June 2020, Burkov was sentenced to nine years in prison. But a little more than a year later — Aug. 25, 2021 — Burkov was released and deported back to Russia. According to a letter (PDF) sent Monday by four Republican House lawmakers to White House National Security Advisor Jake Sullivan, U.S. Immigration and Customs Enforcement (ICE) officials escorted Burkov onto a plane destined for Moscow shortly after his release. Continue reading →

Report: Recent 10x Increase in Cyberattacks on Ukraine

March 11, 2022
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As their cities suffered more intense bombardment by Russian military forces this week, Ukrainian Internet users came under renewed cyberattacks, with one Internet company providing service there saying they blocked ten times the normal number of phishing and malware attacks targeting Ukrainians.

John Todd is general manager of Quad9, a free “anycast” DNS platform. DNS stands for Domain Name System, which is like a globally distributed phone book for the Internet that maps human-friendly website names (example.com) to numeric Internet addresses (8.8.4.4.) that are easier for computers to manage. Your computer or mobile device generates DNS lookups each time you send or receive an email, or browse to a webpage.

With anycast, one Internet address can apply to many servers, meaning that any one of a number of DNS servers can respond to DNS queries, and usually the one that is geographically closest to the customer making the request will provide the response.

Quad9 insulates its users from a range of cyberattacks by blocking DNS requests for known-bad domain names, i.e., those confirmed to be hosting malicious software, phishing websites, stalkerware and other threats. And normally, the ratio of DNS queries coming from Ukraine that are allowed versus blocked by Quad9 is fairly constant.

But Todd says that on March 9, Quad9’s systems blocked 10 times the normal number of DNS requests coming from Ukraine, and to a lesser extent Poland.

Todd said Quad9 saw a significant drop in traffic reaching its Kyiv POP [point of presence] during the hostilities, presumably due to fiber cuts or power outages. Some of that traffic then shifted to Warsaw, which for much of Ukraine’s networking is the next closest significant interconnect site.

Quad9’s view of a spike in malicious traffic targeting Ukrainian users this week. Click to enlarge.

“While our overall traffic dropped in Kyiv — and slightly increased in Warsaw due to infrastructure outages inside of .ua — the ratio of (good queries):(blocked queries) has spiked in both cities,” he continued. “The spike in that blocking ratio [Wednesday] afternoon in Kyiv was around 10x the normal level when comparing against other cities in Europe (Amsterdam, Frankfurt.) While Ukraine always is slightly higher (20%-ish) than Western Europe, this order-of-magnitude jump is unprecedented.” Continue reading →

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Microsoft Patch Tuesday, March 2022 Edition

March 9, 2022
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Microsoft on Tuesday released software updates to plug at least 70 security holes in its Windows operating systems and related software. For the second month running, there are no scary zero-day threats looming for Windows users, and relatively few “critical” fixes. And yet we know from experience that attackers are already trying to work out how to turn these patches into a roadmap for exploiting the flaws they fix. Here’s a look at the security weaknesses Microsoft says are most likely to be targeted first.

Greg Wiseman, product manager at Rapid7, notes that three vulnerabilities fixed this month have been previously disclosed, potentially giving attackers a head start in working out how to exploit them. Those include remote code execution bugs CVE-2022-24512, affecting .NET and Visual Studio, and CVE-2022-21990, affecting Remote Desktop Client. CVE-2022-24459 is a vulnerability in the Windows Fax and Scan service. All three publicly disclosed vulnerabilities are rated “Important” by Microsoft.

Just three of the fixes this month earned Microsoft’s most-dire “Critical” rating, which Redmond assigns to bugs that can be exploited to remotely compromise a Windows PC with little to no help from users. Two of those critical flaws involve Windows video codecs. Perhaps the most concerning critical bug quashed this month is CVE-2022-23277, a  remote code execution flaw affecting Microsoft Exchange Server.

“Thankfully, this is a post-authentication vulnerability, meaning attackers need credentials to exploit it,” Wiseman said. “Although passwords can be obtained via phishing and other means, this one shouldn’t be as rampantly exploited as the deluge of Exchange vulnerabilities we saw throughout 2021. Exchange administrators should still patch as soon as reasonably possible.”

CVE-2022-24508 is a remote code execution bug affecting Windows SMBv3, the technology that handles file sharing in Windows environments.

“This has potential for widespread exploitation, assuming an attacker can put together a suitable exploit,” Wiseman said. “Luckily, like this month’s Exchange vulnerabilities, this, too, requires authentication.” Continue reading →

Internet Backbone Giant Lumen Shuns .RU

March 8, 2022
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Lumen Technologies, an American company that operates one of the largest Internet backbones and carries a significant percentage of the world’s Internet traffic, said today it will stop routing traffic for organizations based in Russia. Lumen’s decision comes just days after a similar exit by backbone provider Cogent, and amid a news media crackdown in Russia that has already left millions of Russians in the dark about what is really going on with their president’s war in Ukraine.

Monroe, La. based Lumen [NYSE: LUMN] (formerly CenturyLink) initially said it would halt all new business with organizations based in Russia, leaving open the possibility of continuing to serve existing clients there. But on Tuesday the company said it could no longer justify that stance.

“Life has taken a turn in Russia and Lumen is unable to continue to operate in this market,” Lumen said in a published statement. “The business services we provide are extremely small and very limited as is our physical presence. However, we are taking steps to immediately stop business in the region.”

“We decided to disconnect the network due to increased security risk inside Russia,” the statement continues. “We have not yet experienced network disruptions but given the increasingly uncertain environment and the heightened risk of state action, we took this move to ensure the security of our and our customers’ networks, as well as the ongoing integrity of the global Internet.”

According to Internet infrastructure monitoring firm Kentik, Lumen is the top international transit provider to Russia, with customers including Russian telecom giants Rostelecom and TTK, as well as all three major mobile operators (MTS, Megafon and VEON).

“A backbone carrier disconnecting its customers in a country the size of Russia is without precedent in the history of the internet and reflects the intense global reaction that the world has had over the invasion of Ukraine,” wrote Doug Madory, Kentik’s director of Internet analysis.

It’s not clear whether any other Internet backbone providers — some of which are based outside of the United States — will follow the lead of Lumen and Cogent. But Madory notes that as economic sanctions continue to exact a toll on Russia’s economy, its own telecommunications firms may have difficulty paying foreign transit providers for service.

Ukrainian leaders petitioned the Internet Corporation for Assigned Names and Numbers (ICANN) — the nonprofit organization charged with overseeing the global domain name system — to disconnect Russia’s top-level domain (.ru) from the Internet. ICANN respectfully declined that request, but many technology giants, including Amazon, Apple and Microsoft, have moved on their own to suspend new business in the country.

Meanwhile, Russia recently cracked down on the last remaining vestiges of a free press within its borders, passing a new law that threatens up to 15 years in jail for anyone who publishes content that refers to the conflict in Ukraine as a “war” or “invasion.” Continue reading →

Conti Ransomware Group Diaries, Part IV: Cryptocrime

March 7, 2022
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Three stories here last week pored over several years’ worth of internal chat records stolen from the Conti ransomware group, the most profitable ransomware gang in operation today. The candid messages revealed how Conti evaded law enforcement and intelligence agencies, what it was like on a typical day at the Conti office, and how Conti secured the digital weaponry used in their attacks. This final post on the Conti conversations explores different schemes that Conti pursued to invest in and steal cryptocurrencies.

When you’re perhaps the most successful ransomware group around — Conti made $180 million last year in extortion payments, well more than any other crime group, according to Chainalysis — you tend to have a lot digital currency like Bitcoin.

This wealth allowed Conti to do things that regular investors couldn’t — such as moving the price of cryptocurrencies in one direction or the other. Or building a cryptocurrency platform and seeding it with loads of ill-gotten crypto from phantom investors.

One Conti top manager — aptly-named “Stern” because he incessantly needled Conti underlings to complete their assigned tasks — was obsessed with the idea of creating his own crypto scheme for cross-platform blockchain applications.

“I’m addicted right now, I’m interested in trading, defi, blockchain, new projects,” Stern told “Bloodrush” on Nov. 3, 2021. “Big companies have too many secrets that they hold on to, thinking that this is their main value, these patents and data.”

In a discussion thread that spanned many months in Conti’s internal chat room, Stern said the plan was to create their own crypto universe.

“Like Netherium, Polkadot and Binance smart chain, etc.,” Stern wrote. “Does anyone know more about this? Study the above systems, code, principles of work. To build our own, where it will already be possible to plug in NFT, DEFI, DEX and all the new trends that are and will be. For others to create their own coins, exchanges and projects on our system.”

It appears that Stern has been paying multiple developers to pursue the notion of building a peer-to-peer (P2P) based system for “smart contracts” — programs stored on a blockchain that run whenever predetermined conditions are met.

It’s unclear under what context the Conti gang was interested in smart contracts, but the idea of a ransomware group insisting on payments via smart contracts is not entirely new. In 2020, researchers from Athens University School of Information Sciences and Technology in Greece showed (PDF) how ransomware-as-a-service offerings might one day be executed through smart contracts.

Before that, Jeffrey Ladish, an information security consultant based in Oakland, Calif., penned a two-part analysis on why smart contracts will make ransomware more profitable.

“By using a smart contract, an operator can trustlessly sell their victims a decryption key for money,” Ladish wrote. “That is, a victim can send some money to a smart contract with a guarantee that they will either receive the decryption key to their data or get their money back. The victim does not have to trust the person who hacked their computer because they can verify that the smart contract will fairly handle the exchange.”

The Conti employee “Van” appears to have taken the lead on the P2P crypto platform, which he said was being developed using the Rust programming language.

“I am trying to make a p2p network in Rust,” Van told “Demon” on Feb. 19, 2022 [Demon appears to be one of Stern’s aliases]. “I’m sorting it out and have already started writing code.”

“It’s cool you like Rust,” Demon replied. “I think it will help us with smart contracts.”

Stern apparently believed in his crypto dreams so much that he sponsored a $100,000 article writing contest on the Russian language cybercrime forum Exploit, asking interested applicants to put forth various ideas for crypto platforms. Such contests are an easy way to buy intellectual property for ongoing projects, and they’re also effective recruiting tools for cybercriminal organizations.

“Cryptocurrency article contest! [100.000$],” wrote mid-level Conti manager “Mango,” to boss Stern, copying the title of the post on the Exploit forum. “What the hell are you doing there…”

A few days later Mango reports to Stern that he has “prepared everything for both the social network and articles for crypto contests.” Continue reading →

Conti Ransomware Group Diaries, Part III: Weaponry

March 4, 2022
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Part I of this series examined newly-leaked internal chats from the Conti ransomware group, and how the crime gang dealt with its own internal breaches. Part II explored what it’s like to be an employee of Conti’s sprawling organization. Today’s Part III looks at how Conti abused popular commercial security services to undermine the security of their targets, as well as how the team’s leaders strategized for the upper hand in ransom negotiations with victims.

Conti is by far the most aggressive and profitable ransomware group in operation today. Image: Chainalysis

Conti is by far the most successful ransomware group in operation today, routinely pulling in multi-million dollar payments from victim organizations. That’s because more than perhaps any other ransomware outfit, Conti has chosen to focus its considerable staff and talents on targeting companies with more than $100 million in annual revenues.

As it happens, Conti itself recently joined the $100 million club. According to the latest Crypto Crime Report (PDF) published by virtual currency tracking firm Chainalysis, Conti generated at least $180 million in revenue last year.

On Feb. 27, a Ukrainian cybersecurity researcher who is currently in Ukraine leaked almost two years’ worth of internal chat records from Conti, which had just posted a press release to its victim shaming blog saying it fully supported Russia’s invasion of his country. Conti warned it would use its cyber prowess to strike back at anyone who interfered in the conflict.

The leaked chats show that the Conti group — which fluctuated in size from 65 to more than 100 employees — budgeted several thousand dollars each month to pay for a slew of security and antivirus tools. Conti sought out these tools both for continuous testing (to see how many products detected their malware as bad), but also for their own internal security.

A chat between Conti upper manager “Reshaev” and subordinate “Pin” on Aug. 8, 2021 shows Reshaev ordering Pin to quietly check on the activity of the Conti network administrators once a week — to ensure they’re not doing anything to undermine the integrity or security of the group’s operation. Reshaev tells Pin to install endpoint detection and response (EDR) tools on every administrator’s computer.

“Check admins’ activity on servers each week,” Reshaev said. “Install EDR on every computer (for example, Sentinel, Cylance, CrowdStrike); set up more complex storage system; protect LSAS dump on all computers; have only 1 active accounts; install latest security updates; install firewall on all network.”

Conti managers were hyper aware that their employees handled incredibly sensitive and invaluable data stolen from companies, information that would sell like hotcakes on the underground cybercrime forums. But in a company run by crooks, trust doesn’t come easily.

“You check on me all the time, don’t you trust me?,” asked mid-level Conti member “Bio” of “Tramp” (a.k.a. “Trump“), a top Conti overlord. Bio was handling a large bitcoin transfer from a victim ransom payment, and Bio detected that Trump was monitoring him.

“When that kind of money and people from the street come in who have never seen that kind of money, how can you trust them 1,000%?” Trump replied. “I’ve been working here for more than 15 years and haven’t seen anything else.” Continue reading →

Conti Ransomware Group Diaries, Part II: The Office

March 2, 2022
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Earlier this week, a Ukrainian security researcher leaked almost two years’ worth of internal chat logs from Conti, one of the more rapacious and ruthless ransomware gangs in operation today. Tuesday’s story examined how Conti dealt with its own internal breaches and attacks from private security firms and governments. In Part II of this series we’ll explore what it’s like to work for Conti, as described by the Conti employees themselves.

The Conti group’s chats reveal a great deal about its internal structure and hierarchy. Conti maintains many of the same business units as a legitimate, small- to medium-sized enterprise, including a Human Resources department that is in charge of constantly interviewing potential new hires.

Other Conti departments with their own distinct budgets, staff schedules, and senior leadership include:

–Coders: Programmers hired to write malicious code, integrate disparate technologies
–Testers: Workers in charge of testing Conti malware against security tools and obfuscating it
–Administrators: Workers tasked with setting up, tearing down servers, other attack infrastructure
–Reverse Engineers: Those who can disassemble computer code, study it, find vulnerabilities or weaknesses
–Penetration Testers/Hackers: Those on the front lines battling against corporate security teams to steal data, and plant ransomware.

Conti appears to have contracted out much of its spamming operations, or at least there was no mention of “Spammers” as direct employees. Conti’s leaders seem to have set strict budgets for each of its organizational units, although it occasionally borrowed funds allocated for one department to address the pressing cashflow needs of another.

A great many of the more revealing chats concerning Conti’s structure are between “Mango” — a mid-level Conti manager to whom many other Conti employees report each day — and “Stern,” a sort of cantankerous taskmaster who can be seen constantly needling the staff for reports on their work.

In July 2021, Mango told Stern that the group was placing ads on several Russian-language cybercrime forums to hire more workers. “The salary is $2k in the announcement, but there are a lot of comments that we are recruiting galley slaves,” Mango wrote. “Of course, we dispute that and say those who work and bring results can earn more, but there are examples of coders who work normally and earn $5-$10k salary.”

The Conti chats show the gang primarily kept tabs on the victim bots infected with their malware via both the Trickbot and Emotet crimeware-as-a-service platforms, and that it employed dozens of people to continuously test, maintain and expand this infrastructure 24 hours a day, 7 days a week.

Conti members referred to Emotet as “Booz” or “Buza,” and it is evident from reading these chat logs that Buza had its own stable of more than 50 coders, and likely much of the same organizational structure as Conti.

According to Mango, as of July 18, 2021 the Conti gang employed 62 people, mostly low-level malware coders and software testers. However, Conti’s employee roster appears to have fluctuated wildly from one month to the next. For example, on multiple occasions the organization was forced to fire many employees as a security precaution in the wake of its own internal security breaches.

In May 2021, Stern told Mango he wanted his underlings to hire 100 more “encoders” to work with the group’s malware before the bulk of the gang returns from their summer vacations in Crimea. Most of these new hires, Stern says, will join the penetration testing/hacking teams headed by Conti leaders “Hof” and “Reverse.” Both Hof and Reverse appear to have direct access to the Emotet crimeware platform.

On July 30, 2021, Mango tells stern the payroll has increased to 87 salaried employees, with more hires on the way. But trying to accurately gauge the size of the Conti organization is problematic, in part because cybersecurity experts have long held that Conti is merely a rebrand of another ransomware strain and affiliate program known as Ryuk.

First spotted in 2018, Ryuk was just as ruthless and mercenary as Conti, and the FBI says that in the first year of its operation Ryuk earned more than $61 million in ransom payouts.

“Conti is a Targeted version of Ryuk, which comes from Trickbot and Emotet which we’ve been monitoring for some time,” researchers at Palo Alto Networks wrote about Ryuk last year. “A heavy focus was put on hospital systems, likely due to the necessity for uptime, as these systems were overwhelmed with handling the ongoing COVID-19 pandemic. We observed initial Ryuk ransom requests ranging from US$600,000 to $10 million across multiple industries.”

On May 14, 2021, Ireland’s Health Service Executive (HSE) suffered a major ransomware attack at the hands of Conti. The attack would disrupt services at several Irish hospitals, and resulted in the near complete shutdown of the HSE’s national and local networks, forcing the cancellation of many outpatient clinics and healthcare services. It took the HSE until Sept. 21, 2021 to fully restore all of its systems from the attack, at an estimated cost of more than $600 million.

It remains unclear from reading these chats how many of Conti’s staff understood how much of the organization’s operations overlapped with that of Ryuk. Lawrence Abrams at Bleeping Computer pointed to an October 2020 Conti chat in which the Emotet representative “Buza” posts a link to a security firm’s analysis of Ryuk’s return.

“Professor,” the nickname chosen by one of Conti’s most senior generals, replies that indeed Ryuk’s tools, techniques and procedures are nearly identical to Conti’s.

“adf.bat — this is my fucking batch file,” Professor writes, evidently surprised at having read the analysis and spotting his own code being re-used in high-profile ransomware attacks by Ryuk.

“Feels like [the] same managers were running both Ryuk and Conti, with a slow migration to Conti in June 2020,” Abrams wrote on Twitter. “However, based on chats, some affiliates didn’t know that Ryuk and Conti were run by the same people.” Continue reading →

Conti Ransomware Group Diaries, Part I: Evasion

March 1, 2022
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A Ukrainian security researcher this week leaked several years of internal chat logs and other sensitive data tied to Conti, an aggressive and ruthless Russian cybercrime group that focuses on deploying its ransomware to companies with more than $100 million in annual revenue. The chat logs offer a fascinating glimpse into the challenges of running a sprawling criminal enterprise with more than 100 salaried employees. The records also provide insight into how Conti has dealt with its own internal breaches and attacks from private security firms and foreign governments.

Conti’s threatening message this week regarding international interference in Ukraine.

Conti makes international news headlines each week when it publishes to its dark web blog new information stolen from ransomware victims who refuse to pay an extortion demand. In response to Russia’s invasion of Ukraine, Conti published a statement announcing its “full support.”

“If anybody will decide to organize a cyberattack or any war activities against Russia, we are going to use all our possible resources to strike back at the critical infrastructures of an enemy,” the Conti blog post read.

On Sunday, Feb. 27, a new Twitter account “Contileaks” posted links to an archive of chat messages taken from Conti’s private communications infrastructure, dating from January 29, 2021 to the present day. Shouting “Glory for Ukraine,” the Contileaks account has since published additional Conti employee conversations from June 22, 2020 to Nov. 16, 2020.

The Contileaks account did not respond to requests for comment. But Alex Holden, the Ukrainian-born founder of the Milwaukee-based cyber intelligence firm Hold Security, said the person who leaked the information is not a former Conti affiliate — as many on Twitter have assumed. Rather, he said, the leaker is a Ukrainian security researcher who has chosen to stay in his country and fight.

“The person releasing this is a Ukrainian and a patriot,” Holden said. “He’s seeing that Conti is supporting Russia in its invasion of Ukraine, and this is his way to stop them in his mind at least.”

GAP #1

The temporal gaps in these chat records roughly correspond to times when Conti’s IT infrastructure was dismantled and/or infiltrated by security researchers, private companies, law enforcement, and national intelligence agencies. The holes in the chat logs also match up with periods of relative quiescence from the group, as it sought to re-establish its network of infected systems and dismiss its low-level staff as a security precaution.

On Sept. 22, 2020, the U.S. National Security Agency (NSA) began a weeks-long operation in which it seized control over the Trickbot botnet, a malware crime machine that has infected millions of computers and is often used to spread ransomware. Conti is one of several cybercrime groups that has regularly used Trickbot to deploy malware.

Once in control over Trickbot, the NSA’s hackers sent all infected systems a command telling them to disconnect themselves from the Internet servers the Trickbot overlords used to control compromised Microsoft Windows computers. On top of that, the NSA stuffed millions of bogus records about new victims into the Trickbot database.

News of the Trickbot compromise was first published here on Oct. 2, 2020, but the leaked Conti chats show that the group’s core leadership detected something was seriously wrong with their crime machine just a few hours after the initial compromise of Trickbot’s infrastructure on Sept. 22.

“The one who made this garbage did it very well,” wrote “Hof,” the handle chosen by a top Conti leader, commenting on the Trickbot malware implant that was supplied by the NSA and quickly spread to the rest of the botnet. “He knew how the bot works, i.e. he probably saw the source code, or reversed it. Plus, he somehow encrypted the config, i.e. he had an encoder and a private key, plus uploaded it all to the admin panel. It’s just some kind of sabotage.”

“Moreover, the bots have been flooded with such a config that they will simply work idle,” Hof explained to his team on Sept. 23, 2020. Hof noted that the intruder even kneecapped Trickbot’s built-in failsafe recovery mechanism. Trickbot was configured so that if none of the botnet’s control servers were reachable, the bots could still be recaptured and controlled by registering a pre-computed domain name on EmerDNS, a decentralized domain name system based on the Emercoin virtual currency.

“After a while they will download a new config via emercoin, but they will not be able to apply this config, because this saboteur has uploaded the config with the maximum [version] number, and the bot is checking that the new config [version number] should be larger than the old one,” Hof wrote. “Sorry, but this is fucked up. I don’t know how to get them back.”

It would take the Conti gang several weeks to rebuild its malware infrastructure, and infect tens of thousands of new Microsoft Windows systems. By late October 2020, Conti’s network of infected systems had grown to include 428 medical facilities throughout the United States. The gang’s leaders saw an opportunity to create widespread panic — if not also chaos — by deploying their ransomware simultaneously to hundreds of American healthcare organizations already struggling amid a worldwide pandemic.

“Fuck the clinics in the USA this week,” wrote Conti manager “Target” on Oct. 26, 2020. “There will be panic. 428 hospitals.”

On October 28, the FBI and the U.S. Department of Homeland Security hastily assembled a conference call with healthcare industry executives warning about an “imminent cybercrime threat to U.S. hospitals and healthcare providers.”

Follow-up reporting confirmed that at least a dozen healthcare organizations were hit with ransomware that week, but the carnage apparently was not much worse than a typical week in the healthcare sector. One information security leader in the healthcare industry told KrebsOnSecurity at the time that it wasn’t uncommon for the industry to see at least one hospital or health care facility hit with ransomware each day. Continue reading →

Russia Sanctions May Spark Escalating Cyber Conflict

February 25, 2022
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President Biden joined European leaders this week in enacting economic sanctions against Russia in response to its invasion of Ukraine. The West has promised tougher sanctions are coming, but experts warn these will almost certainly trigger a Russian retaliation against America and its allies, which could escalate into cyber attacks on Western financial institutions and energy infrastructure.

Michael Daniel is a former cybersecurity advisor to the White House during the Obama administration who now heads the Cyber Threat Alliance, an industry group focused on sharing threat intelligence among members. Daniel said there are two primary types of cyber threats the group is concerned about potentially coming in response to sanctions on Russia.

The first involves what Daniel called “spillover and collateral damage” — a global malware contagion akin to a NotPeyta event — basically some type of cyber weapon that has self-propagating capabilities and may even leverage a previously unknown security flaw in a widely-used piece of hardware or software.

Russia has been suspected of releasing NotPetya, a large-scale cyberattack in 2017 initially aimed at Ukrainian businesses that mushroomed into an extremely disruptive and expensive global malware outbreak.

“The second level [is that] in retaliation for sanctions or perceived interference, Russia steps up more direct attacks on Western organizations,” Daniel said. “The Russians have shown themselves to be incredibly ingenious and creative in terms of how they come up with targets that seem to catch us by surprise. If the situation escalates in cyberspace, there could be some unanticipated organizations that end up in the crosshairs.”

What kinds of attacks are experts most concerned about? In part because the Russian economy is so dependent on energy exports, Russia has invested heavily in probing for weaknesses in the cyber systems that support bulk power production and distribution.

Ukraine has long been used as the testing grounds for Russian offensive hacking capabilities targeting power infrastructure. State-backed Russian hackers have been blamed for the Dec. 23, 2015 cyberattack on Ukraine’s power grid that left 230,000 customers shivering in the dark.

Experts warn that Russia could just as easily use its arsenal of sneaky cyber exploits against energy systems that support U.S. and European nations. In 2014, then National Security Agency Director Mike Rogers told lawmakers that hackers had been breaking into U.S. power utilities to probe for weaknesses, and that Russia had been caught planting malware in the same kind of industrial computers used by power utilities.

“All of that leads me to believe it is only a matter of when, not if, we are going to see something dramatic,” Rogers said at the time.

That haunting prophecy is ringing anew as European leaders work on hammering out additional sanctions, which the European Commission president says will restrict the Russian economy’s ability to function by starving it of important technology and access to finance.

A draft of the new penalties obtained by The New York Times would see the European Union ban the export of aircraft and spare parts that are necessary for the maintenance of Russian fleets.

“The bloc will also ban the export of specialized oil-refining technology as well as semiconductors, and it will penalize more banks — although it will stop short of targeting VTB, Russia’s second-largest bank, which is already crippled by American and British sanctions,” The Times wrote.

Dmitri Alperovitch is co-founder and former chief technology officer at the security firm CrowdStrike. Writing for The Economist, Alperovitch said America must tailor its response carefully to avoid initiating a pattern of escalation that could result in a potentially devastating hot war with Russia.

“The proposed combination of sanctions on top Russian banks and implementation of export controls on semiconductors would be likely to severely debilitate the Russian economy,” Alperovitch wrote. “And although many in the West may initially cheer this outcome as righteous punishment for Russia’s blatant violation of Ukrainian sovereignty, these measures will probably trigger significant Russian retaliation against America. That prospect all but guarantees that the conflict will not come to an end with an invasion of Ukraine.”

Faced with a potentially existential threat to its economic well-being — and seeing itself as having nothing more to lose — Russia will have several tools at its disposal with which to respond, he said: One of those will be carrying out cyber-attacks against American and European financial institutions and energy infrastructure.

“Having already exhausted the power of economic sanctions, America and its European allies would have few choices other than to respond to these attacks with offensive cyber-strikes of their own,” Alperovitch wrote. “This pattern of tit-for-tat cyber retaliation could place Russia and the West on a worrying path. It could end with the conflict spilling out of cyberspace and into the realm of a hot conflict. This outcome—a hot conflict between two nuclear powers with extensive cyber capabilities—is one that everyone in the world should be anxious to avoid.”

In May 2021, Russian cybercriminals unleashed a ransomware attack against Colonial Pipeline, a major fuel distributor in the United States. The resulting outage caused fuel shortages and price spikes across the nation. Alperovitch says a retaliation from Russia in response to sanctions could make the Colonial Pipeline attack seem paltry by comparison.

“The colonial pipeline is going to be like child’s play if the Russians truly unleash all their capability,” Alperovitch told CNBC this week.

For example, having your organization’s computers and servers locked by ransomware may seem like a day at the park compared to getting hit with “wiper” malware that simply overwrites or corrupts data on infected systems.

Kim Zetter, a veteran Wired reporter who now runs her own cybersecurity-focused Substack newsletter, has painstakingly documented two separate wiper attacks launched in the lead-up to the Russian invasion that targeted Ukrainian government and contractor networks, as well as systems in Latvia and Lithuania.

One contractor interviewed by Zetter said the wiper attacks appeared to be extremely targeted, going after organizations that support the Ukrainian government — regardless of where those organizations are physically located. Continue reading →