Posts Tagged: Catalin Cimpanu


27
Feb 18

Bot Roundup: Avalanche, Kronos, NanoCore

It’s been a busy few weeks in cybercrime news, justifying updates to a couple of cases we’ve been following closely at KrebsOnSecurity. In Ukraine, the alleged ringleader of the Avalanche malware spam botnet was arrested after eluding authorities in the wake of a global cybercrime crackdown there in 2016. Separately, a case that was hailed as a test of whether programmers can be held accountable for how customers use their product turned out poorly for 27-year-old programmer Taylor Huddleston, who was sentenced to almost three years in prison for making and marketing a complex spyware program.

First, the Ukrainian case. On Nov. 30, 2016, authorities across Europe coordinated the arrest of five individuals thought to be tied to the Avalanche crime gang, in an operation that the FBI and its partners abroad described as an unprecedented global law enforcement response to cybercrime. Hundreds of malicious web servers and hundreds of thousands of domains were blocked in the coordinated action.

The global distribution of servers used in the Avalanche crime machine. Source: Shadowserver.org

The alleged leader of the Avalanche gang — 33-year-old Russian Gennady Kapkanov — did not go quietly at the time. Kapkanov allegedly shot at officers with a Kalashnikov assault rifle through the front door as they prepared to raid his home, and then attempted to escape off of his 4th floor apartment balcony. He was later released, after police allegedly failed to file proper arrest records for him.

But on Monday Agence France-Presse (AFP) reported that Ukrainian authorities had once again collared Kapkanov, who was allegedly living under a phony passport in Poltav, a city in central Ukraine. No word yet on whether Kapkanov has been charged, which was supposed to happen Monday.

Kapkanov’s drivers license. Source: npu.gov.ua.

HOW WELL DO YOU REALLY WANT TO KNOW YOUR CUSTOMERS?

Lawyers for Taylor Huddleston, a 27-year-old programmer from Hot Springs, Ark., originally asked a federal court to believe that the software he sold on the sprawling hacker marketplace Hackforums — a “remote administration tool” or “RAT” designed to let someone remotely administer one or many computers remotely — was just a benign tool.

The bad things done with Mr. Huddleston’s tools, the defendant argued, were not Mr. Huddleston’s doing. Furthermore, no one had accused Mr. Huddleston of even using his own software.

The Daily Beast first wrote about Huddleston’s case in 2017, and at the time suggested his prosecution raised questions of whether a programmer could be held criminally responsible for the actions of his users. My response to that piece was “Dual-Use Software Criminal Case Not So Novel.

Photo illustration by Lyne Lucien/The Daily Beast

The court was swayed by evidence that yes, Mr. Huddleston could be held criminally responsible for those actions. It sentenced him to 33 months in prison after the defendant acknowledged that he knew his RAT — a Remote Access Trojan dubbed “NanoCore RAT” — was being used to spy on webcams and steal passwords from systems running the software.

Of course Huddleston knew: He didn’t market his wares on some Craigslist software marketplace ad, or via video promos on his local cable channel: He marketed the NanoCore RAT and another software licensing program called Net Seal exclusively on Hackforums[dot]net.

This sprawling, English language forum has a deep bench of technical forum discussions about using RATs and other tools to surreptitiously record passwords and videos of “slaves,” the derisive term for systems secretly infected with these RATs.

Huddleston knew what many of his customers were doing because many NanoCore users also used Huddleston’s Net Seal program to keep their own RATs and other custom hacking tools from being disassembled or “cracked” and posted online for free. In short: He knew what programs his customers were using Net Seal on, and he knew what those customers had done or intended to do with tools like NanoCore.

The sentencing suggests that where you choose to sell something online says a lot about what you think of your own product and who’s likely buying it.

Daily Beast author Kevin Poulsen noted in a July 2017 story that Huddleston changed his tune and pleaded guilty. The story pointed to an accompanying plea in which Huddleston stipulated that he “knowingly and intentionally aided and abetted thousands of unlawful computer intrusions” in selling the program to hackers and that he “acted with the purpose of furthering these unauthorized computer intrusions and causing them to occur.” Continue reading →


23
Jun 17

FBI: Extortion, CEO Fraud Among Top Online Fraud Complaints in 2016

Online extortion, tech support scams and phishing attacks that spoof the boss were among the most costly cyber scams reported by consumers and businesses last year, according to new figures from the FBI’s Internet Crime Complaint Center (IC3).

The IC3 report released Thursday correctly identifies some of the most prevalent and insidious forms of cybercrimes today, but the total financial losses tied to each crime type also underscore how infrequently victims actually report such crimes to law enforcement.

Source: Internet Crime Complaint Center (IC3).

Source: Internet Crime Complaint Center (IC3).

For example, the IC3 said it received 17,146 extortion-related complaints, with an adjusted financial loss totaling just over $15 million. In that category, the report identified 2,673 complaints identified as ransomware — malicious software that scrambles a victim’s most important files and holds them hostage unless and until the victim pays a ransom (usually in a virtual currency like Bitcoin).

According to the IC3, the losses associated with those ransomware complaints totaled slightly more than $2.4 million. Writing for BleepingComputer.com — a tech support forum I’ve long recommended that helps countless ransomware victims — Catalin Cimpanu observes that the FBI’s ransomware numbers “are ridiculously small compared to what happens in the real world, where ransomware is one of today’s most prevalent cyber-threats.”

“The only explanation is that people are paying ransoms, restoring from backups, or reinstalling PCs without filing a complaint with authorities,” Cimpanu writes.

It’s difficult to know how what percentage of ransomware victims paid the ransom or were able to restore from backups, but one thing is for sure: Relatively few victims are reporting cyber fraud to federal investigators.

The report notes that only an estimated 15 percent of the nation’s fraud victims report their crimes to law enforcement. For 2016, 298,728 complaints were received, with a total victim loss of $1.33 billion.

If that 15 percent estimate is close to accurate, that means the real cost of cyber fraud for Americans last year was probably closer to $9 billion, and the losses from ransomware attacks upwards of $16 million. Continue reading →