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Russia's Greatest Weapon May Be Its 

Hackers- 蘇俄駭客 (1)

                                 

In hacker jargon, it’s called a “cyber-to-physical effect.” It’s when a hacker reaches out from the virtual world into the real one—often with catastrophic consequences. The Americans and Israelis pioneered the technique back in 2009 when the Stuxnet program infiltrated Iranian computer systems and wrecked thousands of uranium-enriching centrifuges. But now other players—especially the Russians and Chinese—are getting into the game of remotely using computer networks to destroy infrastructure and threaten human lives. Last year, according to a report by Germany’s Federal Office for Information Security, a blast furnace melted down in an unnamed industrial city in Germany after a digital attack on its control systems, causing “massive damage.”

It nearly happened in the United States too, when unknown hackers succeeded in penetrating U.S. electrical, water and fuel distribution systems early in 2014. While old-fashioned, relatively low-tech data hacks make headlines—for instance, high-profile break-ins over the last 12 months to the email systems and databases of the White House, State Department, Department of Homeland Security, Department of Defense and Sony Pictures Inc.—what has security officials seriously worried is the new and dangerous world of cyber-to-physical infrastructure attacks.

“This is not theoretical,” National Security Agency Director Admiral Michael Rogers told the U.S. House of Representatives’ Intelligence Committee recently. Hacking attacks on the U.S. and its allies are “costing us hundreds of billions of dollars,” Rogers warned, and will result in “truly significant, almost catastrophic failures if we don’t take action.”

According to Alexander Klimburg, an affiliate of the Harvard Kennedy School of Government’s Belfer Center and senior research fellow at the Hague Centre for Strategic Studies, “cyberspace today is like Europe in 1914, before World War I. Governments are like sleepwalkers. They do not comprehend the power of new technology and the consequences of misunderstanding each other’s activities.”

                             

According to the U.S. Intelligence Community’s 2015 “Worldwide Threat Assessment” report, Russia and China are the "most sophisticated nation-state actors” in the new generation of cyberwarfare, and Russian hackers lead in terms of sophistication, programming power and inventiveness. “The threat from China is overinflated, while the threat from Russia is underestimated,” says Jeffrey Carr, head of Web security consultancy Taia Global and author of the book Inside Cyber Warfare. “The Russians are the most technically proficient. For instance, we believe that Russian hackers-for-hire were responsible for the Sony attack.”

Last year hackers gained access to thousands of Sony company emails and threatened further damage unless a film lampooning North Korean leader Kim Jong Un was withdrawn from cinemas. “We spoke to [one of the hackers] via an intermediary,” says Carr. “Even after Sony lost 80 percent of its network capability, the hackers were still operating. That shows an incredibly high level of technical ability.”

The Moscow connection is worrying because Russia is the only country to date to have combined cyberwarfare with assaults by conventional guns and tanks. “The Russia-Georgia war of 2008 was a perfect example of a combined kinetic and cyber operation,” says Carr. “Nobody else has ever done anything like that.”

Similarly, in the wake of Russia’s annexation of Crimea in April 2014, ground assaults were accompanied by a deluge of mostly low-tech cyberassaults on over a hundred government and industrial organizations in Poland and Ukraine, as well as attacks on the European Parliament and the European Commission. Many of these attacks featured a modified version of “BlackEnergy,” a kind of malware program known as a Trojan horse that is designed to remotely take over computers. A network of such infected computers, or “bots,” is known as a “botnet.” This can be mobilized to overwhelm a target server with requests for information and crash it—an attack known as Distributed Denial of Service, or DDoS.

                                   

“The BlackEnergy malware was authored by a Russian hacker and originally used for DDoS attacks, bank frauds and spam distribution,” says Pierluigi Paganini, founder of the Security Affairs blog and a member of a European Union Agency for Network and Information Security working group. “But the new variant was used in targeted attacks on government entities and private companies across a range of industries.”

One of the biggest mysteries of the latest generation of cyberattacks—known in the U.S. government as Offensive Cyber Effects Operations—is working out who is behind them and whether they are being launched with political or criminal intent.

What’s not in doubt is that Russian hackers have long been kings of the cybercrime world. A group of Russians and Ukrainians were named by U.S. federal prosecutors as being behind the biggest cybercrime case in U.S. history, a bank-card fraud spree from 2010 to 2013 that cost companies including J.C. Penney, JetBlue and French retailer Carrefour more than $300 million. A group of Russian “click-jackers” were convicted in the U.S. last year for hijacking users of Apple's iTunes store, Netflix, the U.S. Internal Revenue Service,Amazon.com, ESPN.com and the Wall Street Journal website—as well as computers at NASA.

Another as-yet-unidentified hacking ring, based in a small city in south-central Russia, stole some 1.2 billion Internet logins and passwords and more than 500 million email addresses last year by plundering data from more than 400,000 websites, according to U.S. cybersecurity firm Hold Security. And in February the Moscow-based Internet security company Kaspersky Labs revealed details of the biggest Internet heist of all time—a raid on over 100 banks in Russia, Ukraine, Japan, the United States and Europe from 2013 to 2014. Kaspersky reported seeing evidence of $300 million in losses just from the banks that had hired it to clean up the mess—and estimated that the total amount stolen was likely to be around $900 million.

“This is cybercrime on an industrial scale,” says one Moscow-based Western Internet security consultant, who helped overhaul several Russian banks’ defenses in the wake of the attack. “In one case in Kiev, they made the bank’s ATMs spew out money, which was collected by people walking by.” The techniques used to break into the bank’s electronic systems via flaws in Adobe and Microsoft programs “were not particularly sophisticated,” says the consultant, “but it was amazing how careful they were not to alert the victims and to keep their backdoor into their systems a secret.”

                                

The exact nature of the links between these criminal hackers and the Russian government remains murky. “Cybercrime, cyberterrorism and cyberwarfare share a common technological basis, tools, logistics and operational methods,” says Klimburg. “They can also share the same social networks and have comparable goals. The differences between these categories of cyberactivity are often razor–thin. It’s hard to distinguish in cyberspace between financial and political motivation.”

In particular, the methods of delivering malware into a target computer are identical. Hackers seek vulnerabilities in popular programs that allow them to introduce alien code, in particular a weak spot in the code known as a “zero-day,” meaning it remains unpatched and can be used for an attack before it is discovered by everyone else, so there are zero-days between an attack and the discovery of the vulnerability. A good zero-day vulnerability can be sold for $200,000, says Klimburg, but there are many examples of Russian hackers “lending” their zero-day hacks to the government for espionage purposes, then using them for crime later.

“Hundreds of ‘black-hat’ Russian hackers are doing this for a living—whether it’s at the order of Swiss bankers or Ukrainian oligarchs,” says Carr. “Russian hackers who are caught are given the choice to work for the FSB [Federal Security Service] or to go to jail. The FSB also has some on contract hire.”

There is strong evidence, going back to cyberattacks on Estonia as early as 2007, that Russian cybercriminals were working either with or for the Russian state. But now, it seems, the Kremlin is getting directly involved. U.S. Director of National Intelligence James Clapper told the Senate Armed Services Committee in March that Russia’s Ministry of Defense is “establishing its own cybercommand” responsible for “conducting offensive cyberactivities.” And the Russian government appears to be stepping up funding for the research and development of cybertechnology at world-class computer science centers such as the prestigious St. Petersburg Polytechnic University and Samara State University, according to information gathered by Seattle-based Taia Global.

Possible evidence linking recent hacking attacks on the U.S. government to the Russian state includes the digital signatures of a hacker group known as Advanced Persistent Threat 28 (or APT28, identified by the U.S.-based Internet security company FireEye) and a family of hackers labeled CozyDuke, CosmicDuke, MiniDuke and OnionDuke (spotted by Kaspersky Labs). These groups, which may or may not be related, have some giveaway signatures that tie them to Russia. “Indicators in APT28’s malware suggest that the group consists of Russian speakers operating during business hours in Russia’s major cities,” says a recent FireEye report. “More than half of the malware samples...attributed to APT28 included Russian-language settings.”

                                                 

But the real giveaway is not the forensics of the APT28 codes but their targets over the past five years, which have included Georgia’s ministries of internal affairs and defense, the Polish and Hungarian governments, NATO, the Organization for Security and Co-operation in Europe, the Norwegian army and U.S. defense contractors. The APT28 hacking crew "does not appear to conduct widespread intellectual property theft for economic gain, but instead is focused on collecting intelligence,” says FireEye. “That would be most useful to a government.”

Though there is evidence that the development teams of APT28 and the CosmicDuke, MiniDuke and OnionDuke “worked together and shared same knowledge and coding techniques,” and that they all have Russian origins, it’s likely they are separate groups, says Paganini. “All these groups are state-sponsored hackers, probably backed by the Russian government, though it is likely that they operate under different divisions of the same cyberarmy.”

Was APT28—and the Kremlin—behind hacking attacks on the White House and State Department this year, which cracked open confidential email records (though not, according to a spokesman, the president’s personal email)? The Kremlin strongly denies it. “We know that blaming Russia for everything has turned into a sport,” Kremlin spokesman Dmitry Peskov joked to journalists. “At least they haven't looked for Russian submarines in [Washington's] Potomac River, as has been the case in a few other countries.”

Vladimir Putin's spokesman Dmitry Peskov attends a meeting in the Kremlin in Moscow, on December 25, 2013. There is strong evidence, going back to cyberattacks on Estonia as early as 2007, that Russian cybercriminals were working either with or for the Russian state. But now, it seems, the Kremlin is getting directly involved. KIRILL KUDRYAVTSEV/AFP/GETTY

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11/19/2015