Tag: Hackers

Ransom Demands: To Pay or Not to Pay?

As the threat of ransomware attacks against companies has skyrocketed, so has the burden on companies forced to decide whether to pay cybercriminals a ransom demand. Corporate management increasingly is faced with balancing myriad legal and business factors in making real-time, high-stakes “bet the company” decisions with little or no precedent to follow. In a recent advisory, the U.S. Department of the Treasury (Treasury) has once again discouraged companies from making ransom payments or risk potential sanctions.

OFAC Ransom Advisory

On September 21, 2021, the Treasury’s Office of Foreign Assets Control (OFAC) issued an Advisory that updates and supersedes OFAC’s Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments, issued on October 1, 2020. This updated OFAC Advisory follows on the heels of the Biden Administration’s heightened interest in combating the growing risk and reality of cyber threats that may adversely impact national security and the economy.

According to Federal Bureau of Investigation (FBI) statistics from 2019 to 2020 on ransomware attacks, there was a 21 percent increase in reported ransomware attacks and a 225 percent increase in associated losses. All organizations across all industry sectors in the private and public arenas are potential targets of such attacks. As noted by OFAC, cybercriminals often target particularly vulnerable entities, such as schools and hospitals, among others.

While some cybercriminals are linked to foreign state actors primarily motivated by political interests, many threat actors are simply in it “for the money.” Every day cybercriminals launch ransomware attacks to wreak havoc on vulnerable organizations, disrupting their business operations by encrypting and potentially stealing their data. These cybercriminals often demand ransom payments in the millions of dollars in exchange for a “decryptor” key to unlock encrypted files and/or a “promise” not to use or publish stolen data on the Dark Web.

The recent OFAC Advisory states in no uncertain terms that the “U.S. government strongly discourages all private companies and citizens from paying ransom or extortion demands.” OFAC notes that such ransomware payments could be “used to fund activities adverse to the national security and foreign policy objectives of the United States.” The Advisory further states that ransom payments may perpetuate future cyber-attacks by incentivizing cybercriminals. In addition, OFAC cautions that in exchange for payments to cybercriminals “there is no guarantee that companies will regain access to their data or be free from further attacks.”

The OFAC Advisory also underscores the potential risk of violating sanctions associated with ransom payments by organizations. As a reminder, various U.S. federal laws, including the International Emergency Economic Powers Act and the Trading with the Enemy Act, prohibit U.S. persons or entities from engaging in financial or other transactions with certain blacklisted individuals, organizations or countries – including those listed on OFAC’s Specially Designated Nationals and Blacked Persons List or countries subject to embargoes (such as Cuba, the Crimea region of the Ukraine, North Korea and Syria).

Penalties & Mitigating Factors

If a ransom payment is deemed to have been made to a cybercriminal with a nexus to a blacklisted organization or country, OFAC may impose civil monetary penalties for violations of sanctions based on strict liability, even if a person or organization did not know it was engaging in a prohibited transaction.

However, OFAC will consider various mitigating factors in deciding whether to impose penalties against organizations for sanctioned transactions, including if the organizations adopted enhanced cybersecurity practices to reduce the risk of cyber-attacks, or promptly reported ransomware attacks to law enforcement and regulatory authorities (including the FBI, U.S. Secret Service and/or Treasury’s Office of Cybersecurity and Critical Infrastructure Protection).

“OFAC also will consider a company’s full and ongoing cooperation with law enforcement both during and after a ransomware attack” as a “significant” mitigating factor. In encouraging organizations to self-report ransomware attacks to federal authorities, OFAC notes that information shared with law enforcement may aid in tracking cybercriminals and disrupting or preventing future attacks.

Conclusion

In short, payment of a ransom is not illegal per se, so long as the transaction does not involve a sanctioned party on OFAC’s blacklist. Moreover, the recent ransomware Advisory “is explanatory only and does not have the force of law.” Nonetheless, organizations should consider carefully OFAC’s advice and guidance in deciding whether to pay a ransom demand.

In addition to the OFAC Advisory, management should consider the following:

  • Ability to restore systems from viable (unencrypted) backups

  • Marginal time savings in restoring systems with a decryptor versus backups

  • Preservation of infected systems in order to conduct a forensics investigation

  • Ability to determine whether data was accessed or exfiltrated (stolen)

  • Reputational harm if data is published by the threat actor

  • Likelihood that the organization will be legally required to notify individuals of the attack regardless of whether their data is published on the Dark Web.

Should an organization decide it has no choice other than to make a ransom payment, it should facilitate the transaction through a reputable company that first performs and documents an OFAC sanctions check.

© 2021 Wilson Elser
For more articles about ransomware attacks, visit the NLR Cybersecurity, Media & FCC section.

British Member of “The Dark Overlord” Hacking Organization Extradited to Face Conspiracy and Identify Theft Charges in the United States

Beginning in 2016, the computer hacking organization known as “The Dark Overlord,” began to target victims in the St. Louis, Missouri area, including various health care providers, several accounting firms, and a medical records company.  By remotely accessing these victims’ computer networks without authorization, The Dark Overlord was able to obtain sensitive records and information, which it then threatened to release unless the companies paid a ransom in bitcoin.

Following a lengthy investigation conducted by the Federal Bureau of Investigation and British authorities, United Kingdom national Nathan Wyatt was extradited to the United States and appeared before a federal district court in eastern Missouri on Wednesday, December 18, 2019, to face charges of aggravated identity theft, threatening damage to a protected computer, and conspiracy.  While Wyatt is the first member of The Dark Overlord to face prosecution, government officials have expressed a hope that this will signal to other cyber hackers targeting American companies that they will not be able to use territorial borders to evade justice and prosecution by the United States.

Copyright © 2019 Robinson & Cole LLP. All rights reserved.

Head Hacking: New Devices Gather Brainspray

For more than a decade I have been warning about the vulnerability of brainspray – the brain signals that can be captured from outside your head. In 2008, this article by Jeffery Goldberg demonstrated that an fMRI machine could easily interpret how a person felt about stimuli provided – which could be a boon to totalitarian governments testing for people’s true feelings about the government or its Dear Leader. Of course in 2008 the fMRI costs two million dollars and you must lie still inside it for a useful reading to emerge.

While fMRI mind reading and lie detection is not yet ready for the courtroom, its interpretations are improving all the time and mobile units are under consideration. And its wearable cousins, like iWatches and computerized head gear are reading changes from within your body, such as electrocardiogram, heart rate, blood pressure, respiration rate, blood oxygen saturation, blood glucose, skin perspiration, capnography, body temperature, motion evaluation, cardiac implantable devices and ambient parameters. Certain head gear is calibrated just for brain waves.

Some of this is gaming equipment and some helps you meditate.  Biofeedback headsets measure your brain waves, using EEG. They’re small bands that sit easily on your head and measure activity through sensors. Several companies like MindWave, NeuroSky, Thync, and Versus all make such equipment available to the general public.

Of course, if you really want to frighten yourself about how far this technology has advances, check in on DARPA and the rest of the US Military. DARPA has been testing brainwave filtering binoculars , human brainwave driven targeting for killer robots,  and soldier brain-machine interfaces for military vehicles. And these are just the things they are currently willing to dicuss in public.

I wrote six years ago about how big companies like Honda were exploring brainspray capture, and have spoken about how Google, Facebook and other Silicon Valley giants have sunk billions of dollars into creating brain-machine interfaces and reading brainspray for practical purposes.

I will write more on this later, but be aware that hacking of this equipment is always possible, which could give the wrong people access to your brain waves and pick up if you are thinking of your bank account PIN or other sensitive matter. Your thoughts of any sort should be protected from view.  Thought-crime has always been on the other side of the line.

Now that it is possible to read your brainspray with greater certainty, we should be considering how to regulate this activity.  I don’t mind giving the search engine my information in exchange of efficient immediate searches.  But I don’t want to open my head to companies or government.

Copyright © 2019 Womble Bond Dickinson (US) LLP All Rights Reserved.

For more in device hacking, see the Communications, Media & Internet law page on the National Law Review.

Fake Apps Find Their Way to Google Play!

Over the last two months a string of fake banking apps have hit the Google Play store, leaving many customers wondering whether they have been affected by the scam. A report by security firm ESET found users of three Indian banks were targeted by the apps which all claimed to increase credit card limits, only to convince customers to divulge their personal data, including credit card and internet banking details. The impact of this scam was heightened as the data stolen from unsuspecting customers was then leaked online by way of an exposed server.

The report claims these apps all utilise the same process:

  1. Once the app is downloaded and launched a form appears which asks the user to fill in credit card details (including credit card number, expiry date, CVV and login credentials)
  2. Once the form is completed and submitted a pop up customer service box is displayed
  3. The pop up box thanks users for their interest in the bank and indicates a ‘Customer Service Executive’ will be in contact shortly
  4. In the meantime, no representative makes contact with the customer and the data entered into the form is sent back to the attacker’s server – IN PLAIN TEXT.

The ESET report alarming revealed that the listing of stolen data on the attacker’s server is accessible to anyone with the link to the data, this means sensitive stolen personal data was available to absolutely anyone who happens to comes across it.

Whilst, the reality is any app on your personal smartphone may place your phone and personal data at risk, (as discussed here ‘Research Reports say risks to smartphone security aren’t phoney‘)

Customers can mitigate risk by:

  • only using their financial institutions official banking apps, these are downloadable from the relevant institution’s official website;
  • paying attention to the ratings, customer reviews when downloading from Google Play;
  • implementing security controls on your smartphone device from a reputable mobile security provider; and
  • contracting their financial institution directly to seek further guidance on the particular banking apps in use.

It cannot be overlooked, whilst Google Play moved quickly to remove the apps we query how it was so easy for cyber criminals to launch fake apps on Google Play in the first place.

Copyright 2018 K & L Gates.

This post was written by Cameron Abbott  and Jessica McIntosh of K & L Gates.

Read more stories like this on the National Law Review’s Cybersecurity legal news page.

Espionage and Export Controls: iPhone Hack Highlights New World of Warfare

iPhone HackLast week, researchers at Citizen Lab uncovered sophisticated new spyware that allowed hackers to take complete control of anyone’s iPhone, turning the phone into a pocket-spy to intercept communications, track movements and harvest personal data. The malicious software, codenamed “Pegasus,” is believed to have been developed by the NSO Group, an Israeli company (whose majority shareholder is a San Francisco based private equity firm) that describes itself as a “leader in cyber warfare” and sells its software — with a price tag of $1 million – primarily to foreign governments. The software apparently took advantage of three previously unknown security flaws in Apple’s iOS software, and was described by experts as “the most sophisticated” ever seen on the market. Apple quickly released a patch of its software, iOS 9.3.5, and urged users to download it immediately.

Citizen Lab learned about Pegasus from Ahmed Mansoor, a UAE human rights activist, who received text messages baiting him to click on a link to discover “new secrets about the torture” of Emirati prisoners. Mr. Mansoor had been prey to hackers before, so he contacted Citizen Lab. When researchers tested the link, they discovered software had been remotely implanted onto the phone, and brought in Lookout, a mobile security firm, to reverse-engineer the spyware. Citizen Lab later identified the same software as having been used to track a Mexican journalist whose writings have criticized Mexico’s President. Citizen Lab and Lookout also determined that Pegasus could have been used across Turkey, Israel, Thailand, Qatar, Kenya, Uzbekistan, Mozambique, Morocco, Yemen, Hungary, Saudi Arabia, Nigeria, and Bahrain, based on domains registered by NSO.

NSO Group, the architect of Pegasus, claims to  provide “authorized governments with technology that helps them combat terror and crime,” insisting that its products are only used in lawful ways., NSO spokesperson Zamir Dahbash told reporters that the company “fully complies with strict export control laws and regulations.” The Citizen Lab researcher who disassembled the malicious program, however, compared it to “defusing a bomb.” All of which raises the question – what laws or regulations govern the export of cyber-weapons by an Israeli firm (likely controlled by U.S. investors) to foreign governments around the world?

Cyber weapons are becoming increasingly interchangeable with traditional weapons. Governments (or terrorists) no longer need bombs or missiles to inflict large-scale destruction, such as taking down a power grid, since such attacks can now be conducted from anywhere there is a computer. Do export controls – which have long been used as foreign policy and national security tools, and which would regulate the transfer of traditional weapons – play any real role in regulating the transfer of weapons of cyber-surveillance or destruction? In fact, the legal framework underlying current export controls has not caught up (and maybe never will) to the capabilities of technological tools used in cyberwarfare. Proposals to regulate malware have been met with resistance from the technology industry because malware technology is often dual-use and the practical implications of requiring licenses would impede technological innovation and business activities in drastic ways.

The Wassenaar Arrangement

The Wassenaar Arrangement (WA) was established in 1996 as a multilateral nonproliferation regime to promote regional security and stability through greater transparency and responsibility in the transfer of arms and sensitive technologies. The United States is a member. Israel is not, but has aligned its export controls with Wassennaar lists.

In December 2013, the list of export controlled technologies under WA was amended to include commercial surveillance software, largely to curb human rights abuses by repressive governments’ use of spyware on citizens. Earlier this year, the Department of Commerce issued recommendations that the definition of “intrusion software” in the WA be modified to encompass the concept of “authorization” so that malware such as Pegasus, in which the user does not truly understand the nature of the consequences, would be controlled. Those proposals have not been implemented.

U.S. Export Controls of Malware

In 2015, following data breaches at the Officer of Personnel Management and several private companies, the Department of Commerce published proposed rules to harmonize concepts embedded in the WA into the U.S. regulatory framework for export controls. One critical proposal was a definition of “intrusion software” to require a license for the export and use of malware tools. But the definition covered much more than malware. Cybersecurity experts were alarmed by the rule’s over-inclusive and vague language. The rules would have impeded critical business activities, stifled international research and cross-border exchanges of technology, and hindered response to cyber threats.

NSO Group has been described by researchers as “incredibly committed to stealth, and  reportedly has close partnerships with other Israeli surveillance firms that seek to sell spyware, suggesting an inevitable increase in cyber mayhem. As malware becomes more sophisticated, widespread, and threatening, the need for strictly tailored export controls is not going to go away.

Regulating software is challenging at least in part, because there is no workable legal definition of what constitutes a cyber weapon. Because malware is largely dual-use, the only way to determine whether particular software constitutes a cyber weapon is retroactively. If software has been used as a weapon, it is considered a cyber weapon. But that definition arrives far too late to control the dissemination of the code. Moreover, controlling  components of that software would likely be over-inclusive, since the same code that can exploit flaws to break in to devices can also have benign uses, such as detecting vulnerabilities to help manufacturers like Apple learn what needs patching. Another challenge is that requiring  export licenses can take months, which, in the fast-moving tech world is as good as denial.

The revelation of the Pegasus iPhone spyware highlights questions that have perplexed national security and export control experts in recent years. As the use and sophistication of malware continue their explosive growth, not only must individuals and governments face the  chilling realities of cyber warfare, but regulators must quickly understand the technological issues, address the risks, and work with the cyber security and technological communities to find a path forward.

ARTICLE BY Fatema K. Merchant & Laura E. Jehl  of Sheppard, Mullin, Richter & Hampton LLP
Copyright © 2016, Sheppard Mullin Richter & Hampton LLP.

Twitter Terrorism: Criminals Choose the Hack Attack

In what appears to be yet another brazen demonstration of capability following an earlier hijack of government social media sites, a group calling itself the Syrian Electronic Army (SEA) recently hacked into the U.S. Army’s main news and public information website, positing its own message for website visitors: “Your commanders admit they are training the people they have sent you to die fighting.” In response, the Army was forced to shut down the site to implement additional security measures to protect its systems.

Earlier this year, two of the U.S. military’s Central Command social media websites on YouTube and Twitter were similarly attacked and compromised. There, organization profile images were replaced by those of ISIS supporters on the official Twitter page, and two ISIS propaganda videos were uploaded to the Central Command YouTube account. Over the past several years, SEA has initiated similar attacks on the Twitter accounts of the BBC, The New York Times, 60 Minutes and the Associated Press.

Business Concerns

While the U.S. government reported that none of the internal systems were compromised and that there was no loss of classified information, the attacks have certified the anxiety of many business leaders over the potential vulnerability of their own companies, and highlight the concerns regarding the lack of knowledge or ability to prevent such attacks. Recent surveys have confirmed that risks associated with social media, whether through external portal access or internal sabotage, are among the top concerns facing businesses in 2015.

Without question, social media has become a crucial advertising vehicle for thousands of businesses around the world. The number of Facebook, Twitter, LinkedIn and other social media users continues to grow at an exponential rate, allowing businesses access to many new customers and clients every day. The ability to maintain control over these new electronic profiles, however, has become increasingly difficult as the perpetrators become more skilled and the targets more prized. In one particularly publicized account in 2013, social media hackers changed the Twitter account name of a premiere fast-food company to that of its chief competitor and posted multiple offensive tweets. Thereafter, damage control was all that could be done.

Businesses in 2015 have become enthralled by virtually unlimited access to customers and business partners via online platforms. Unfortunately, many have focused on the potential profits arising from such undertakings without sufficient consideration for the problems that too frequently arise from the use of such platforms. Social media has become the soft underbelly of many growing businesses eager for success but unaware of its vulnerabilities. In addition to direct attacks, courthouses nationwide have been flooded by lawsuits tied to the use and regulation of social media sites. The governance of employee use of social media, ownership of content and retention of information gathered through social media are generating more litigation every day. While increased exposure may be the incentive, preventative medicine will likely prove integral to long-term success.

Such “preventative medicine” includes not only the appropriate policies and procedures on access to and use of social media, but also an understanding of the vulnerabilities created by using these online platforms.  Most importantly, organizations must train their employees on these issues. Defending itself from perils arising out of social media starts at the first line of defense – the user.

ARTICLE BY Scott Sweeney & Ian A. Stewart of Wilson Elser Moskowitz Edelman & Dicker LLP

© 2015 Wilson Elser