Patch comes amid active exploitation by ransomware gangs

Networking hardware vendor Zyxel today released an update to fix a critical flaw in many of its network attached storage (NAS) devices that can be used to remotely commandeer them. The patch comes 12 days after KrebsOnSecurity alerted the company that precise instructions for exploiting the vulnerability were being sold for $20,000 in the cybercrime underground.

Based in Taiwan, Zyxel Communications Corp. (a.k.a “ZyXEL”) is a maker of networking devices, including Wi-Fi routers, NAS products and hardware firewalls. The company has roughly 1,500 employees and boasts some 100 million devices deployed worldwide. While in many respects the class of vulnerability addressed in this story is depressingly common among Internet of Things (IoT) devices, the flaw is notable because it has attracted the interest of groups specializing in deploying ransomware at scale.

KrebsOnSecurity first learned about the flaw on Feb. 12 from Alex Holden, founder of Milwaukee-based security firm Hold Security. Holden had obtained a copy of the exploit code, which allows an attacker to remotely compromise more than a dozen types of Zyxel NAS products remotely without any help from users.

Holden said the seller of the exploit code — a ne’er-do-well who goes by the nickname “500mhz” –is known for being reliable and thorough in his sales of 0day exploits (a.k.a. “zero-days,” these are vulnerabilities in hardware or software products that vendors first learn about when exploit code and/or active exploitation shows up online).

For example, this and previous zero-days for sale by 500mhz came with exhaustive documentation detailing virtually everything about the flaw, including any preconditions needed to exploit it, step-by-step configuration instructions, tips on how to remove traces of exploitation, and example search links that could be used to readily locate thousands of vulnerable devices.

500mhz’s profile on one cybercrime forum states that he is constantly buying, selling and trading various 0day vulnerabilities.

“In some cases, it is possible to exchange your 0day with my existing 0day, or sell mine,” his Russian-language profile reads.

PARTIAL PATCH

KrebsOnSecurity first contacted Zyxel on Feb. 12, sharing a copy of the exploit code and description of the vulnerability. When four days elapsed without any response from the vendor to notifications sent via multiple methods, this author shared the same information with vulnerability analysts at the U.S. Department of Homeland Security (DHS) and with the CERT Coordination Center (CERT/CC), a partnership between DHS and Carnegie Mellon University.

Less than 24 hours after contacting DHS and CERT/CC, KrebsOnSecurity heard back from Zyxel, which thanked KrebsOnSecurity for the alert without acknowledging its failure to respond until they were sent the same information by others.

“Thanks for flagging,” Zyxel’s team wrote on Feb. 17. “We’ve just received an alert of the same vulnerabilities from US-CERT over the weekend, and we’re now in the process of investigating. Still, we heartily appreciate you bringing it to our attention.”

Earlier today, Zyxel sent a message saying it had published a security advisory and patch for the zero-day exploit in some of its affected products. The vulnerable devices include NAS542, NAS540, NAS520, NAS326, NSA325 v2, NSA325, NSA320S, NSA320, NSA310S, NSA310, NSA221, NSA220+, NSA220, and NSA210. The flaw is designated as CVE-2020-9054.

However, many of these devices are no longer supported by Zyxel and will not be patched. Zyxel’s advice for those users is simply “do not leave the product directly exposed to the internet.”

“If possible, connect it to a security router or firewall for additional protection,” the advisory reads.

Holden said given the simplicity of the exploit — which allows an attacker to seize remote control over an affected device by injecting just two characters to the username field of the login panel for Zyxel NAS devices — it’s likely other Zyxel products may have related vulnerabilities.

“Considering how stupid this exploit is, I’m guessing this is not the only one of its class in their products,” he said.

CERT’s advisory on the flaw rates it at a “10” — its most severe. The advisory includes additional mitigation instructions, including a proof-of-concept exploit that has the ability to power down affected Zyxel devices.

EMOTET GOES IOT?

Holden said recent activity suggests that attackers known for deploying ransomware have been actively working to test the zero-day for use against targets. Specifically, Holden said the exploit is now being used by a group of bad guys who are seeking to fold the exploit into Emotet, a powerful malware tool typically disseminated via spam that is frequently used to seed a target with malcode which holds the victim’s files for ransom.

Holden said 500mhz was offering the Zyxel exploit for $20,000 on cybercrime forums, although it’s not clear whether the Emotet gang paid anywhere near that amount for access to the code. Still, he said, ransomware gangs could easily earn back their investment by successfully compromising a single target with this simple but highly reliable exploit.

“From the attacker’s standpoint simple is better,” he said. “The commercial value of this exploit was set at $20,000, but that’s not much when you consider a ransomware gang could easily make that money back and then some in a short period of time.”

Emotet’s nascent forays into IoT come amid other disturbing developments for the prolific exploitation platform. Earlier this month, security researchers noted that Emotet now has the capability to spread in a worm-like fashion via Wi-Fi networks.

“To me, a 0day exploit in Zyxel is not as scary as who bought it,” he said. “The Emotet guys have been historically targeting PCs, laptops and servers, but their venture now into IoT devices is very disturbing.”

DISCLOSURE DEBATE

This experience was a good reminder that vulnerability reporting and remediation often can be a frustrating process. Twelve days turnaround is fairly quick as these things go, although probably not quick enough for customers using products affected by zero-day vulnerabilities.

It can be tempting when one is not getting any response from a vendor to simply publish an alert detailing one’s findings, and the pressure to do so certainly increases when there is a zero-day flaw involved. KrebsOnSecurity ultimately opted not to do that for three reasons.

Firstly, at the time there was no evidence that the flaws were being actively exploited, and because the vendor had assured DHS and CERT-CC that it would soon have a patch available.

Perhaps most importantly, public disclosure of an unpatched flaw could well have made a bad situation worse, without offering affected users much in the way of information about how to protect their systems.

Many hardware and software vendors include a link from their home pages to /security.txt, which is a proposed standard for allowing security researchers to quickly identify the points of contact at vendors when seeking to report security vulnerabilities. But even vendors who haven’t yet adopted this standard (Zyxel has not) usually will respond to reports at security@[vendordomainhere]; indeed, Zyxel encourages researchers to forward any such reports to security@zyxel.com.tw.

On the subject of full disclosure, I should note that while this author is listed by Hold Security’s site as an advisor, KrebsOnSecurity has never sought nor received remuneration of any kind in connection with this role.

Networking software giant Citrix Systems says malicious hackers were inside its networks for five months between 2018 and 2019, making off with personal and financial data on company employees, contractors, interns, job candidates and their dependents. The disclosure comes almost a year after Citrix acknowledged that digital intruders had broken in by probing its employee accounts for weak passwords.

Citrix provides software used by hundreds of thousands of clients worldwide, including most of the Fortune 100 companies. It is perhaps best known for selling virtual private networking (VPN) software that lets users remotely access networks and computers over an encrypted connection.

In March 2019, the Federal Bureau of Investigation (FBI) alerted Citrix they had reason to believe cybercriminals had gained access to the company’s internal network. The FBI told Citrix the hackers likely got in using a technique called “password spraying,” a relatively crude but remarkably effective attack that attempts to access a large number of employee accounts (usernames/email addresses) using just a handful of common passwords.

In a statement released at the time, Citrix said it appeared hackers “may have accessed and downloaded business documents,” and that it was still working to identify what precisely was accessed or stolen.

But in a letter sent to affected individuals dated Feb. 10, 2020, Citrix disclosed additional details about the incident. According to the letter, the attackers “had intermittent access” to Citrix’s internal network between Oct. 13, 2018 and Mar. 8, 2019, and that there was no evidence that the cybercrooks still remain in the company’s systems.

Citrix said the information taken by the intruders may have included Social Security Numbers or other tax identification numbers, driver’s license numbers, passport numbers, financial account numbers, payment card numbers, and/or limited health claims information, such as health insurance participant identification number and/or claims information relating to date of service and provider name.

It is unclear how many people received this letter, but the communication suggests Citrix is contacting a broad range of individuals who work or worked for the company at some point, as well as those who applied for jobs or internships there and people who may have received health or other benefits from the company by virtue of having a family member employed by the company.

Citrix’s letter was prompted by laws in virtually all U.S. states that require companies to notify affected consumers of any incident that jeopardizes their personal and financial data. While the notification does not specify whether the attackers stole proprietary data about the company’s software and internal operations, the intruders certainly had ample opportunity to access at least some of that information as well.

Shortly after Citrix initially disclosed the intrusion in March 2019, a little-known security company Resecurity claimed it had evidence Iranian hackers were responsible, had been in Citrix’s network for years, and had offloaded terabytes of data. Resecurity also presented evidence that it notified Citrix of the breach as early as Dec. 28, 2018, a claim Citrix initially denied but later acknowledged.

Iranian hackers recently have been blamed for hacking VPN servers around the world in a bid to plant backdoors in large corporate networks. A report released this week (PDF) by security firm ClearSky details how Iran’s government-backed hacking units have been busy exploiting security holes in popular VPN products from Citrix and a number of other software firms.

ClearSky says the attackers have focused on attacking VPN tools because they provide a long-lasting foothold at the targeted organizations, and frequently open the door to breaching additional companies through supply-chain attacks. The company says such tactics have allowed the Iranian hackers to gain persistent access to the networks of companies across a broad range of sectors, including IT, security, telecommunications, oil and gas, aviation, and government.

Among the VPN flaws available to attackers is a recently-patched vulnerability (CVE-2019-19781) in Citrix VPN servers dubbed “Shitrix” by some in the security community. The derisive nickname may have been chosen because while Citrix initially warned customers about the vulnerability in mid-December 2019, it didn’t start releasing patches to plug the holes until late January 2020 — roughly two weeks after attackers started using publicly released exploit code to break into vulnerable organizations.

How would your organization hold up to a password spraying attack? As the Citrix hack shows, if you don’t know you should probably check, and then act on the results accordingly. It’s a fair bet the bad guys are going to find out even if you don’t.

Crooks are constantly dreaming up new ways to use and conceal stolen credit card data. According to the U.S. Secret Service, the latest scheme involves stolen card information embedded in barcodes affixed to phony money network rewards cards. The scammers then pay for merchandise by instructing a cashier to scan the barcode and enter the expiration date and card security code.

Earlier this month, the Secret Service documented a recent fraud incident in Texas involving a counterfeit club membership card containing a barcode, and a card expiration date and CVV printed below the barcode.

“Located underneath the barcode are instructions to the cashier on the steps necessary to complete the transaction,” reads an alert the Secret Service sent to law enforcement agencies. “They instruct the cashier to select card payment, scan the barcode, then enter the expiration date and CVV. In this instance, the barcode was encoded with a VISA credit card number.”

The instructions on the phony rewards card are designed to make the cashier think it’s a payment alternative designed for use exclusively at Sam’s Club and WalMart stores. When the transaction goes through, it’s recorded as card-not-present purchase.

“This appears to be an evolution of the traditional card-not-present fraud, and early indications are linking this type of activity to criminal organizations of Asian descent,” the Secret Service memo observed.

“As a result of this emerging trend, instead of finding a large number of re-encoded credit cards during a search, a subject may only possess stickers or cards with barcodes that contain stolen card data,” the alert continues. “Additionally, the barcodes could be stored on the subject’s cell phone. If barcodes are discovered in the field, it could be beneficial to utilize a barcode scanning app to check the barcode for credit card data.”

A new email-based extortion scheme apparently is making the rounds, targeting Web site owners serving banner ads through Google’s AdSense program. In this scam, the fraudsters demand bitcoin in exchange for a promise not to flood the publisher’s ads with so much bot and junk traffic that Google’s automated anti-fraud systems suspend the user’s AdSense account for suspicious traffic.

Earlier this month, KrebsOnSecurity heard from a reader who maintains several sites that receive a fair amount of traffic. The message this reader shared began by quoting from an automated email Google’s systems might send if they detect your site is seeking to benefit from automated clicks. The message continues:

“Very soon the warning notice from above will appear at the dashboard of your AdSense account undoubtedly! This will happen due to the fact that we’re about to flood your site with huge amount of direct bot generated web traffic with 100% bounce ratio and thousands of IP’s in rotation — a nightmare for every AdSense publisher. More also we’ll adjust our sophisticated bots to open, in endless cycle with different time duration, every AdSense banner which runs on your site.”

The message goes on to warn that while the targeted site’s ad revenue will be briefly increased, “AdSense traffic assessment algorithms will detect very fast such a web traffic pattern as fraudulent.”

“Next an ad serving limit will be placed on your publisher account and all the revenue will be refunded to advertisers. This means that the main source of profit for your site will be temporarily suspended. It will take some time, usually a month, for the AdSense to lift your ad ban, but if this happens we will have all the resources needed to flood your site again with bad quality web traffic which will lead to second AdSense ban that could be permanent!”

The message demands $5,000 worth of bitcoin to forestall the attack. In this scam, the extortionists are likely betting that some publishers may see paying up as a cheaper alternative to having their main source of advertising revenue evaporate.

The reader who shared this email said while he considered the message likely to be a baseless threat, a review of his recent AdSense traffic statistics showed that detections in his “AdSense invalid traffic report” from the past month had increased substantially.

The reader, who asked not to be identified in this story, also pointed to articles about a recent AdSense crackdown in which Google announced it was enhancing its defenses by improving the systems that identify potentially invalid traffic or high risk activities before ads are served.

Google defines invalid traffic as “clicks or impressions generated by publishers clicking their own live ads,” as well as “automated clicking tools or traffic sources.”

“Pretty concerning, thought it seems this group is only saying they’re planning their attack,” the reader wrote.

Google declined to discuss this reader’s account, saying its contracts prevent the company from commenting publicly on a specific partner’s status or enforcement actions. But in a statement shared with KrebsOnSecurity, the company said the message appears to be a classic threat of sabotage, wherein an actor attempts to trigger an enforcement action against a publisher by sending invalid traffic to their inventory.

“We hear a lot about the potential for sabotage, it’s extremely rare in practice, and we have built some safeguards in place to prevent sabotage from succeeding,” the statement explained. “For example, we have detection mechanisms in place to proactively detect potential sabotage and take it into account in our enforcement systems.”

Google said it has extensive tools and processes to protect against invalid traffic across its products, and that most invalid traffic is filtered from its systems before advertisers and publishers are ever impacted.

“We have a help center on our website with tips for AdSense publishers on sabotage,” the statement continues. “There’s also a form we provide for publishers to contact us if they believe they are the victims of sabotage. We encourage publishers to disengage from any communication or further action with parties that signal that they will drive invalid traffic to their web properties. If there are concerns about invalid traffic, they should communicate that to us, and our Ad Traffic Quality team will monitor and evaluate their accounts as needed.”

In May 2013, the U.S. Justice Department seized Liberty Reserve, alleging the virtual currency service acted as a $6 billion financial hub for the cybercrime world. Prompted by assurances that the government would one day afford Liberty Reserve users a chance to reclaim any funds seized as part of the takedown, KrebsOnSecurity filed a claim shortly thereafter to see if and when this process might take place. This week, an investigator with the U.S. Internal Revenue service finally got in touch to discuss my claim.

Federal officials charged that Liberty Reserve facilitated a “broad range of criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.” The government says from 2006 until the service’s takedown, Liberty Reserve processed an estimated 55 million financial transactions worth more than $6 billion, with more than 600,000 accounts associated with users in the United States alone.

While it’s clear that the digital currency system for years was the go-to money-moving vehicle for many engaged in dodgy online activities, it also was favored by users primarily because it offered a relatively anonymous way to send irrevocable transfers globally with low fees.

Indeed, the two stories I wrote about the closure of Liberty Reserve in 2013 remain among the most-read on this site, and have generated an enormous volume of emails from readers who saw many thousands of dollars held in legal limbo — much of it related to investments in online gaming platforms, payments to and from adult entertainment services, and various investment schemes.

The IRS official who contacted me was not authorized to be quoted in the media (and indeed did not initially realize he was speaking to a member of the press when he called). But he told me the government had recently obtained legal access to some of the funds held in overseas bank accounts that were used by Liberty Reserve, and that IRS investigators were now starting to contact people and vet any claims made in the wake of the takedown.

“We’re just getting to the point where we have received funds,” the investigator said. “We’ve started to contact people who originally contacted us, to vet their claims, make sure they weren’t involved in any illegal activity, and that the claim amounts match the records that we have.”

The official said he didn’t know how much money in total the government was seeking to return to former Liberty Reserve users. Requests for this information from the Justice Department office that prosecuted the case — the U.S. Attorney for the Southern District of New York — went unanswered.

The founder of Liberty Reserve, 45-year-old Arthur Budovsky, pleaded guilty in 2016 to conspiring to commit money laundering. He was sentenced to 20 years in prison, ordered to pay a $500,000 fine and forfeit $122 million in company funds.

If you filed a monetary claim in response to the Liberty Reserve seizure years back, you may have already been contacted by federal investigators, or you may be soon. But please know that fraudsters will likely seize on public awareness about the possible repatriation of funds to fleece the unwary: KrebsOnSecurity has received more than a few emails from readers over the years who fell for various phishing scams that promised to return funds lost at Liberty Reserve in exchange for a bogus “processing fee.”