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Malware Used In DNC Breach Found Tracking Ukraine Military

Russian 'Fancy Bear' now tied to Ukraine artillery Android app hack with the same malware used in breach of the Democratic National Committee. Forget that 400-pound hacker sitting on his bed somewhere.
Security researchers have discovered yet another link between the Russian military and the hack of the Democratic National Committee (DNC): this time, in an Android app used by Ukraine's military. Security firm Crowdstrike, which previously had identified a Russian nation-state cyber espionage unit as the perpetrator behind the DNC data breach and leak of emails and other information in the run-up to the US presidential election, recently found the so-called Fancy Bear hacking team's signature spying malware embedded in an Android app originally created by a Ukrainian artillery officer to help calibrate its field artillery operation in the battle against Russian forces. The Android version of the so-called X-Agent backdoor malware is able to track the location of Ukrainian artillery forces, and can hijack communications from the mobile devices running the malware.

Crowdstrike found that X-Agent from late 2014 through 2016 had been surreptitiously injected into the legitimate app used by Ukrainian military to streamline the previously manual process of configuring their older Soviet-era D-30 Howitzer weapon systems, reducing the time to set a target from minutes to under 15 seconds.

The app was available via various online forums and is used by more than 9,000 Ukrainian artillery soldiers. Dmitri Alperovitch, co- founder and CTO of Crowdstrike, says the discovery provides "more conclusive" evidence of a connection between Fancy Bear and the GRU, Russia's military intelligence arm. "And it shows fascinating ways that Russia is using cyber to achieve an affect on the battlefield in Ukraine," he says. A Windows version of X-Agent was used in the DNC hack, allowing the attackers to remotely control the organization's servers and to steal documents and data, such as the internal emails that were later leaked online.

Crowdstrike also has seen iOS versions of the malware, all of which have been only used by Fancy Bear. "The source code is not publicly available, and we've never seen it before in any public or private" forum, Alperovitch says, which led Crowdstrike to conclude X-Agent is the handiwork of Fancy Bear. "We have high confidence that it's evident that whoever did the DNC hack is very closely and operationally linked to the Russian military, and most likely, the GRU," he says. Crowdstrike's new report comes amid a dispute between the incoming administration and the CIA and FBI, which have concluded that Russia was behind the DNC and other hacks and leaks in an effort to influence the outcome of the US presidential election. President-Elect Donald Trump has repeatedly dismissed reports from the US intelligence and cybersecurity communities that Russia was behind the DNC hacks, and maintaining that it could be anyone behind the breaches, including "somebody sitting on their bed who weighs 400 pounds." Alperovitch says with the same group of hackers targeting the Ukraine artillery and the DNC, the source is obvious: "One would have to ask the question, who would have an interest in that? It inevitably comes back to the Russian government," he says. The Cyber Battlefield The hijacked Android app basically lets Ukrainian artillery soldiers automate the process of determining settings for the older Howitzer weaponry, such as wind speed and elevation, in order to more accurately and rapidly operate them. "It was a pen-and-paper process that took minutes [to set up] before you could fire," Alperovitch says.

The app lets them plug in the coordinates, and it calculates the settings automatically. "Russia backdoored the app with X-Agent, giving them the location of anyone using the app" and engage them militarily, he says. According to Crowdstrike's report, publicly sourced reports show that Ukrainian artillery forces have suffered some major losses in the conflict with Russia. "Open source reporting indicates that Ukrainian artillery forces have lost over 50% of their weapons in the 2 years of conflict and over 80% of D-30 howitzers, the highest percentage of loss of any other artillery pieces in Ukraine's arsenal," the report said. "It's interesting that cyber is now migrating this way to the battlefield," Alperovitch says, and it's a "sign of more to come." Related Content: Kelly Jackson Higgins is Executive Editor at DarkReading.com.
She is an award-winning veteran technology and business journalist with more than two decades of experience in reporting and editing for various publications, including Network Computing, Secure Enterprise ...
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‘DNC hackers’ used mobile malware to track Ukrainian artillery – researchers

Frontline battlefield operatives are Fandoids? The Russian hacking crew controversially linked to hacks against the Democrat Party during the US election allegedly used Android malware to track Ukrainian artillery units from late 2014 until 2016, according to new research. Threat intelligence firm CrowdStrike reckons that mobile malware was used to harvest communications and some locational data from infected devices. The operation provided intelligence in order to direct strikes against the artillery ranged against pro-Russian separatists fighting in eastern Ukraine. The mobile malware used in the op is a variant of a remote access tool used against the Democratic National Committee, according to CrowdStrike. X-Agent, the cross platform remote access toolkit in play in both ops, was developed by the "Fancy Bear" hacking group and used exclusively by them, according to the report. This and other similarities have allowed CrowdStrike to link the Ukrainian hacking operation to Fancy Bear (APT 28), a hacking crew linked by US intelligence to GRU, Russia's military intelligence agency. The filename "Попр-Д30.apk" of a malicious Android app used to carry out the spying is linked to a legitimate application which was initially developed domestically within Ukraine by an officer of the 55th Artillery Brigade, according to CrowdStrike. The legitimate app provided a targeting guide to using the D-30 122mm towed howitzer, a Soviet-era artillery piece that’s still in service. This is not something you’re going to find in regular app stores. More than 9,000 artillery personnel in the Ukrainian military used the application, according to the report. Fancy Bear’s X-Agent implant was covertly distributed on Ukrainian military forums within a legitimate Android application, according to CrowdStrike, which says the whole hacking pop bears the hallmarks of a military operation. Successful deployment of the Fancy Bear malware within this application may have facilitated reconnaissance against Ukrainian troops. The ability of this malware to retrieve communications and gross locational data from an infected device makes it an attractive way to identify the general location of Ukrainian artillery forces and engage them. "This cannot be a hands-off group or a bunch of criminals, they need to be in close communication with the Russian military," CrowdStrike co-founder Dmitri Alperovitch told Reuters. ® Sponsored: Flash enters the mainstream. Visit The Register's storage hub

Fancy Bear ramping up infowar against Germany—and rest of West

Enlarge / The bear is back.
It never went away.reader comments 40 Share this story US intelligence agencies have been forthright in their insistence that the Russian government was behind not only the hacking of the Democratic National Committee (DNC) and other political organizations in the US, but a concerted effort to undermine confidence in the results of the US presidential election, including attacks on state election officials' systems.

But the US is not the only country that the Russian government has apparently targeted for these sorts of operations—and the methods used in the DNC hack are being applied increasingly in attempts to influence German politics, Germany's chief of domestic intelligence warned yesterday. In a press release issued on December 8, Germany's Bundesamt für Verfassungsshutz (BfV), the country's domestic intelligence agency, warned of an ever-mounting wave of disinformation and hacking campaigns by Russia focused on increasing the strength of "extremist groups and parties" in Germany and destabilizing the German government.
In addition to propaganda and disinformation campaigns launched through social media, the BfV noted an increased number of "spear phishing attacks against German political parties and parliamentary groups" using the same sort of malware used against the Democratic National Committee in the US. The statement from the BfV came on the same day that Alex Younger, the chief of the United Kingdom's Secret Intelligence Service (MI6) made more veiled references to disinformation and hacking campaigns.
In remarks Younger delivered at Vauxhall Cross, MI6 headquarters, he warned of the mounting risks posed by "hybrid warfare." "The connectivity that is at the heart of globalization can be exploited by States with hostile intent to further their aims deniably," Younger said. "They do this through means as varied as cyber-attacks, propaganda or subversion of democratic process… The risks at stake are profound and represent a fundamental threat to our sovereignty; they should be a concern to all those who share democratic values." The statement from the BfV follows one by German Chancellor Angela Merkel last week voicing concerns that Russia would attempt to interfere in the 2017 German elections.
In the release, BfV Chief Hans-Georg Maassen warned that these "propaganda and disinformation attacks, cyber espionage, and cyber sabotage are part of hybrid threats against Western democracies." He added that the way people use social media to obtain news was aiding disinformation campaigns. "We are concerned that echo chambers are emerging that make the formation of domestic political opinions highly vulnerable to automated opinion-shaping," Maassen warned. The campaign includes the "enormous use of financial resources" to fund disinformation campaigns, the BfV reported.

The disinformation campaigns have been accompanied by an increase in targeted malware attacks on German politicians.

The BfV attributed these attacks to the threat group known as APT 28, also known as Fancy Bear—a group that US intelligence and information security researchers have tied to Russian intelligence.
In 2015, APT 28 "successfully exfiltrated data from the German Bundestag," Germany's parliament, the BfV release noted. Many of these attacks have been launched as "false flag" operations—with the attackers posing as "hacktivists," much as Guccifer 2.0 and the DC Leaks campaigns tied to APT 28 did. The combined use of disinformation in social media and in state-funded media, social media "trolling," and concerted hacking efforts against political institutions is part of a long pattern of behavior by Russia, shaped by Russia's doctrine of information warfare and deterrence. Russia is generally believed to have been behind cyber-attacks and propaganda operations against Estonia and Ukraine, among other former Soviet states, and has reportedly been behind similar operations in Poland. Given the effect that the DNC hack and other information warfare had in the US—not necessarily influencing the final results, but creating the impression that Russia could directly interfere in US politics—Estonian Foreign Minister Sven Mikser told Reuters at a meeting of the Organization for Security and Cooperation in Europe on December 8, "It's a pretty safe bet that they will try to do it again, and they will try to surprise us.

That’s something that we should be very careful to look at and try to protect ourselves from."

Ransomware Hits More Users in U.S. Than in Other Nations, Study...

An analysis by security firm Malwarebytes finds that 26 percent of ransomware attacks blocked by its software targeted U.S. customers with Germany in second place and France in third place. Ransomware attacks continue to rise, and U.S. computer users are getting hit the most according to an analysis released by security firm Malwarebytes on Dec. 8.The company analyzed the telemetry sent from its software running on customers systems between June 1 and October 15, finding hundreds of thousands of ransomware attacks. More than 26 percent of attacks targeted users in the United States, compared to less than 9 percent targeting German users and about 4 percent targeting people in France, the No. 2 and No. 3 most popular targets.“Throughout the whole year, ransomware has been the dominant problem.
It has just kept growing,” Adam Kujawa, director of malware intelligence for Malwarebytes, told eWEEK.Kujawa said that 2016 is undoubtedly the year when ransomware took off, becoming the most significant Internet threat. Other companies’ research agrees.
In its year-end report, security firm Kaspersky Lab found 62 new families of ransomware had hit the internet in 2016, leading to roughly double the number of incidents per user.

At the beginning of the year, Kaspersky’s user population encountered ransomware once every 20 seconds, and by the end of the year, that had dropped to once every 10 seconds. Yet, governments and companies have begun pushing back.
In July, four organizations—including Intel Security, Kaspersky and Europol—banded together to create a common resource for those affected by ransomware.

Called No More Ransom, the group provides descriptions of the various ransomware families and help for those hit by ransomware attacks.Malwarebytes and Kaspersky designated different families of malware as the most popular ransomware variants.

The Cerber malware topped Malwarebytes’ list, with 38 percent of attacks using that ransomware version, while Kaspersky found CTB-Locker made up 25 percent of the ransomware detected by its product.There are also signs that link several families of ransomware to Russia. When Cerber first runs, for example, the malware checks whether it is running from an internet address assigned to Russia.
If the computer is connected to a network in Russia, or a former Soviet republic, the program will not run.Malwarebytes also found that users in city of Las Vegas and nearby Henderson, NV, encountered the most ransomware, but that the Rust Belt had the greatest number of cities in the Top-10, including Memphis, TN, and Toledo, Cleveland and Columbus, OH.Malwarebytes did not account for the distribution of its users in the national numbers, but did normalize for population when determining the most targeted cities.Kaspersky found that the number of modifications to ransomware variants increased by more than 11-fold in 2016, as the malware authors tried to stay ahead of security firms’ software.
In addition, the number of copycats increased as well.

Because ransomware is difficult to create properly, knock-off programs—also known as ‘skiddie’ ransomware—are less likely to be able to decrypt a victim’s files, Kaspersky said.“As the popularity continues to rise and a lesser grade of criminal decides to enter the space, we are likely to encounter more and more ‘ransomware’ that lacks the quality assurance or general coding capability to actually uphold this promise,” the company said. “We expect ‘skiddie’ ransomware to lock away files or system access or simply delete the files, trick the victim into paying the ransom and provide nothing in return.”

UK will retaliate against state-sponsored cyber attacks, Chancellor warns

Middle path between cheek-turning and all-out war Microsoft Decoded Britain will strike back against nations launching cyber attacks on the UK’s critical national infrastructure. Chancellor Philip Hammond promised retaliatory measures against state-sponsored hackers while unveiling an expanded $1.9bn, five-year national cyber security strategy. Crucially this isn’t new money - Hammond’s predecessor George Osborne had announced this in November 2015, during the last spending review. What was new was the pledge Britain would go on the offensive against attackers and not simply turn the other cheek.

The alternative, Hammond, warned was armed war. Also new was a sharper focus, announced by Hammond, around tactics and strategy around cyber security to protect the nation’s critical national infrastructure and business. In October defence secretary Sir Michael Fallon said Britain had used cyber warfare against ISIS as part of the bid to retake the Iraqi city of Mosul. “We will deter those who seek to steal from us, or harm our interests,” Hammond told Microsoft’s Future Decoded conference in London on Tuesday. “We will strengthen law enforcement to raise cost and reduce rewards,” he said of criminal attackers. He promised the UK would “continue to invest in cyber defense capabilities - the ability to trace and retaliate in kind is likely to be the best deterrent. “If we don’t have the ability to respond in cyberspace to attack that takes down power networks or air traffic control systems we would be left with the impossible choice of turning the other cheek or resorting to a military response - that’s a choice we don’t want to face.” “No doubt the precursor to any state-on-state conflict would be a campaign of escalating cyber attack. We will not only defend ourselves in cyberspace but will strike back in kind when attacked.” Moments before Hammond, who chairs the Cabinet’s cross-department cyber-security committee, had listed high-profile cyber attacks against other nation’s critical infrastructure. He didn’t name those responsible, but many attendees inferred the attacks were sponsored by Russia. He referenced the April 2015 takedown of French TV network TV5 initially blamed on ISIS but subsequently attributed to a group of hackers with links to the Kremlin.

A power blackout in the Ukraine following an attack on power utilities has also been blamed on Russia-based hackers. Moscow has backed separatists in the former Soviet republic seeking the reunification of the USSR. Hammond asked that suggestions as to who might be behind those attacks should be written on a postcard and posted to No. 11. Under the new cyber strategy, Hammond pledged a five-year plan to “work to reduce the impact of cyber attacks and to drive up security standards across public and private sectors.” This would involve ensuring government networks are secure and see UK government “taking a more active cyber defence approach” using tactics such as automatic protection to secure UK users “by default”. He pointed to the recent rollout of software to cut to zero an estimated 50,000 fraudulent emails a day from hackers purporting to be from HMRC offering tax refunds in order to obtain people's bank details. Hammond promised “increased investment” in the “next generation” of students and experts and talked up the formation of a virtual link-up between universities to secure laptops, tablets and smartphones. The Chancellor also laid responsibility for greater security at the feet of Britain’s chief executives. Having name-checked TV5 and the Ukraine, he referenced last year’s TalkTalk attack - which is almost certainly not the work of a nation state.

Altogether five suspects, all based in the UK, have so far been arrested in connection with the 2015 hack. That breach saw details of 156,959 customers sprung with TalkTalk fined a record £400,000 by the Information Commissioner. “CEOs and boards must recognise they have responsibility to manage cybersecurity,” Hammond said. “Similarly, technology companies must take responsibility for incorporating the best possible security measures into the technology of their products.

Getting this right will be crucial to keeping Britain at the forefront of digital security technology.” ®

Hack us and you’re basically attacking America, says UK defence sec

And we'll attack you back, promises Defence Secretary Britain is splurging £265m on military cyber security – and that includes offensive capabilities, according to Defence Secretary Sir Michael Fallon. Speaking at the Royal United Services Institute yesterday, Sir Michael said the investment into the Cyber Vulnerability Investigations programme would “help us protect against these threats”. “The average cost of the most severe online security breaches for bigger companies starts at almost £1.5m, up £600,000 from 2014,” said Sir Michael, adding: “It’s only a matter of time before we have to deal with a major attack on UK interests.” So far Britain has managed to avoid the sort of targeted large-scale hacks that have seen big US tech companies such as Yahoo! see 500 million user accounts compromised, or the Target hack which saw millions of credit card and debit card details as well as names and addresses leaked into the hands of cyber-criminals. It seems, from Sir Michael's speech, that Blighty is gearing up to proactively attack any cyber-villains with designs on British internet infrastructure. Lauding various government security initiatives, including the National Cyber Security Centre in Victoria, London, the Defence Secretary said: “This cannot just be about our defence.
It must be about our offence too.
It is important that our adversaries know there is a price to pay if they use cyber weapons against us, and that we have the capability to project power in cyberspace as elsewhere.” Given that most large-scale hacks tend to be backed by states such as China and Russia, it seems that Sir Michael's speech is a public shot across their bows, warning them not to target Blighty – while simultaneously urging NATO to treat the Article 5 collective defence provisions as applying to cyberspace. Originally, Article 5 of the Washington Treaty, which founded NATO, was intended to ensure that any westward expansion of the Soviet Union would trigger World War Three by dragging Britain and America in, thereby keeping the Soviets and the Eastern Bloc's expansionist aims firmly under control. It is unlikely that many countries would take Article 5 seriously in the context of cyberspace, given that many NATO member states effectively ignore the treaty requirement for them to spend two per cent of GDP on military spending. ®

VeraCrypt fixes bugs uncovered in security audit

Security researchers have completed the Open Source Technology Improvement Fund-backed audit of encryption platform VeraCrypt and found eight critical, three medium, and 15 low-severity vulnerabilities. The team behind the popular tool addressed the audit's findings in VeraCrypt 1.19. This is how security audits should work. OSTIF said VeraCrypt 1.9 is safe because most of the the flaws have been addressed. Some vulnerabilities were not addressed in this version, due to the "high complexity for the proposed fixes," but workarounds for those exist. "As long as you are following the documentation for known issues and using it as advised, I believe [VeraCrypt 1.9] is one of the best FDE [full-disk encryption] systems out there," said Derek Zimmer, OSTIF CEO and president, in an Ask-Me-Anything Q&A on Reddit. Zimmer is also a partner with virtual private network service provider VikingVPN. OSTIF hired Quarkslab senior security researcher Jean-Baptiste Bédrune and senior cryptographer Marion Videau to check the VeraCrypt codebase, focusing on version 1.18, and the DCS EFI Bootloader. The audit focused on new security features that were introduced into VeraCrypt after the April 2015 security audit of TrueCrypt. VeraCrypt is the fork of that now-abandoned encryption tool, and is backwards-compatible. Four problems in the bootloader -- keystrokes not being erased after authentication, sensitive data not correctly erased, memory corruption, and null/bad pointer references -- were found in the audit and fixed in version 1.19.  A low-severity boot password flaw, where the password length could be determined, was also addressed.  While the information leak itself is not critical, as the system needs to be booted and privileged access is required to read BIOS memory, the vulnerability needed to be fixed because an attacker knowing the length of the password would hasten the time needed for brute-force attacks, the audit said. VeraCrypt relied on compression functions to decompress the bootloader when the hard drive is encrypted, to create and check the recovery disks if the system is encrypted and uses UEFI, and during installation. The audit found that all the compression functions had issues. VeraCrypt was using XZip and XUnzip, which had known vulnerabilities and were out-of-date. "We strongly recommend to either rewrite this library and use an up-to-date version of zlib, or preferably, use another component to handle Zip files," the auditors said. VeraCrypt 1.19 replaced the vulnerable libraries with libzip, a modern and more secure zip library. UEFI is one of the most important -- and newest -- features added to VeraCrypt, so the auditors paid extra attention to this part of the code. All code specific to UEFI is in the VeraCrypt-DCS repository, and was "considered much less mature than the rest of the project" by VeraCrypt's lead developer, the researchers wrote in the audit report. "Some parts are incomplete, or not incomplete at all." In the audit summary OSTIF wrote that "VeraCrypt is much safer after this audit, and the fixes applied to the software mean that the world is safer when using this software."   As a result of the audit, VeraCrypt dumped GOST 28147-89 symmetric block cipher, originally added in VeraCrypt 1.17, due to errors in how it was implemented. GOST 28147-89 encryption was a Soviet-developed alternative to DES designed to strengthen the algorithm. All compression libraries were considered outdated or poorly written, the audit found. The implementation "fell short," Zimmer said in the Reddit AMA. In version 1.9, users can decrypt existing volumes that used the cipher but cannot create new instances. Users who used the GOST cipher that was removed as part of the audit should re-encrypt old partitions using the latest version. Users should also re-encrypt on all full-disk encryption systems since a number of issues with the bootloader have been fixed. Anyone who used pre-1.18 versions should re-encrypt partitions because of the bug related to the discovery of hidden partitions. VeraCrypt is a fork of TrueCrypt, which developers abruptly shut down in May 2014, hinting at unspecified security issues. There were concerns that the platform had a backdoor or some other flaw compromising the tool. The audit was necessary to assess the overall security of the platform. OSTIF said TrueCrypt 7.1a should no longer be considered safe because it is no longer under active maintenance and it is affected by the bootloader issues uncovered in the audit. However, the audit report also suggested that the weaknesses in TrueCrypt 7.1a do not affect the security of containers and non-system drives. It is easy to dismiss VeraCrypt as being unsafe because of the issues uncovered, but that ignores the entire value of having an audit. If the audit had uncovered issues and the team had refused to fix the issues, or were unresponsive to requests from the auditors, then that would give cause for concern. In this case, Quarkslab completed the audit in a month, and the maintainers fixed a significant number of the issues and documented in detail how to handle the other issues that hadn't been addressed. Yes, the auditors found some questionable decisions and mistakes that shouldn't have been made in the first place, but there were no problematic backdoors or any vulnerabilities that compromise the integrity of the full-disk encryption tool. The nature of open source development means the source code is available for anyone to examine. But, as has been repeatedly shown over the last few years, very few developers are actively looking for security flaws. This is why, despite the "many eyeballs" approach, Heartbleed and Shellshock and other critical vulnerabilities lingered in OpenSSL for years before being discovered. With an audit, professionals scrutinize every line of the open source software's source code to verify the integrity of the code, uncover security flaws and backdoors, and work with the project to fix as many problems as possible. The audit is typically expensive -- private search engine DuckDuckGo and virtual private network service Viking VPN were the primary donors to OSTIF for this audit -- which is why audits aren't more common. However, as many commercial products and other open source projects rely heavily on a handful of open source projects, audits are increasingly becoming important. With the VeraCrypt audit complete, the OSTIF is looking ahead to audits of OpenVPN 2.4. GnuPG, Off-the-Record, and OpenSSL are also on the roadmap. The Linux Foundation's Core Infrastructure Initiative had stated plans for a public audit of OpenSSL with NCC Group, but the status of that project is currently unclear. "I wish we could just hit every project that everyone likes, and my list would be enormous, but we have finite resources to work with and securing funding is the vast majority of our work right now," Zimmer wrote, noting that OSTIF is focusing on one "promising" project in each area of cryptography.