Big-three credit bureau Equifax has reportedly agreed to pay at least $650 million to settle lawsuits stemming from a 2017 breach that let intruders steal personal and financial data on roughly 148 million Americans. Here’s a brief primer that attempts to break down what this settlement means for you, and what it says about the value of your identity.
Q: What happened?
A: If the terms of the settlement are approved by a court, the Federal Trade Commission says Equifax will be required to spend up to $425 million helping consumers who can demonstrate they were financially harmed by the breach. The company also will provide up to 10 years of free credit monitoring to those who had their data exposed.
Q: What about the rest of the money in the settlement?
A: An as-yet undisclosed amount will go to pay lawyers fees for the plaintiffs.
Q: $650 million seems like a lot. Is that some kind of record?
A: If not, it’s pretty close. The New York Times reported earlier today that it was thought to be the largest settlement ever paid by a company over a data breach, but that statement doesn’t appear anywhere in their current story.
Q: Hang on…148 million affected consumers…out of that $425 million pot that comes to just $2.87 per victim, right?
A: That’s one way of looking at it. But as always, the devil is in the details. That is, you won’t see a penny or any other benefit unless you do something about it, and how much you end up costing the company (within certain limits) is up to you.
The Times reports that the proposed settlement assumes that only around seven million people will sign up for their credit monitoring offers. “If more do, Equifax’s costs for providing it could rise meaningfully,” the story observes.
Q: Okay. What can I do?
A: You can visit www.equifaxbreachsettlement.com, although none of this will be official or on offer until a court approves the settlement.
Q: Uh, that doesn’t look like Equifax’s site…
A: Good eyes! It’s not. It’s run by a third party. But we should probably just be grateful for that; given Equifax’s total dumpster fire of a public response to the breach, the company has shown itself incapable of operating (let alone securing) a properly functioning Web site.
Q: What can I get out of this?
A: In a nutshell, affected consumers are eligible to apply for one or more remedies, including:
–Free credit monitoring: At least three years of credit monitoring via all three major bureaus simultaneously, including Equifax, Experian and Trans Union. The settlement also envisions up to six more years of single bureau monitoring through Experian. Or, if you don’t want to take advantage of the credit monitoring offers, you can opt instead for a $125 cash payment. You can’t get both.
–Reimbursement: …For the time you spent remedying identity theft or misuse of your personal information caused by the breach, or purchasing credit monitoring or credit reports. This is capped at 20 total hours at $25 per hour ($500). Total cash reimbursement payment will not exceed $20,000 per consumer.
–Help with ongoing identity theft issues: Up to seven years of “free assisted identity restoration services.” Again, the existing breach settlement page is light on specifics there.
Q: Does this cover my kids/dependents, too?
A: The FTC says if you were a minor in May 2017 (when Equifax first learned of the breach), you are eligible for a total of 18 years of free credit monitoring.
Q: How do I take advantage of any of these?
A: You can’t yet. The settlement has to be approved first. The settlement Web site says to check back again later. In addition to checking the breach settlement site periodically, consumers can sign up with the FTC to receive email updates about this settlement.
The settlement site said consumers also can call 1-833-759-2982 for more information. Press #2 on your phone’s keypad if you want to skip the 1-minute preamble and get straight into the queue to speak with a real person.
KrebsOnSecurity dialed in to ask for more details on the “free assisted identity restoration services,” and the person who took my call said they’d need to have some basic information about me in order to proceed. He said they needed my name, address and phone number to proceed. I gave him a number and a name, and after checking with someone he came back and said the restoration services would be offered by Equifax, but confirmed that affected consumers would still have to apply for it.
He added that the Equifaxbreachsettlement.com site will soon include a feature that lets visitors check to see if they’re eligible, but also confirmed that just checking eligibility won’t entitle one to any of the above benefits: Consumers will still need to file a claim through the site (when it’s available to do so).ANALYSIS
We’ll see how this unfolds, but I’ll be amazed if anything related to taking advantage of this settlement is painless. I still can’t even get a free copy of my credit report from Equifax, as I’m entitled to under the law for free each year. I’ve even requested a copy by mail, according to their instructions. So far nothing.
But let’s say for the sake of argument that our questioner is basically right — that this settlement breaks down to about $3 worth of flesh extracted from Equifax for each affected person. The thing is, this figure probably is less than what Equifax makes selling your credit history to potential creditors each year.
In a 2017 story about the Equifax breach, I quoted financial fraud expert Avivah Litan saying the credit bureaus make about $1 every time they sell your credit file to a potential creditor (or identity thief posing as you). According to recent stats from the New York Federal Reserve, there were around 145 million hard credit pulls in the fourth quarter of 2018 (it’s not known how many of those were legitimate or desired).
But there is something you can do to stop the Equifax and the other bureaus from profiting this way: Freeze your credit files with them.
A security freeze essentially blocks any potential creditors from being able to view or “pull” your credit file, unless you affirmatively unfreeze or thaw your file beforehand. With a freeze in place on your credit file, ID thieves can apply for credit in your name all they want, but they will not succeed in getting new lines of credit in your name because few if any creditors will extend that credit without first being able to gauge how risky it is to loan to you. And it’s now free for all Americans.
This post explains in detail what’s involved in freezing your files; how to place, thaw or remove a freeze; the limitations of a freeze and potential side effects; and alternatives to freezes.
What’s wrong with just using credit monitoring, you might ask? These services do not prevent thieves from using your identity to open new lines of credit, and from damaging your good name for years to come in the process. The most you can hope for is that credit monitoring services will alert you soon after an ID thief does steal your identity.
If past experience is any teacher, anyone with a freeze on their credit file will need to briefly thaw their file(s) at Equifax before successfully signing up for the service when it’s offered. Since a law mandating free freezes across the land went into effect, all three bureaus have made it significantly easier to place and lift security freezes.
Probably too easy, in fact. Especially for people who had freezes in place before Equifax revamped its freeze portal. Those folks were issued a numeric PIN to lift, thaw or remove a freeze, but Equifax no longer lets those users do any of those things online with just the PIN.
These days, to create an account at the MyEquifax portal, one need only supply name, address, Social Security number, date of birth, any phone number (all data points exposed in the Equifax breach, and in any case widely available for sale in the cybercrime underground) and answer 4 multiple-guess questions whose answers are often available in public records or on social media.
And so this is yet another reason why you should freeze your credit: If you don’t sign up as you at MyEquifax, someone else might do it for you.
What else can you do in the meantime? Be wary of any phone calls or emails you didn’t sign up for that invoke this data breach settlement and ask you to provide personal and/or financial information.
And if you haven’t done so lately, go get a free copy of your credit report from annualcreditreport.com; by law all Americans are entitled to a free report from each of the major bureaus annually. You can opt for one report, or all three at once. Either way, make sure to read the report(s) closely and dispute anything that looks amiss.
Cloud hosting provider iNSYNQ says it is trying to recover from a ransomware attack that shut down its network and has left customers unable to access their accounting data for the past three days. Unfortunately for iNSYNQ, the company appears to be turning a deaf ear to the increasingly anxious cries from its users for more information about the incident.
Gig Harbor, Wash.-based iNSYNQ specializes in providing cloud-based QuickBooks accounting software and services. In a statement posted to its status page, iNSYNQ said it experienced a ransomware attack on July 16, and took its network offline in a bid to contain the spread of the malware.
“The attack impacted data belonging to certain iNSYNQ clients, rendering such data inaccessible,” the company said. “As soon as iNSYNQ discovered the attack, iNSYNQ took steps to contain it. This included turning off some servers in the iNSYNQ environment.”
iNSYNQ said it has engaged outside cybersecurity assistance and to determine whether any customer data was accessed without authorization, but that so far it has no estimate for when those files might be available again to customers.
Meanwhile, iNSYNQ’s customers — many of them accountants who manage financial data for a number of their own clients — have taken to Twitter to vent their frustration over a lack of updates since that initial message to users.
In response, the company appears to have simply deleted or deactivated its Twitter account (a cached copy from June 2019 is available here). Several customers venting about the outage on Twitter also accused the company of unpublishing negative comments about the incident from its Facebook page.
Some of those customers also said iNSYNQ initially blamed the outage on an alleged problem with U.S.-based nationwide cable ISP giant Comcast. Meanwhile, competing cloud hosting providers have been piling on to the tweetstorms about the iNSYNQ outage by marketing their own services, claiming they would never subject their customers to a three-day outage.
iNSYNQ has not yet responded to requests for comment.
There is no question that a ransomware infestation at any business — let alone a cloud data provider — can quickly turn into an all-hands-on-deck, hair-on-fire emergency that diverts all attention to fixing the problem as soon as possible.
But that is no excuse for leaving customers in the dark, and for not providing frequent and transparent updates about what the victim organization is doing to remediate the matter. Particularly when the cloud provider in question posts constantly to its blog about how companies can minimize their risk from such incidents by trusting it with their data.
Ransomware victims perhaps in the toughest spot include those providing cloud data hosting and software-as-service offerings, as these businesses are completely unable to serve their customers while a ransomware infestation is active.
The FBI and multiple security firms have advised victims not to pay any ransom demands, as doing so just encourages the attackers and in any case may not result in actually regaining access to encrypted files.
In practice, however, many cybersecurity consulting firms are quietly urging their customers that paying up is the fastest route back to business-as-usual. It’s not hard to see why: Having customer data ransomed or stolen can send many customers scrambling to find new providers. As a result, the temptation to simply pay up may become stronger with each passing day.
That’s exactly what happened in February, when cloud payroll data provider Apex Human Capital Management was knocked offline for three days following a ransomware infestation.
On Christmas Eve 2018, cloud hosting provider Dataresolution.net took its systems offline in response to a ransomware outbreak on its internal networks. The company was adamant that it would not pay the ransom demand, but it ended up taking several weeks for customers to fully regain access to their data.
KrebsOnSecurity will endeavor to update this story as more details become available. Any iNSYNQ affected by the outage is welcome to contact this author via Twitter (my direct messages are open to all) or at krebsonsecurity @ gmail.com.
“It takes a certain kind of man with a certain reputation
To alleviate the cash from a whole entire nation…”
KrebsOnSecurity has seen some creative yet truly bizarre ads for dodgy services in the cybercrime underground, but the following animated advertisement for a popular credit card fraud shop likely takes the cake.
The name of this particular card shop won’t be mentioned here, and its various domain names featured in the video have been pixelated so as not to further promote the online store in question.
But points for knowing your customers, and understanding how to push emotional buttons among a clientele that mostly views America’s financial system as one giant ATM that never seems to run out of cash.
WARNING: Some viewers may find this video disturbing. Also, it is almost certainly Not Safe for Work.
The above commercial is vaguely reminiscent of the slick ads produced for and promoted by convicted Ukrainian credit card fraudster Vladislav “BadB” Horohorin, who was sentenced in 2013 to serve 88 months in prison for his role in the theft of more than $9 million from RBS Worldpay, an Atlanta-based credit card processor. (In February 2017, Horohorin was released and deported from the United States. He now works as a private cybersecurity consultant).
The clip above is loosely based on the 2016 music video, “Party Like a Russian,” produced by British singer-songwriter Robbie Williams.
Tip of the hat to Alex Holden of Hold Security for finding and sharing this video.
For at least the past decade, a computer crook variously known as “Yalishanda,” “Downlow” and “Stas_vl” has run one of the most popular “bulletproof” Web hosting services catering to a vast array of phishing sites, cybercrime forums and malware download servers. What follows are a series of clues that point to the likely real-life identity of a Russian man who appears responsible for enabling a ridiculous amount of cybercriminal activity on the Internet today.
KrebsOnSecurity began this research after reading a new academic paper on the challenges involved in dismantling or disrupting bulletproof hosting services, which are so called because they can be depended upon to ignore abuse complaints and subpoenas from law enforcement organizations. We’ll get to that paper in a moment, but for now I mention it because it prompted me to check and see if one of the more infamous bulletproof hosters from a decade ago was still in operation.
Sure enough, I found that Yalishanda was actively advertising on cybercrime forums, and that his infrastructure was being used to host hundreds of dodgy sites. Those include a large number of cybercrime forums and stolen credit card shops, ransomware download sites, Magecart-related infrastructure, and a metric boatload of phishing Web sites mimicking dozens of retailers, banks and various government Web site portals.
I first encountered Yalishanda back in 2010, after writing about “Fizot,” the nickname used by another miscreant who helped customers anonymize their cybercrime traffic by routing it through a global network of Microsoft Windows computers infected with a powerful malware strain called TDSS.
After that Fizot story got picked up internationally, KrebsOnSecurity heard from a source who suggested that Yalishanda and Fizot shared some of the same infrastructure.
In particular, the source pointed to a domain that was live at the time called mo0be-world[.]com, which was registered in 2010 to an Aleksandr Volosovyk at the email address email@example.com. Now, normally cybercriminals are not in the habit of using their real names in domain name registration records, particularly domains that are to be used for illegal or nefarious purposes. But for whatever reason, that is exactly what Mr. Volosovyk appears to have done.WHO IS YALISHANDA?
The one or two domain names registered to Aleksandr Volosovyk and that mail.ru address state that he resides in Vladivostok, which is a major Pacific port city in Russia that is close to the borders with China and North Korea. The nickname Yalishanda means “Alexander” in Mandarin (亚历山大).
Here’s a snippet from one of Yalishanda’s advertisements to a cybercrime forum in 2011, when he was running a bulletproof service under the domain real-hosting[.]biz:
-Based in Asia and Europe.
-It is allowed to host: ordinary sites, doorway pages, satellites, codecs, adware, tds, warez, pharma, spyware, exploits, zeus, IRC, etc.
-Passive SPAM is allowed (you can spam sites that are hosted by us).
-Web spam is allowed (Hrumer, A-Poster ….)
-Forbidden: Any outgoing Email spam, DP, porn, phishing (exclude phishing email, social networks)
There is a server with instant activation under botnets (zeus) and so on. The prices will pleasantly please you! The price depends on the specific content!!!!
Yalishanda would re-brand and market his pricey bulletproof hosting services under a variety of nicknames and cybercrime forums over the years, including one particularly long-lived abuse-friendly project aptly named abushost[.]ru.
In a talk given at the Black Hat security conference in 2017, researchers from cyber intelligence firm Intel 471 labeled Yalishanda as one the “top tier” bulletproof hosting providers worldwide, noting that in just one 90-day period in 2017 his infrastructure was seen hosting sites tied to some of the most advanced malware contagions at the time, including the Dridex and Zeus banking trojans, as well as a slew of ransomware operations.
“Any of the actors that can afford his services are somewhat more sophisticated than say the bottom feeders that make up the majority of the actors in the underground,” said Jason Passwaters, Intel 471’s chief operating officer. “Bulletproof hosting is probably the biggest enabling service that you find in the underground. If there’s any one group operation or actor that touches more cybercriminals, it’s the bulletproof hosters.”
Passwaters told Black Hat attendees that Intel471 wasn’t convinced Alex was Yalishanda’s real name. I circled back with Intel 471 this week to ask about their ongoing research into this individual, and they confided that they knew at the time Yalishanda was in fact Alexander Volosovyk, but simply didn’t want to state his real name in a public setting.
KrebsOnSecurity uncovered strong evidence to support a similar conclusion. In 2010, this author received a massive data dump from a source that had hacked into or otherwise absconded with more than four years of email records from ChronoPay — at the time a major Russian online payment provider whose CEO and co-founders were the chief subjects of my 2014 book, Spam Nation: The Inside Story of Organized Cybercrime.
Querying those records on Yalishanda’s primary email address — firstname.lastname@example.org — reveal that this individual in 2010 sought payment processing services from ChronoPay for a business he was running which sold counterfeit designer watches.
As part of his application for service, the person using that email address forwarded six documents to ChronoPay managers, including business incorporation and banking records for companies he owned in China, as well as a full scan of his Russian passport.
That passport, pictured below, indicates that Yalishanda’s real name is Alexander Alexandrovich Volosovik. The document shows he was born in Ukraine and is approximately 36 years old.
According to Intel 471, Yalishanda lived in Beijing prior to establishing a residence in Vladivostok (that passport above was issued by the Russian embassy in Beijing). The company says he moved to St. Petersburg, Russia approximately 18 months ago.
His current bulletproof hosting service is called Media Land LLC. This finding is supported by documents maintained by Rusprofile.ru, which states that an Alexander Volosovik is indeed the director of a St. Petersburg company by the same name.ARMOR-PIERCING BULLETS?
Bulletproof hosting administrators operating from within Russia probably are not going to get taken down or arrested, provided they remain within that country (or perhaps within the confines of the former republics of the Soviet Union, known as the Commonwealth of Independent States).
That’s doubly so for bulletproof operators who are careful to follow the letter of the law in those regions — i.e., setting up official companies that are required to report semi-regularly on various aspects of their business, as Mr. Volosovik clearly has done.
However, occasionally big-time bulletproof hosters from those CIS countries do get disrupted and/or apprehended. On July 11, law enforcement officials in Ukraine announced they’d conducted 29 searches and detained two individuals in connection with a sprawling bulletproof hosting operation.
The press release from the Ukrainian prosecutor general’s office doesn’t name the individuals arrested, but sources tell KrebsOnSecurity that one of them was Mikhail Rytikov, a man U.S. authorities say was a well-known bulletproof hoster who operated under the nickname “AbdAllah.”
In 2015, the U.S. Justice Department named Rytikov as a key infrastructure provider for two Russian hackers — Vladimir Drinkman and Alexandr Kalinin — in a cybercrime spree the government called the largest known data breach at the time.
According to the Justice Department, Drinkman and his co-defendants were responsible for hacks and digital intrusions against NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.
Whether AbdAllah ever really faces justice for his alleged crimes remains to be seen. Ukraine does not extradite citizens, as the U.S. authorities have requested in this case. And we have seen time and again how major cybercriminals get raided and detained by local and federal authorities there, only to quickly re-emerge and resume operations shortly thereafter, while the prosecution against them goes nowhere.
Some examples of this include several Ukrainian men arrested in 2010 and accused of running an international crime and money laundering syndicate that used a custom version of the Zeus trojan to siphon tens of millions of dollars from hacked small businesses in the U.S. and Europe. To my knowledge, none of the Ukrainian men that formed the core of that operation were ever prosecuted, reportedly because they were connected to influential figures in the Ukrainian government and law enforcement.
Intel 471’s Passwater said something similar happened in December 2016, when authorities in the U.S., U.K. and Europe dismantled Avalanche, a distributed, cloud-hosting network that was rented out as a bulletproof hosting enterprise for countless malware and phishing attacks.
Prior to that takedown, Passwater said, somehow an individual connected to Avalanche who went by the nickname “Sosweet” got a tip about an impending raid.
“Sosweet was raided in December right before Avalanche was taken down, [and] we know that he was tipped off because of corruption [because] 24 hours later the guy was back in service and has all his stuff back up,” Passwater said.
The same also appears to be true for several Ukrainian men arrested in 2011 on suspicion of building and disseminating Conficker, a malware strain that infected millions of computers worldwide and prompted an unprecedented global response from the security industry.
So if a majority of bulletproof hosting businesses operate primarily out of countries where the rule of law is not strong and/or where corruption is endemic, is there any hope for disrupting these dodgy businesses?
Here we come full circle to the academic report mentioned briefly at the top of this story: The answer seems to be — like most things related to cybercrime — “maybe,” provided the focus is on attempting to interfere with their ability to profit from such activities.
That paper, titled Platforms in Everything: Analyzing Ground-Truth Data on the Anatomy and Economics of Bulletproof Hosting, was authored by researchers at New York University, Delft University of Technology, King Saud University and the Dutch National High-Tech Crimes Unit. Unfortunately, it has not yet been released publicly, and KrebsOnSecurity does not have permission yet to publish it.
The study examined the day-to-day operations of MaxiDed, a bulletproof hosting operation based in The Netherlands that was dismantled last summer after authorities seized its servers. The paper’s core findings suggest that because profit margins for bulletproof hosting (BPH) operations are generally very thin, even tiny disruptions can quickly push these businesses into the red.
“We demonstrate the BPH landscape to have further shifted from agile resellers towards marketplace platforms with an oversupply of resources originating from hundreds of legitimate upstream hosting providers,” the researchers wrote. “We find the BPH provider to have few choke points in the supply chain amenable to intervention, though proﬁt margins are very slim, so even a marginal increase in operating costs might already have repercussions that render the business unsustainable.”
The cybercriminals behind the GandCrab ransomware-as-a-service (RaaS) offering recently announced they were closing up shop and retiring after having allegedly earned more than $2 billion in extortion payments from victims. But a growing body of evidence suggests the GandCrab team have instead quietly regrouped behind a more exclusive and advanced ransomware program known variously as “REvil,” “Sodin,” and “Sodinokibi.”
“We are getting a well-deserved retirement,” the GandCrab administrator(s) wrote in their farewell message on May 31. “We are a living proof that you can do evil and get off scot-free.”
However, it now appears the GandCrab team had already begun preparations to re-brand under a far more private ransomware-as-a-service offering months before their official “retirement.”
In late April, researchers at Cisco Talos spotted a new ransomware strain dubbed Sodinokibi that was used to deploy GandCrab, which encrypts files on infected systems unless and until the victim pays the demanded sum. A month later, GandCrab would announce its closure.
Meanwhile, in the first half of May an individual using the nickname “Unknown” began making deposits totaling more than USD $130,000 worth of virtual currencies on two top cybercrime forums. The down payments were meant to demonstrate the actor meant business in his offer to hire just a handful of affiliates to drive a new, as-yet unnamed ransomware-as-a-service offering.
“We are not going to hire as many people as possible,” Unknown told forum members in announcing the new RaaS program. “Five affiliates more can join the program and then we’ll go under the radar. Each affiliate is guaranteed USD 10,000. Your cut is 60 percent at the beginning and 70 percent after the first three payments are made. Five affiliates are guaranteed [USD] 50,000 in total. We have been working for several years, specifically five years in this field. We are interested in professionals.”
Asked by forum members to name the ransomware service, Unknown said it had been mentioned in media reports but that he wouldn’t be disclosing technical details of the program or its name for the time being.
Unknown said it was forbidden to install the new ransomware strain on any computers in the Commonwealth of Independent States (CIS), which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.
The prohibition against spreading malware in CIS countries has long been a staple of various pay-per-install affiliate programs that are operated by crooks residing in those nations. The idea here is not to attract attention from local law enforcement responding to victim complaints (and/or perhaps to stay off the radar of tax authorities and extortionists in their hometowns).
But Kaspersky Lab discovered that Sodinokobi/REvil also includes one other nation on its list of countries that affiliates should avoid infecting: Syria. Interestingly, latter versions of GandCrab took the same unusual step.
What’s the significance of the Syria connection? In October 2018, a Syrian man tweeted that he had lost access to all pictures of his deceased children after his computer got infected with GandCrab.
“They want 600 dollars to give me back my children, that’s what they’ve done, they’ve taken my boys away from me for a some filthy money,” the victim wrote. “How can I pay them 600 dollars if I barely have enough money to put food on the table for me and my wife?”
That heartfelt appeal apparently struck a chord with the developer(s) of GandCrab, who soon after released a decryption key that let all GandCrab victims in Syria unlock their files for free.
But this rare display of mercy probably cost the GandCrab administrators and its affiliates a pretty penny. That’s because a week after GandCrab released decryption keys for all victims in Syria, the No More Ransom project released a free GandCrab decryption tool developed by Romanian police in collaboration with law enforcement offices from a number of countries and security firm Bitdefender.
The GandCrab operators later told affiliates that the release of the decryption keys for Syrian victims allowed the entropy used by the random number generator for the ransomware’s master key to be calculated. Approximately 24 hours after NoMoreRansom released its free tool, the GandCrab team shipped an update that rendered it unable to decrypt files.
There are also similarities between the ways that both GandCrab and REvil generate URLs that are used as part of the infection process, according a recent report from Dutch security firm Tesorion.
“Even though the code bases differ significantly, the lists of strings that are used to generate the URLs are very similar (although not identical), and there are some striking similarities in how this specific part of the code works, e.g., in the somewhat far-fetched way that the random length of the filename is repeatedly recalculated,” Tesorion observed.
My guess is the GandCrab team has not retired, and has simply regrouped and re-branded due to the significant amount of attention from security researchers and law enforcement investigators. It seems highly unlikely that such a successful group of cybercriminals would just walk away from such an insanely profitable enterprise.
The U.S. Federal Election Commission (FEC) said today political campaigns can accept discounted cybersecurity services from companies without running afoul of existing campaign finance laws, provided those companies already do the same for other non-political entities. The decision comes amid much jostling on Capitol Hill over election security at the state level, and fresh warnings from U.S. intelligence agencies about impending cyber attacks targeting candidates in the lead up to the 2020 election.
Current campaign finance law prohibits corporate contributions to campaigns, and election experts have worried this could give some candidates pause about whether they can legally accept low- to no-cost services from cybersecurity companies.
But at an FEC meeting today, the commission issued an advisory opinion (PDF) that such assistance does not constitute an in-kind contribution, as long as the cybersecurity firm already offers discounted solutions to similarly situated non-political organizations, such as small nonprofits.
The FEC’s ruling comes in response to a petition by California-based Area 1 Security, whose core offering focuses on helping clients detect and block phishing attacks. The company said it asked the FEC’s opinion on the matter after several campaigns that had reached out about teaming up expressed hesitation given the commission’s existing rules.
In June, Area 1 petitioned the FEC for clarification on the matter, saying it currently offers free and low-cost services to certain clients which are capped at $1,337. The FEC responded with a draft opinion indicating such offering likely would amount to an in-kind contribution that might curry favor among politicians, and urged the company to resubmit its request focusing on the capped-price offering.
Area 1 did so, and at today’s hearing the FEC said “because Area 1 is proposing to charge qualified federal candidates and political committees the same as it charges its qualified non-political clients, the Commission concludes that its proposal is consistent with Area 1’s ordinary business practices and therefore would not result in Area 1 making prohibited in-kind contributions to such federal candidates and political committees.”POLICY BY PIECEMEAL
The decision is the latest in a string of somewhat narrowly tailored advisories from the FEC related to cybersecurity offerings aimed at federal candidates and political committees. Most recently, the commission ruled that the nonprofit organization Defending Digital Campaigns could provide free cybersecurity services to candidates, but according to The New York Times that decision only applied to nonpartisan, nonprofit groups that offer the same services to all campaigns.
Last year, the FEC granted a similar exemption to Microsoft Corp., ruling that the software giant could offer “enhanced online account security services to its election-sensitive customers at no additional cost” because Microsoft would be shoring up defenses for its existing customers and not seeking to win favor among political candidates.
Dan Petalas is a former general counsel at the FEC who represents Area 1 as an attorney at the law firm Garvey Schubert Barer. Petalas praised today’s ruling, but said action by Congress is probably necessary to clarify the matter once and for all.
“Congress could take the uncertainty away by amending the law to say security services provided to campaigns to do not constitute an in-kind contribution,” Petalas said. “These candidates are super vulnerable and not well prepared to address cybersecurity threats, and I think that would be a smart thing for Congress to do given the situation we’re in now.”‘A RECIPE FOR DISASTER’
The FEC’s decision comes as federal authorities are issuing increasingly dire warnings that the Russian phishing attacks, voter database probing, and disinformation campaigns that marked the election cycles in 2016 and 2018 were merely a dry run for what campaigns could expect to face in 2020.
In April, FBI Director Christopher Wray warned that Russian election meddling posed an ongoing “significant counterintelligence threat,” and that the shenanigans from 2016 — including the hacking of the Democratic National Committee and the phishing of Hillary Clinton’s campaign chairman and the subsequent mass leak of internal emails — were just “a dress rehearsal for the big show in 2020.”
Adav Noti, a former FEC general counsel who is now senior director of the nonprofit, nonpartisan Campaign Legal Center, said the commission is “incredibly unsuited to the danger that the system is facing,” and that Congress should be taking a more active roll.
“The FEC is an agency that can’t even do the most basic things properly and timely, and to ask them to solve this problem quickly before the next election in an area where they don’t really have any expertise is a recipe for disaster,” Noti said. “Which is why we see these weird advisory opinions from them with no real legal basis or rationale. They’re sort of making it up as they go along.”
In May, Sen. Ron Wyden (D-Ore.) introduced the Federal Campaign Cybersecurity Assistance Act, which would allow national party committees to provide cybersecurity assistance to state parties, individuals running for office and their campaigns.
Sen. Wyden also has joined at least a dozen other senators — including many who are currently running as Democratic candidates in the 2020 presidential race — in introducing the “Protecting American Votes and Elections (PAVE) Act,” which would mandate the use of paper ballots in U.S. elections and ban all internet, Wi-Fi and mobile connections to voting machines in order to limit the potential for cyber interference.
As Politico reports, Wyden’s bill also would give the Department of Homeland Security the power to set minimum cybersecurity standards for U.S. voting machines, authorize a one-time $500 million grant program for states to buy ballot-scanning machines to count paper ballots, and require states to conduct risk-limiting audits of all federal elections in order to detect any cyber hacks.BIPARTISAN BLUES
Earlier this week, FBI Director Wray and Director of National Intelligence Dan Coats briefed lawmakers in the House and Senate on threats to the 2020 election in classified hearings. But so far, action on any legislative measures to change the status quo has been limited.
Democrats blame Senate Majority Leader Mitch McConnell for blocking any action on the bipartisan bills to address election security. Prior to meeting with intelligence officials, McConnell took to the Senate floor Wednesday to allege Democrats had “already made up their minds before we hear from the experts today that a brand-new, sweeping Washington, D.C. intervention is just what the doctor ordered.”
“Make no mistake,” McConnell said. “Many of the proposals labeled by Democrats to be ‘election security’ measures are indeed election reform measures that are part of the left’s wish list I’ve called the Democrat Politician Protection Act.”
But as Politico reporter Eric Geller tweeted yesterday, if lawmakers are opposed to requiring states to follow the almost universally agreed-upon best practices for election security, they should just say so.
“Experts have been urging Congress to adopt tougher standards for years,” Geller said. “Suggesting that the jury is still out on what those best practices are is factually inaccurate.”
Noti said he had hoped election security would emerge as a rare bipartisan issue in this Congress. After all, no candidate wants to have their campaign hacked or elections tampered with by foreign powers — which could well call into question the results of a race for both sides.
These days he’s not so sanguine.
“This is a matter of national security, which is one of the core functions of the federal government,” Noti said. “Members of Congress are aware of this issue and there is a desire to do something about it. But right now the prospect of Congress doing something — even if most lawmakers would agree with it — is small.”
Microsoft today released software updates to plug almost 80 security holes in its Windows operating systems and related software. Among them are fixes for two zero-day flaws that are actively being exploited in the wild, and patches to quash four other bugs that were publicly detailed prior to today, potentially giving attackers a head start in working out how to use them for nefarious purposes.
Zero-days and publicly disclosed flaws aside for the moment, probably the single most severe vulnerability addressed in this month’s patch batch (at least for enterprises) once again resides in the component of Windows responsible for automatically assigning Internet addresses to host computers — a function called the “Windows DHCP client.”
The DHCP weakness (CVE-2019-0785) exists in most supported versions of Windows server, from Windows Server 2012 through Server 2019.
Microsoft said an unauthenticated attacker could use the DHCP flaw to seize total, remote control over vulnerable systems simply by sending a specially crafted data packet to a Windows computer. For those keeping count, this is the fifth time this year that Redmond has addressed such a critical flaw in the Windows DHCP client.
All told, only 15 of the 77 flaws fixed today earned Microsoft’s most dire “critical” rating, a label assigned to flaws that malware or miscreants could exploit to commandeer computers with little or no help from users. It should be noted that 11 of the 15 critical flaws are present in or are a key component of the browsers built into Windows — namely, Edge and Internet Exploder Explorer.
One of the zero-day flaws — CVE-2019-1132 — affects Windows 7 and Server 2008 systems. The other — CVE-2019-0880 — is present in Windows 8.1, Server 2012 and later operating systems. Both would allow an attacker to take complete control over an affected system, although each is what’s known as an “elevation of privilege” vulnerability, meaning an attacker would already need to have some level of access to the targeted system.
CVE-2019-0865 is a denial-of-service bug in a Microsoft open-source cryptographic library that could be used to tie up system resources on an affected Windows 8 computer. It was publicly disclosed a month ago by Google’s Project Zero bug-hunting operation after Microsoft reportedly failed to address it within Project Zero’s stated 90-day disclosure deadline.
The other flaw publicly detailed prior to today is CVE-2019-0887, which is a remote code execution flaw in the Remote Desktop Services (RDP) component of Windows. However, this bug also would require an attacker to already have compromised a target system.
Mercifully, there do not appear to be any security updates for Adobe Flash Player this month.
Standard disclaimer: Patching is important, but it usually doesn’t hurt to wait a few days before Microsoft irons out any wrinkles in the fixes, which sometimes introduce stability or usability issues with Windows after updating (KrebsOnSecurity will endeavor to update this post in the event that any big issues with these patches emerge).
As such, it’s a good idea to get in the habit of backing up your system — or at the very least your data — before applying any updates. The thing is, newer versions of Windows (e.g. Windows 10+) by default will go ahead and decide for you when that should be done (often this is in the middle of the night). But that setting can be changed.
If you experience any problems installing any of the patches this month, please feel free to leave a comment about it below; there’s a better-than-even chance that other readers have experienced the same and may even chime in with some helpful advice and tips.
Tenable [full disclosure: Tenable is an advertiser on this blog].
The crooks behind an affiliate program that paid cybercriminals to install the destructive and wildly successful GandCrab ransomware strain announced on May 31, 2019 they were terminating the program after allegedly having earned more than $2 billion in extortion payouts from victims. What follows is a deep dive into who may be responsible for recruiting new members to help spread the contagion.
Like most ransomware strains, the GandCrab ransomware-as-a-service offering held files on infected systems hostage unless and until victims agreed to pay the demanded sum. But GandCrab far eclipsed the success of competing ransomware affiliate programs largely because its authors worked assiduously to update the malware so that it could evade antivirus and other security defenses.
In the 15-month span of the GandCrab affiliate enterprise beginning in January 2018, its curators shipped five major revisions to the code, each corresponding with sneaky new features and bug fixes aimed at thwarting the efforts of computer security firms to stymie the spread of the malware.
“In one year, people who worked with us have earned over US $2 billion,” read the farewell post by the eponymous GandCrab identity on the cybercrime forum Exploit[.]in, where the group recruited many of its distributors. “Our name became a generic term for ransomware in the underground. The average weekly income of the project was equal to US $2.5 million.”
The message continued:
“We ourselves have earned over US $150 million in one year. This money has been successfully cashed out and invested in various legal projects, both online and offline ones. It has been a pleasure to work with you. But, like we said, all things come to an end. We are getting a well-deserved retirement. We are a living proof that you can do evil and get off scot-free. We have proved that one can make a lifetime of money in one year. We have proved that you can become number one by general admission, not in your own conceit.”
Evil indeed, when one considers the damage inflicted on so many individuals and businesses hit by GandCrab — easily the most rapacious and predatory malware of 2018 and well into 2019.
The GandCrab identity on Exploit[.]in periodically posted updates about victim counts and ransom payouts. For example, in late July 2018, GandCrab crowed that a single affiliate of the ransomware rental service had infected 27,031 victims in the previous month alone, receiving about $125,000 in commissions.
The following month, GandCrab bragged that the program in July 2018 netted almost 425,000 victims and extorted more than one million dollars worth of cryptocurrencies, much of which went to affiliates who helped to spread the infections.
Russian security firm Kaspersky Lab estimated that by the time the program ceased operations, GandCrab accounted for up to half of the global ransomware market.ONEIILK2
It remains unclear how many individuals were active in the core GandCrab malware development team. But KrebsOnSecurity located a number of clues that point to the real-life identity of a Russian man who appears to have been put in charge of recruiting new affiliates for the program.
In November 2018, a GandCrab affiliate posted a screenshot on the Exploit[.]in cybercrime forum of a private message between himself and a forum member known variously as “oneiilk2” and “oneillk2” that showed the latter was in charge of recruiting new members to the ransomware earnings program.
Oneiilk2 also was a successful GandCrab affiliate in his own right. In May 2018, he could be seen in multiple Exploit[.]in threads asking for urgent help obtaining access to hacked businesses in South Korea. These solicitations go on for several weeks that month — with Oneiilk2 saying he’s willing to pay top dollar for the requested resources. At the same time, Oneiilk2 can be seen on Exploit asking for help figuring out how to craft a convincing malware lure using the Korean alphabet.
Later in the month, Oneiilk2 says he no longer needs assistance on that request. Just a few weeks later, security firms began warning that attackers were staging a spam campaign to target South Korean businesses with version 4.3 of GandCrab.HOTTABYCH
When Oneiilk2 registered on Exploit in January 2015, he used the email address email@example.com. That email address and nickname had been used since 2009 to register multiple identities on more than a half dozen cybercrime forums.
In 2010, the hottabych_k2 address was used to register the domain name dedserver[.]ru, a site which marketed dedicated Web servers to individuals involved in various cybercrime projects. That domain registration record included the Russian phone number +7-951-7805896, which mail.ru’s password recovery function says is indeed the phone number used to register the hottabych_k2 email account.
At least four posts made in 2010 to the hosting review service makeserver.ru advertise Dedserver and include images watermarked with the nickname “oneillk2.”
Dedserver also heavily promoted a virtual private networking (VPN) service called vpn-service[.]us to help users obfuscate their true online locations. It’s unclear how closely connected these businesses were, although a cached copy of the Dedserver homepage at Archive.org from 2010 suggests the site’s owners claimed it as their own.
Vpn-service[.]us was registered to the email address firstname.lastname@example.org by an individual who used the nickname (and sometimes password) — “Metall2” — across multiple cybercrime forums.
Around the same time the GandCrab affiliate program was kicking into high gear, Oneiilk2 had emerged as one of the most trusted members of Exploit and several other forums. This was evident by measuring the total “reputation points” assigned to him, which are positive or negative feedback awarded by other members with whom the member has previously transacted.
In late 2018, Oneiilk2 was one of the top 20 highest-rated members among thousands of denizens on the Exploit forum, thanks in no small part to his association with the GandCrab enterprise.
Searching on Oneiilk2’s registration email address email@example.com via sites that track hacked or leaked databases turned up some curious results. Those records show this individual routinely re-used the same password across multiple accounts: 16061991.
For instance, that email address and password shows up in hacked password databases for an account “oneillk2” at zismo[.]biz, a Russian-language forum dedicated to news about various online money-making affiliate programs.
In a post made on Zismo in 2017, Oneiilk2 states that he lives in a small town with a population of around 400,000, and is engaged in the manufacture of furniture.HEAVY METALL
Further digging revealed that the firstname.lastname@example.org address had also been used to register at least two accounts on the social networking site Vkontakte, the Russian-language equivalent of Facebook.
One of those accounts was registered to a “Igor Kashkov” from Magnitogorsk, Russia, a metal-rich industrial town in southern Russia of around 410,000 residents which is home to the largest iron and steel works in the country.
The Kashkov account used the password “hottabychk2,” the phone number 890808981338, and at one point provided the alternative email address “email@example.com.” However, this appears to have been simply an abandoned account, or at least there are only a couple of sparse updates to the profile.
The more interesting Vkontakte account tied to the firstname.lastname@example.org address belongs to a profile under the name “Igor Prokopenko,” who says he also lives in Magnitogorsk. The Igor Prokopenko profile says he has studied and is interested in various types of metallurgy.
There is also a Skype voice-over-IP account tied to an “Igor” from Magnitogorsk whose listed birthday is June 16, 1991. In addition, there is a fairly active Youtube account dating back to 2015 — youtube.com/user/Oneillk2 — that belongs to an Igor Prokopenko from Magnitogorsk.
That Youtube account includes mostly short videos of Mr. Prokopenko angling for fish in a local river and diagnosing problems with his Lada Kalina — a Russian-made automobile line that is quite common across Russia. An account created in January 2018 using the Oneillk2 nickname on a forum for Lada enthusiasts says its owner is 28 years old and lives in Magnitogorsk.
Sources with the ability to check Russian citizenship records identified an Igor Vladimirovich Prokopenko from Magnitogorsk who was born on June 16, 1991. Recall that “16061991” was the password used by countless online accounts tied to both email@example.com and the Oneiilk2/Oneillk2 identities.
To bring all of the above research full circle, Vkontakte’s password reset page shows that the Igor Prokopenko profile is tied to the mobile phone number +7-951-7805896, which is the same number used to set up the email account firstname.lastname@example.org almost 10 years ago.
Mr. Prokopenko did not respond to multiple requests for comment.
It is entirely possible that whoever is responsible for operating the GandCrab affiliate program developed an elaborate, years-long disinformation campaign to lead future would-be researchers to an innocent party.
At the same time, it is not uncommon for many Russian malefactors to do little to hide their true identities — at least early on in their careers — perhaps in part because they perceive that there is little likelihood that someone will bother connecting the dots later on, or because maybe they don’t fear arrest and/or prosecution while they reside in Russia. Anyone doubtful about this dynamic would do well to consult the Breadcrumbs series on this blog, which used similar methods as described above to unmask dozens of other major malware purveyors.
It should be noted that the GandCrab affiliate program took measures to prevent the installation of its ransomware on computers residing in Russia or in any of the countries that were previously part of the Soviet Union — referred to as the Commonwealth of Independent States and including Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. This is a typical precaution taken by cybercriminals running malware operations from one of those countries, as they try to avoid making trouble in their own backyards that might attract attention from local law enforcement.
It might be difficult to fathom how this isn’t already mandatory, but Microsoft Corp. says it will soon force all Cloud Solution Providers (CSPs) that help companies manage their Office365 accounts to use multi-factor authentication. The move comes amid a noticeable uptick in phishing and malware attacks targeting CSP employees and contractors.
When an organization buys Office365 licenses from a reseller partner, the partner is granted administrative privileges in order to help the organization set up the tenant and establish the initial administrator account. Microsoft says customers can remove that administrative access if they don’t want or need the partner to have access after the initial setup.
But many companies partner with a CSP simply to gain more favorable pricing on software licenses — not necessarily to have someone help manage their Azure/O365 systems. And those entities are more likely to be unaware that just by virtue of that partnership they are giving someone at their CSP (or perhaps even outside contractors working for the CSP) full access to all of their organization’s email and files stored in the cloud.
This is exactly what happened with a company whose email systems were rifled through by intruders who broke into PCM Inc., the world’s sixth-largest CSP. The firm had partnered with PCM because doing so was far cheaper than simply purchasing licenses directly from Microsoft, but its security team was unaware that a PCM employee or contractor maintained full access to all of their employees’email and documents in Office365.
As it happened, the PCM employee was not using multi-factor authentication. And when that PCM employee’s account got hacked, so too did many other PCM customers.
KrebsOnSecurity pinged Microsoft this week to inquire whether there was anything the company could be doing to better explain this risk to customers and CSP partners. In response, Microsoft said while its guidance has always been for partners to enable and require multi-factor authentication for all administrators or agent users in the partner tenants, it would soon be making it mandatory.
“To help safeguard customers and partners, we are introducing new mandatory security requirements for the partners participating in the Cloud Solution Provider (CSP) program, Control Panel Vendors, and Advisor partners,” Microsoft said in a statement provided to KrebsOnSecurity.
“This includes enforcing multi-factor authentication for all users in the partner tenants and adopting secure application model for their API integration with Microsoft,” the statement continues. “We have notified partners of these changes and enforcement will roll out over the next several months.”
This is a welcome — if long overdue — change. Countless data breaches are tied to weak or default settings. Whether we’re talking about unnecessary software features turned on, hard-coded passwords, or key security settings that are optional, defaults matter tremendously because far too many people never change them — or they simply aren’t aware that they exist.
A digital intrusion at PCM Inc., a major U.S.-based cloud solution provider, allowed hackers to access email and file sharing systems for some of the company’s clients, KrebsOnSecurity has learned.
El Segundo, Calif. based PCM [NASDAQ:PCMI] is a provider of technology products, services and solutions to businesses as well as state and federal governments. PCM has nearly 4,000 employees, more than 2,000 customers, and generated approximately $2.2 billion in revenue in 2018.
Sources say PCM discovered the intrusion in mid-May 2019. Those sources say the attackers stole administrative credentials that PCM uses to manage client accounts within Office 365, a cloud-based file and email sharing service run by Microsoft Corp.
One security expert at a PCM customer who was recently notified about the incident said the intruders appeared primarily interested in stealing information that could be used to conduct gift card fraud at various retailers and financial institutions.
In that respect, the motivations of the attackers seem similar to the goals of intruders who breached Indian IT outsourcing giant Wipro Ltd. earlier this year. In April, KrebsOnSecurity broke the news that the Wipro intruders appeared to be after anything they could quickly turn into cash, and used their access to harvest gift card information from a number of the company’s customers.
It’s unclear whether PCM was a follow-on victim from the Wipro breach, or if it was attacked separately. As noted in that April story, PCM was one of the companies targeted by the same hacking group that compromised Wipro.
The intruders who hacked into Wipro set up a number of domains that appeared visually similar to that of Wipro customers, and many of those customers responded to the April Wipro breach story with additional information about those attacks.
PCM never did respond to requests for comment on that story. But in a statement shared with KrebsOnSecurity today, PCM said the company “recently experienced a cyber incident that impacted certain of its systems.”
“From its investigation, impact to its systems was limited and the matter has been remediated,” the statement reads. “The incident did not impact all of PCM customers; in fact, investigation has revealed minimal-to-no impact to PCM customers. To the extent any PCM customers were potentially impacted by the incident, those PCM customers have been made aware of the incident and PCM worked with them to address any concerns they had.”
On June 24, PCM announced it was in the process of being acquired by global IT provider Insight Enterprises [NASDAQ:NSIT]. Insight has not yet responded to requests for comment.
Earlier this week, cyber intelligence firm RiskIQ published a lengthy analysis of the hacking group that targeted Wipro, among many other companies. RiskIQ says this group has been active since at least 2016, and posits that the hackers may be targeting gift card providers because they provide access to liquid assets outside of the traditional western financial system.
The breach at PCM is just the latest example of how cybercriminals increasingly are targeting employees who work at cloud data providers and technology consultancies that manage vast IT resources for many clients. On Wednesday, Reuters published a lengthy story on “Cloud Hopper,” the nickname given to a network of Chinese cyber spies that hacked into eight of the world’s biggest IT suppliers between 2014 and 2017.