Pre-Installed Phone Malware

Some new Samsung, Motorola, Asus, and LG phones are reported to have come with malware installed. Samsung reports that the malware, which appears to be an altered version of a Netflix app, was not installed at the factory. It is thought most likely that the malware was installed at some point in the supply chain.

The malware in question was harvesting passwords and financial information, and relaying that information to a server in Russia.

Energy Companies Turned Down for Cyber Insurance as Poor Risks

Energy and other physical infrastructure companies have a difficult job to do. The SCADA (Supervisory Control and Data Acquisition) components are difficult to maintain or secure. They are isolated, frequently have inadequate support, are frequently highly customized for a particular installation, and may be so old that no reasonable support or patches are available for them.

Unfortunately, some energy companies appear to view insurance as a replacement for (rather than a supplement to) robust information security. Insurance companies who offer cyber security policies are increasingly turning down these potentially lucrative contracts due to the risk of a loss.

The "Olympic Games" hack involving Stuxnet showed the danger hackers pose to critical infrastructure. Even though Stuxnet was originally targeted at Iran's secretive nuclear program, the virus escaped into the wild and has been found in unrelated and surprising places.

Hopefully the refusal of cyber insurance will be a wake up call to energy and other infrastructure companies. Updates need to be applied, security needs to be designed in, and critical components may need to be separated from the network by an air gap.

Mt Gox: Criminal or Careless?

In recent days, there have been a lot of contradictory reports about a large theft at the Mt Gox Bitcoin exchange. Their bankruptcy filing reported that USD $425 million worth of Bitcoins appear to have disappeared. Mt Gox has done nothing to clear up the confusion, which has led to ever more speculation about exactly what happened.

Much of the information that is being reported has been sourced to a document that has been published on the Internet. At this point, Mt Gox has not validated the document, but many reports believe it to be genuine.

Reports have centered around a known weakness in the Bitcoin infrastructure, known as "malleability." In attacks based on malleability, hackers slightly vary the information in packets about legitimate transactions and flood the exchange with fraudulent information. The exchanges then need to validate every transaction to see which transactions are valid. Most exchanges have built in safeguards to deal with attacks based on malleability.

Serious allegations are being raised that fraud within Mt Gox may itself have been responsible for at least some of the loss. In 2012, Mt Gox reported about USD $380k in revenue. But in 2013, the company had to pay out a USD $5 million fine. Financial reporters are not clear on how Mt Gox was able to keep its doors open after this fine, but there are several reports of slow payments after the fine was paid. Financial reporters have noted that some consider this to be an early warning of a company doing business on a fraudulent basis.

At the very least, it appears clear that Mt Gox continued to do business even after discovering that it was vulnerable to a hacking attack.

WiFi Virus Created

Security researchers have designed a virus that spreads silently through WiFi networks. The "Chameleon" virus replaces access point firmware and masquerades the settings and administrative credentials, which makes it very difficult to detect this virus.

Fortunately, the virus can be blocked by following good WiFi security practices. Unfortunately, many WiFi networks are not set up in a secure way.

Fortunately, the steps to secure a home WiFi network are not particularly difficult:

• Use AES encryption. WEP encryption and TKIP encryption have known weaknesses that are easily exploited. (Depending on your router, you would choose WPA2 or WPA encryption and select AES as the standard.)
• Use a password that is hard to break. It should have more than 20 characters, and should include a mix of upper and lower case letters, numbers, special characters, and even spaces. Entire sentences may be appropriate, if they are not publicly known.
• Change default administrative password and IP address. A surprising number of home installations still use the defaults.
• Turn off remote administration features. Administration should be required to be done over a wired connection.
• Verify that your firmware is updated. There are a number of bugs that have been reported against WiFi router firmware.
• Log out of your administrative sessions when you are done.

Beyond securing your own routers, you need to keep in mind that public routers may also have been infected. There are some steps you can take to protect yourself when connecting to public WiFi routers. Be aware that public networks are by definition insecure, whether WiFi or wired. There is little or nothing to stop a miscreant from trying to snoop your connection.

• Enable built-in firewall features on your computer, especially software firewalls. Deny all incoming connections.
• Make sure file sharing is turned off.
• Be aware that passwords may be sniffed by keyboard loggers, pulled from your computer's registry, or simply observed over your shoulder. By using a tool like LastPass or Password Safe, you can avoid having to type passwords while storing them in a secure, encrypted location.
• Use a VPN if possible.
• Use https (HTTP over SSL) to connect to vendor sites wherever possible.

Windows Crash Reports and Intrusion Detection

Websense recently published a whitepaper discussing how to use Windows crash reports to identify intrusions. They took their analysis one extra step past detecting known attack signatures to look for new, unknown attacks.

While researching the whitepaper, Websense used their methodology to identify a new targeted attack against a mobile network provider and a government agency, and a new Zeus-based POS (Point of Sale terminal) attack.

CryptoLocker, Ransomware, and the Importance of Good Backups

CryptoLocker attacks have become more frequent and public. CryptoLocker is a type of ransomware that stealthily encrypts all available files on the infected computer or attached shares or devices. Then the computer user is warned that the files can only be decrypted with a key that must be bought and installed within 100 hours.

Of course this is extortion. But Symantec estimates that 3% of victims pay up, which is enough to net the extortionists millions of dollars per month.

Recently, a law firm's entire store of legal files was encrypted and unable to be decrypted. Consider the potential implications of being legally responsible for these documents and being responsible for their destruction through negligence.

Removing the infection from the computer is relatively straightforward. There are free tools, such as this tool from Sophos. Alternatively, you can roll your system back using Windows System Restore, if you had enabled that feature before you were infected. Other, more intrusive methods may be needed, if these do not work. These tools can remove the infection, but decrypting the encrypted user files is not likely to be possible.

If your files have been encrypted, you are going to need to recover from backup. Once your PC has been disinfected, you can attempt to recover files from Shadow Volume Copies (which is part of Windows' System Restore). But you are most likely to be successful if you have been backing up to a system that did not allow the infected PC to overwrite your backups.

Outsourcing, Lax Authentication, and the Target Hack

It turns out that the hackers who broke into Target's POS terminals used credentials from Target's HVAC vendor.

Fazio Mechanical, Target's HVAC vendor, had access to Target's network in order to monitor the temperatures in the stores and the health of the HVAC equipment. It is less clear why access was allowed with weak authentication, and why there was no network segmentation between the HVAC units and the POS terminals.

The only really sophisticated part of the attack was the memory-scraping software actually used in the POS terminals. The rest appears to have been a combination of standard attack methods.

One of the key user accounts used to consolidate and move data around Target's network was the "best1_user" account, which is an account name usually associated with the Performance Assurance for Microsoft Servers agent of BMC Software's Patrol product.

It appears that a SQL injection attack was a key part of compromising servers to place the malware and recover the stolen data.

Target has stated that it intends to invest heavily in chip card technology. This would help with "card present" attacks (ie attacks based on cloning a physical card), but would not do much for "card absent" attacks (where a purchase is made from a remote location).