Citing a computer virus outbreak, a hospital system in the United Kingdom has canceled all planned operations and diverted major trauma cases to neighboring facilities. The incident came as U.K. leaders detailed a national cyber security strategy that promises billions in cybersecurity spending, new special police units to pursue organized online gangs, and the possibility of retaliation for major attacks.

In a “major incident” alert posted to its Web site, the National Health Service’s Lincolnshire and Goole trust said it made the decision to cancel surgeries and divert trauma patients after a virus infected its electronic systems on Sunday, October 30.

“We have taken the decision, following expert advise, to shut down the majority of our systems so we can isolate and destroy it,” the NHS said, of the unspecified malware infection. “All planned operations, outpatient appointments and diagnostic procedures have been cancelled for Wednesday, Nov. 2 with a small number of exceptions.”

The advisory continued:

“Inpatients will continue to be cared for and discharged as soon as they are medically fit. Major trauma cases will continue to be diverted to neighboring hospitals as will high risk women in labour.”

Although the NHS didn’t say what kind of virus infected its systems, it is likely an infestation of ransomware — a malware scourge whose purveyors have taken to targeting hospitals and healthcare facilities.

Ransomware scours an infected computer for documents, audio files, pictures and other things likely to be of value to the system’s owner, and then encrypts that data with very powerful encryption software. Most ransomware variants also scour the local network for other systems or network shares to infect. Victims usually can only get their files back after paying a specified ransom demand using a virtual currency, such as Bitcoin.

Earlier this year, experts began noticing that cybercriminals were using ransomware to target hospitals — organizations that are heavily reliant on instant access to patient records. In March 2016, Henderson, Ky.-based Methodist Hospital shut down its computer systems after an infection from the Locky strain of ransomware. Just weeks before that attack, a California hospital that was similarly besieged with ransomware paid a $17,000 ransom to get its files back.

According to a recent report by Intel Security, the healthcare sector is experiencing over 20 data loss incidents per day related to ransomware attacks. The company said it identified almost $100,000 in payments from hospital ransomware victims to specific bitcoin accounts so far in 2016.

As dependent as healthcare systems are on computers and information technology, the notion that a computer virus could result in bodily injury or death is no longer the stuff of Hollywood movie scripts. Unfortunately, the healthcare industry is for the most part still catching up in its ability to anticipate, prevent and respond to these types of cyber attacks.

As macabre as it may sound, perhaps people dying because of poor cybersecurity is exactly what it will take for more organizations to dedicate the necessary resources toward adequately defending the systems upon which they so heavily rely.

In 2010, I was interviewed by Team Cyrmu‘s Steve Santorelli as part of their ongoing Who and Why Show. Santorelli gave me a few minutes to answer the question, “What keeps you up at night?” My answer was basically that I worry what will happen to the Internet as we know it when people start to die in a measurable way because of computer and Internet security vulnerabilities and attacks. Here’s the entire interview if anyone cares to have a listen.

The crippling of NHS’s systems came as U.K. Chancellor Philip Hammond unveiled a national cybersecurity strategy, warning that hostile “foreign actors” were developing techniques that threaten the country’s electrical grid and airports, among other critical infrastructure.

“If we want Britain to be the best place in the world to be a tech business then it is also crucial that Britain is a safe place to do the digital business,” Hammond said Tuesday as he described the National Cyber Security Strategy in London. “Trust in the internet and the infrastructure on which it relies is fundamental to our economic future.”

What can businesses do to lessen the chances of having their critical infrastructure crippled by malware like ransomware? The FBI has the following tips:

• Regularly back up data and verify the integrity of those backups. Backups are critical in ransomware incidents; if you are infected, backups may be the best way to recover your critical data.
• Secure your backups. Ensure backups are not connected to the computers and networks they are backing up. Examples might include securing backups in the cloud or physically storing them offline. It should be noted, some instances of ransomware have the capability to lock cloud-based backups when systems continuously back up in real-time, also known as persistent synchronization.
• Scrutinize links contained in e-mails and do not open attachments included in unsolicited e-mails.
• Only download software – especially free software – from sites you know and trust. When possible, verify the integrity of the software through a digital signature prior to execution.
• Ensure application patches for the operating system, software, and firmware are up to date, including Adobe Flash, Java, Web browsers, etc.
• Ensure anti-virus and anti-malware solutions are set to automatically update and regular scans are conducted.
• Disable macro scripts from files transmitted via e-mail. Consider using Office Viewer software to open Microsoft Office files transmitted via e-mail instead of full Office Suite applications.
• Implement software restrictions or other controls to prevent the execution of programs in common ransomware locations, such as temporary folders supporting popular Internet browsers, or compression/decompression programs, including those located in the AppData/LocalAppData folder.

Additional considerations for businesses include the following:

• Focus on awareness and training. Because end users are often targeted, employees should be made aware of the threat of ransomware, how it is delivered, and trained on information security principles and techniques.
• Patch all endpoint device operating systems, software, and firmware as vulnerabilities are discovered. This precaution can be made easier through a centralized patch management system.
• Manage the use of privileged accounts by implementing the principle of least privilege. No users should be assigned administrative access unless absolutely needed. Those with a need for administrator accounts should only use them when necessary; they should operate with standard user accounts at all other times.
• Configure access controls with least privilege in mind. If a user only needs to read specific files, he or she should not have write access to those files, directories, or shares.
• Use virtualized environments to execute operating system environments or specific programs.
• Categorize data based on organizational value, and implement physical/logical separation of networks and data for different organizational units. For example, sensitive research or business data should not reside on the same server and/or network segment as an organization’s e-mail environment.
• Require user interaction for end user applications communicating with Web sites uncategorized by the network proxy or firewall. Examples include requiring users to type in information or enter a password when the system communicates with an uncategorized Web site.
• Implement application whitelisting. Only allow systems to execute programs known and permitted by security policy.

Further reading: SC Magazine UK’s take on the attack.

Perhaps the most bustling marketplace on the Internet where people can compare and purchase so-called “booter” and “stresser” subscriptions — attack-for-hire services designed to knock Web sites offline — announced last week that it has permanently banned the sale and advertising of these services.

On Friday, Oct. 28, Jesse LaBrocca — the administrator of the popular English-language hacking forum Hackforums[dot]net — said he was shutting down the “server stress testing” (SST) section of the forum. The move comes amid heightened public scrutiny of the SST industry, which has been linked to several unusually powerful recent attacks and is responsible for the vast majority of denial-of-service (DOS) attacks on the Internet today.

“Unfortunately once again the few ruin it for the many,” LaBrocca wrote under his Hackforums alias “Omniscient.” “I’m personally disappointed that this is the path I have to take in order to protect the community. I loathe having to censor material that could be beneficial to members. But I need to make sure that we continue to exist and given the recent events I think it’s more important that the section be permanently shut down.”

Last month, a record-sized DDoS hit KrebsOnSecurity.com. The attack was launched with the help of Mirai, a malware strain that enslaves poorly security Internet-of-Things (IoT) devices like CCTV cameras and digital video recorders and uses them to launch crippling attacks.

At the end of September, a Hackforums user named “Anna_Senpai” used the forum to announce the release the source code for Mirai. A week ago, someone used Mirai to launch a massive attack on Internet infrastructure firm Dyn, which for the better part of a day lead to sporadic outages for some of the Web’s top destinations, including Twitter, PayPal, Reddit and Netflix.

As I noted in last week’s story Are the Days of Booter Services Numbered?, many booter service owners have been operating under the delusion or rationalization that their services are intended solely for Web site owners to test the ability of their sites to withstand data deluges.

Whatever illusions booter service operators or users may have harbored about their activities should have been dispelled following a talk delivered at the Black Hat security conference in Las Vegas this year. In that speech, FBI Agent Elliott Peterson issued an unambiguous warning that the agency was prepared to investigate and help prosecute people engaged in selling and buying from booter services.

But it wasn’t until this month’s attack on Dyn that LaBrocca warned the Hackforums community he may have to shut down the SST section.

“I can’t image this attention is going to be a good thing,” Omni said in an October 26, 2016 thread titled “Bad things.” “Already a Senator is calling for a hearing on the Internet of Things [link added]. In the end there could be new laws which effect [sic] us all. So for those responsible for the attacks and creating this mess….you dun goofed. I expect a lot of backlash to come out of this.”

If LaBrocca appears steamed from this turn of events, it’s probably with good reason: He stands to lose a fair amount of regular income by banning some of the most lucrative businesses on his forum. Vendors on Hackforums pay fees as high as $25 apiece to achieve a status that allows them to post new sales threads, and banner ads on the forum can run up to $200 per week.

Vendors who wish to “sticky” their ads — that is, pay to keep the ads displayed prominently near or at the top of a given discussion subforum — pay LaBrocca up to $60 per week for the prime sticky spots. And there were dozens of booter services advertised on Hackforums.

Allison Nixon, director of security research at Flashpoint and an expert on booter services, said the move could put many booter services out of business.

Nixon said the average booter service customer uses the attack services to settle grudges with opponents in online games, and that the closure of the SST subforum may make these services less attractive to those individuals.

“There is probably a lesser likelihood that the average gamer will see these services and think that it’s an okay idea to purchase them,” Nixon said. “The ease of access to these booters services makes people think it’s okay to use them. In gaming circles, for example, people will often use them to DDoS one another and not realize they might be shutting down an innocent person’s network. Recognizing that this is criminal activity on the same level of criminal hacking and fraud may discourage people from using these services, meaning the casual actor may be less likely to buy a booter subscription and launch DDoS attacks.”

Although the closure of the SST subforum could put many booter services out of business, the action almost seems somewhat arbitrary given the sheer amount of other illegal hacking activity that is blatantly advertised on Hackforums, Nixon said.

“It’s interesting the norms that are on this forum because they’re so different from how you or I would recognize acceptable behavior,” she said. “For example, most people would think it’s not acceptable to see booter services advertised alongside remote access Trojans, malware crypting services and botnets.”

Other questionable services and subsections advertised on Hackforums include those intended for the sale of hacked social media and e-commerce accounts. More shocking are the dozens of threads wherein Hackforums members advertise the sale of “girl slaves,” essentially access to hacked computers belonging to teenage girls who can be extorted and exploited for payment or naked pictures. It’s worth noting that the youth who was arrested for snapping nude pictures of Miss Teen USA Cassidy Wolf through her webcam was a regular user of Hackforums.

Nixon said most Hackforums users are essentially good people who are interested in learning more about technology, security and other topics. But she said many of the younger, impressionable members are heavily influenced by some of the more senior forum participants, a number of whom are peddling dangerous products and services.

“Most of the stuff on Hackforuns is not that bad,” Nixon said. “There are a lot of kids who are pretty much normal people and interested in hacking and technology. But there are also gangs, and there are definitely criminal organizations that have a presence on the forum that will try to enable criminal activity and take advantage of people.”

The removal of booter services from Hackforums is a gratifying development for me personally and professionally. My site has been under near-constant attack from users of these booter services for several years now. As a result, I have sought to bring more public attention to these crooked businesses and to the young men who’ve earned handsome profits operating over the years. Here are just a few of those stories:

Stress Testing the Booter Services, Financially

Are the Days of Booter Services Numbered?

Israeli Online Attack Service ‘vDOS’ Earned $600,000 in Two Years

Ragebooter: Legit DDoS Service, or Fed Backdoor?

DDoS Services Advertise Openly, Take PayPal

Booter Shells Turn Web Sites Into Weapons

Spreading the DDoS Disease and Selling the Cure

Lizard Stresser Runs on Hacked Home Routers

The New Normal: 200-400 Gpbs DDoS Attacks

It may soon become easier for Internet service providers to anticipate and block certain types of online assaults launched by Web-based attack-for-hire services known as “booter” or “stresser” services, new research released today suggests.

The findings come from researchers in Germany who’ve been studying patterns that emerge when miscreants attempt to mass-scan the entire Internet looking for systems useful for launching these digital sieges — known as “distributed denial-of-service” or DDoS attacks.

To understand the significance of their research, it may help to briefly examine how DDoS attacks have evolved. Not long ago, if one wanted to take down large Web site, one had to build and maintain a large robot network, or “botnet,” of hacked computers — which is a fairly time intensive, risky and technical endeavor.

These days, however, even the least sophisticated Internet user can launch relatively large DDoS attacks just by paying a few bucks for a subscription to one of dozens of booter or stresser services, some of which even accept credit cards and PayPal payments.

These Web-based DDoS-for-hire services don’t run on botnets: They generally employ a handful of powerful servers that are rented from some dodgy “bulletproof” hosting provider. The booter service accepts payment and attack instructions via a front end Web site that is hidden behind Cloudflare (a free DDoS protection service).

But the back end of the booter service is where the really interesting stuff happens. Virtually all of the most powerful and effective attack types used by booter services rely on a technique called traffic amplification and reflection, in which the attacker can reflect or “spoof” his traffic from one or more third-party machines toward the intended target.

In this type of assault, the attacker sends a message to a third party, while spoofing the Internet address of the victim. When the third party replies to the message, the reply is sent to the victim — and the reply is much larger than the original message, thereby amplifying the size of the attack.

To find vulnerable systems that can be leveraged this way, booters employ large-scale Internet scanning services that constantly seek to refresh the list of systems that can be used for amplification and reflection attacks. They do this because, as research has shown (PDF), anywhere from 40-50 percent of the amplifiers vanish or are reassigned new Internet addresses after one week.

Enter researchers from Saarland University in Germany, as well as the Yokohama National University and National Institute of Information and Communications Technology — both in Japan. In a years-long project first detailed in 2015, the researchers looked for scanning that appeared to be kicked off by ne’er-do-wells running booter services.

To accomplish this, the research team built a kind of distributed “honeypot” system — which they dubbed “AmpPot” — designed to mimic services known to be vulnerable to amplification attacks, such as DNS and NTP floods.

“To make them attractive to attackers, our honeypots send back legitimate responses,” the researchers wrote in a 2015 paper (PDF). “Attackers, in turn, will abuse these honeypots as amplifiers, which allows us to observe ongoing attacks, their victims, and the DDoS techniques. To prevent damage caused by our honeypots, we limit the response rate. This way, while attackers can still find these ratelimited honeypots, the honeypots stop replying in the face of attacks.”

In that 2015 paper, the researchers said they deployed 21 globally-distributed AmpPot instances, which observed more than 1.5 million attacks between February and May 2015. Analyzing the attacks more closely, they found that more than 96% of the attacks stem from single sources, such as booter services.

“When focusing on amplification DDoS attacks, we find that almost all of them (>96%) are caused by single sources (e.g. booters), and not botnets,” the team concluded. “However, we sadly do not have the numbers to compare this [to] DoS attacks in general.”

Many large-scale Internet scans like the ones the researchers sought to measure are launched by security firms and other researchers, so the team needed a way to differentiate between scans launched by booter services and those conducted for research or other benign purposes.

“To distinguish between scans performed by researchers and scans performed with malicious intent we relied on a simple assumption: That no attack would be based on the results of a scan performed by (ethical) researchers,” said Johannes Krupp, one of the main authors of the report. “In fact, thanks to our methodology, we do not have to make this distinction upfront, but we can rather look at the results and say: ‘We found attacks linked to this scanner, therefore this scanner must have been malicious.’ If a scan was truly performed by benign parties, we will not find attacks linked to it.”

SECRET IDENTIFIERS

What’s new in the paper being released today by students at Saarland University’s Center for IT-Security, Privacy and Accountability (CISPA) is the method by which the researchers were able to link these mass-scans to the very amplification attacks that follow soon after.

The researchers worked out a way to encode a secret identifier into the set of AmpPot honeypots that any subsequent attack will use, which varies per scan source. They then tested to see if the scan infrastructure was also used to actually launch (and not just to prepare) the attacks.

Their scheme was based in part on the idea that similar traffic sources should have to travel similar Internet distances to reach the globally-distributed AmpPot sensors. To do this, they looked at the number of “hops” or Internet network segments that each scan and attack had to traverse.

Using trilateration –the process of determining absolute or relative locations of points by measurement of distances — the research team was able to link scanners to attack origins based on hop counts.

These methods revealed some 286 scanners that are used by booter services in preparation for launching amplification attacks. Further, they discovered that roughly 75 percent of those scanners are located in the United States.

The researchers say they were able to confirm that many of the same networks that host scanners are also being used to launch the attacks. More significantly, they were able to attribute approximately one-third of the attacks back to their origin.

“This is an impressive result, given that the spoofed source of amplification attacks usually remains hidden,” said Christian Rossow of Saarland University.

Rosso said the team hopes to conduct further research on their methods to more definitively tie scanning and attack activity to specific booter services by name. The group is already offering a service to hosting providers and ISPs to share information about incidents (such as attack start and end times). Providers can then use the attack information to inform their customers or to filter attack traffic.

“We have shared our findings with law enforcement agencies — in particular, Europol and the FBI — and a closed circle of tier-1 network providers that use our insights on an operational basis,” the researchers wrote. “Our output can be used as forensic evidence both in legal complaints and in ways to add social pressure against spoofing sources.”

ANALYSIS

Even if these newly-described discovery methods were broadly deployed today, it’s unlikely that booter services would be going away anytime soon. But this research certainly holds the promise that booter service owners will be able to hide the true location of their operations less successfully going forward. and that perhaps more of them will be held accountable for their crimes.

Efforts by other researchers have made it more difficult for booter and stresser services to accept PayPal payments, forcing more booters to rely more on Bitcoin.

Also, there are a number of initiatives that seek to identify a handful of booter services which resell their infrastructure to other services who brand and market them as their own. Case in point, in September 2016 I published an expose on vDOS, a booter service that earned (conservatively) $600,000 over two years helping to launch more than 150,000 DDoS attacks.

Turns out, vDOS’s infrastructure was used by more than a half-dozen other booter services, and shortly after vDOS was taken offline most of those services went dark or were dismantled as well.

One major shift that could help to lessen the appeal of booter services — both for the profit-seeking booter proprietors and their customers — is a clear sign from law enforcement officials that this activity is in fact illegal and punishable by real jail time. So far, many booter service owners have been operating under the delusion or rationalization that their services are intended solely for Web site owners to test the ability of their sites to withstand data deluges. The recent arrest of two alleged Lizard Squad members who resold vDOS services through their own “PoodleStresser” service is a good start.

Many booter operators apparently believe (or at least hide behind) a wordy “terms of service” agreement that all customers must acknowledge somehow absolves them of any sort of liability for how their customers use the service — regardless of how much hand-holding and technical support they offer those customers.

Indeed, the proprietors of vDOS — who were arrested shortly after my story about them — told the Wall Street Journal through their attorneys that, “If I was to buy a gun and shoot something, is the person that invents the gun guilty?”

The alleged proprietors of vDOS — 18-year-old Israelis Yarden Bidani and Itay Huri — were released from house arrest roughly ten days after their initial arrest. To date, no charges have been filed against either men, but I have reason to believe that may not be the case for long.

Meanwhile, changes may be afoot for booter services advertised at Hackforums[dot]net, probably the biggest open-air online marketplace where booter services are advertised, compared and rated (hat tip to @MalwareTechblog). Earlier this week, Hackforums administrator Jesse “Omniscient” LaBrocca began restricting access to its “stressers” subsection of the sprawling forum, and barring forum members from advertising booter services in their user profiles.

“I can absolutely see a day when it’s removed entirely,” LaBrocca said in a post explaining his actions. “Could be very soon too.”

My worry is that we may soon see a pendulum shift in the way that many booter services operate. For now, the size of attacks launched by booter services is somewhat dependent on the number and power of the back-end servers used to initiate amplification and reflection attacks.

However, I could see a day in the not-too-distant future in which booter service operators start earning most of their money by reselling far more powerful attacks launched by actual botnets made from large networks of hacked Internet of Things (IoT) devices — such as poorly-secured CCTV cameras and digital video recorders (DVRs).

In some ways this has already happened, as I detailed in my January 2015 story, Lizard Stresser Runs on Hacked Home Routers. But with the now public release of the source code for the Mirai botnet — the same malware strain that was used in the record 620 Gbps DDoS on my site last month and in the widespread Internet outage last week caused by an attack against infrastructure provider Dyn — far more powerful and scalable attacks are now available for resale.

A copy of the paper released today at the ACM CSS conference in Vienna is available here (PDF).

The co-founder of the newly launched Senate Cybersecurity Caucus is pushing federal agencies for possible solutions and responses to the security threat from insecure “Internet of Things” (IoT) devices, such as the network of hacked security cameras and digital video recorders that were reportedly used to help bring about last Friday’s major Internet outages.

In letters to the Federal Communications Commission (FCC), the Federal Trade Commission (FTC) and the Department of Homeland Security (DHS), Virginia Senator Mark Warner (D) called the proliferation of insecure IoT devices a threat to resiliency of the Internet.

“Manufacturers today are flooding the market with cheap, insecure devices, with few market incentives to design the products with security in mind, or to provide ongoing support,” Warner wrote to the agencies. “And buyers seem unable to make informed decisions between products based on their competing security features, in part because there are no clear metrics.”

The letter continues:

“Because the producers of these insecure IoT devices currently are insulated from any standards requirements, market feedback, or liability concerns, I am deeply concerned that we are witnessing a ‘tragedy of the commons’ threat to the continued functioning of the internet, as the security so vital to all internet users remains the responsibility of none. Further, buyers have little recourse when, despite their best efforts, security failures occur” [link added].

As Warner’s letter notes, last week’s attack on online infrastructure provider Dyn was launched at least in part by Mirai, a now open-source malware strain that scans the Internet for routers, cameras, digital video recorders and other Internet of Things “IoT” devices protected only by the factory-default passwords.

Once infected with Mirai, the IoT systems can be used to flood a target with so much junk Web traffic that the target site can no longer accommodate legitimate users or visitors. The attack on Dyn was slightly different because it resulted in prolonged outages for many other networks and Web sites, including Netflix, PayPal, Reddit and Twitter.

As a result of that attack, one of the most-read stories on KrebsOnSecurity so far this year is “Who Makes the IoT Things Under Attack?“, in which I tried to match default passwords sought out by the Mirai malware with IoT hardware devices for sale on the commercial market today.

In a follow-up to that story, I interviewed researchers at Flashpoint who discovered that one of the default passwords sought by machines infected with Mirai — username: root and password: xc3511 — is embedded in a broad array of white-labeled DVR and IP camera electronics boards made by a Chinese company called XiongMai Technologies. These components are sold downstream to vendors who then use them in their own products (for a look at XionMai’s response to all this, see Monday’s story, IoT Device Maker Vows Product Recall, Legal Action Against Western Accusers).

In his inquiry to the federal agencies, Warner asked whether there was more the government could be doing to vet the security of IoT devices before or after they are plugged into networks.

“In the FCC’s Open Internet Order, the Commission suggested that ISPs could take such steps only when addressing ‘traffic that constitutes a denial-of-service attack on specific network infrastructure elements,'” Warner wrote in his missive to the FCC.  “Is it your agency’s opinion that the Mirai attack has targeted ‘specific network infrastructure elements’ to warrant a response from ISPs?”

In another line of questioning, Warner also asked whether it would it be a reasonable network management practice for ISPs to designate insecure network devices as “insecure” and thereby deny them connections to their networks, including by refraining from assigning devices IP addresses.

It’s good to see lawmakers asking questions about whether there is a market failure here that requires government intervention or regulation. Judging from the comments on my story earlier this month — Europe to Push New Security Rules Amid IoT Mess — KrebsOnSecurity readers remain fairly divided on the role of government in addressing the IoT problem.

I have been asked by several reporters over the past few days whether I think government has a role to play in fixing the IoT mess. Personally, I do not believe there has ever been a technology challenge that was best served by additional government regulation.

However, I do believe that the credible threat of government regulation is very often what’s needed to spur the hi-tech industry into meaningful action and self-regulation. And that process usually starts with inquiries like these. So, here’s hoping more lawmakers in Congress can get up to speed quickly on this vitally important issue.

Sen. Warner’s letter to the FCC looks very similar to those sent to the other two agencies. A copy of it is available here.

A Chinese electronics firm pegged by experts as responsible for making many of the components leveraged in last week’s massive attack that disrupted Twitter and dozens of popular Web sites has vowed to recall some of its vulnerable products, even as it threatened legal action against this publication and others for allegedly tarnishing the company’s brand.

Last week’s attack on online infrastructure provider Dyn was launched at least in part by Mirai, a now open-source malware strain that scans the Internet for routers, cameras, digital video recorders and other Internet of Things “IoT” devices protected only by the factory-default passwords. Once infected with Mirai, the IoT systems can be used to flood a target with so much junk Web traffic that the target site can no longer accommodate legitimate users or visitors.

In an interim report on the attack, Dyn said: “We can confirm, with the help of analysis from Flashpoint and Akamai, that one source of the traffic for the attacks were devices infected by the Mirai botnet. We observed 10s of millions of discrete IP addresses associated with the Mirai botnet that were part of the attack.”

As a result of that attack, one of the most-read stories on KrebsOnSecurity so far this year is “Who Makes the IoT Things Under Attack?“, in which I tried to match default passwords sought out by the Mirai malware with IoT hardware devices for sale on the commercial market today.

In a follow-up to that story, I interviewed researchers at Flashpoint who discovered that one of the default passwords sought by machines infected with Mirai — username: root and password: xc3511 — is embedded in a broad array of white-labeled DVR and IP camera electronics boards made by a Chinese company called XiongMai Technologies. These components are sold downstream to vendors who then use them in their own products.

The scary part about IoT products that include XiongMai’s various electronics components, Flashpoint found, was that while users could change the default credentials in the devices’ Web-based administration panel, the password is hardcoded into the device firmware and the tools needed to disable it aren’t present.

In a statement issued on social media Monday, XiongMai (referring to itself as “XM”) said it would be issuing a recall on millions of devices — mainly network cameras.

“Mirai is a huge disaster for the Internet of Things,” the company said in a separate statement emailed to journalists. “XM have to admit that our products also suffered from hacker’s break-in and illegal use.”

At the same time, the Chinese electronics firm said that in September 2015 it issued a firmware fix for vulnerable devices, and that XiongMai hardware shipped after that date should not by default be vulnerable.

“Since then, XM has set the device default Telnet off to avoid the hackers to connect,” the company said. “In other words, this problem is absent at the moment for our devices after Sep 2015, as Hacker cannot use the Telnet to access our devices.”

Regarding the default user name/password that ships with XM, “our devices are asking customers to change the default password when they first time to login,” the electronics maker wrote. “When customer power on the devices, the first step, is change the default password.”

I’m working with some researchers who are testing XM’s claims, and will post an update here if and when that research is available. In the meantime, XM is threatening legal action against media outlets that it says are issuing “false statements” against the company.

Google’s translation of their statement reads, in part: “Organizations or individuals false statements, defame our goodwill behavior … through legal channels to pursue full legal responsibility for all violations of people, to pursue our legal rights are reserved.”

The statement by XM’s lawyers doesn’t name KrebsOnSecurity per se, but instead links to a Chinese media story referencing this site under the heading, “untrue reports link.”

Karas said the recent Mirai botnet attacks have created “extreme concerns about the impact of Chinese video surveillance products.” Nevertheless,  he said, the threats against those the company accuses of issuing false statements are more about saving face.

“We believe Xiongmai has issued this announcement as a PR effort within China, to help counter criticisms they are facing,” Karas wrote. “We do not believe that Xiongmai or the Ministry of Justice is seriously going to sue any Western companies as this is a typical tactic to save face.”

Update,Oct. 25, 8:47 a.m.: Updated the story to reflect an oddity of Google Translate, which translated the statement from XM’s legal department as Justice Ministry. The threats of litigation come from XM, not the Chinese government. Also made clear that the threat was first written about by IPVM.