A massive and sustained Internet attack that has caused outages and network congestion today for a large number of Web sites was launched with the help of hacked “Internet of Things” (IoT) devices, such as CCTV video cameras and digital video recorders, new data suggests.

Earlier today cyber criminals began training their attack cannons on Dyn, an Internet infrastructure company that provides critical technology services to some of the Internet’s top destinations. The attack began creating problems for Internet users reaching an array of sites, including Twitter, Amazon, Tumblr, Reddit, Spotify and Netflix.

A depiction of the outages caused by today’s attacks on Dyn, an Internet infrastructure company. Source: Downdetector.com.

At first, it was unclear who or what was behind the attack on Dyn. But over the past few hours, at least one computer security firm has come out saying the attack involved Mirai, the same malware strain that was used in the record 620 Gpbs attack on my site last month. At the end September 2016, the hacker responsible for creating the Mirai malware released the source code for it, effectively letting anyone build their own attack army using Mirai.

Mirai scours the Web for IoT devices protected by little more than factory-default usernames and passwords, and then enlists the devices in attacks that hurl junk traffic at an online target until it can no longer accommodate legitimate visitors or users.

According to researchers at security firm Flashpoint, today’s attack was launched at least in part by a Mirai-based botnet. Allison Nixon, director of research at Flashpoint, said the botnet used in today’s ongoing attack is built on the backs of hacked IoT devices — mainly compromised digital video recorders (DVRs) and IP cameras made by a Chinese hi-tech company called XiongMai Technologies. The components that XiongMai makes are sold downstream to vendors who then use it in their own products.

“It’s remarkable that virtually an entire company’s product line has just been turned into a botnet that is now attacking the United States,” Nixon said, noting that Flashpoint hasn’t ruled out the possibility of multiple botnets being involved in the attack on Dyn.

“At least one Mirai [control server] issued an attack command to hit Dyn,” Nixon said. “Some people are theorizing that there were multiple botnets involved here. What we can say is that we’ve seen a Mirai botnet participating in the attack.”

As I noted earlier this month in Europe to Push New Security Rules Amid IoT Mess, many of these products from XiongMai and other makers of inexpensive, mass-produced IoT devices are essentially unfixable, and will remain a danger to others unless and until they are completely unplugged from the Internet.

That’s because while many of these devices allow users to change the default usernames and passwords on a Web-based administration panel that ships with the products, those machines can still be reached via more obscure, less user-friendly communications services called “Telnet” and “SSH.”

Telnet and SSH are command-line, text-based interfaces that are typically accessed via a command prompt (e.g., in Microsoft Windows, a user could click Start, and in the search box type “cmd.exe” to launch a command prompt, and then type “telnet” to reach a username and password prompt at the target host).

“The issue with these particular devices is that a user cannot feasibly change this password,” Flashpoint’s Zach Wikholm told KrebsOnSecurity. “The password is hardcoded into the firmware, and the tools necessary to disable it are not present. Even worse, the web interface is not aware that these credentials even exist.”

Flashpoint’s researchers said they scanned the Internet on Oct. 6 for systems that showed signs of running the vulnerable hardware, and found more than 515,000 of them were vulnerable to the flaws they discovered.

“I truly think this IoT infrastructure is very dangerous on the whole and does deserve attention from anyone who can take action,” Flashpoint’s Nixon said.

It’s unclear what it will take to get a handle on the security problems introduced by millions of insecure IoT devices that are ripe for being abused in these sorts of assaults.

As I noted in The Democratization of Censorship, to address the threat from the mass-proliferation of hardware devices such as Internet routers, DVRs and IP cameras that ship with default-insecure settings, we probably need an industry security association, with published standards that all members adhere to and are audited against periodically.

The wholesalers and retailers of these devices might then be encouraged to shift their focus toward buying and promoting connected devices which have this industry security association seal of approval. Consumers also would need to be educated to look for that seal of approval. Something like Underwriters Laboratories (UL), but for the Internet, perhaps.

Until then, these insecure IoT devices are going to stick around like a bad rash — unless and until there is a major, global effort to recall and remove vulnerable systems from the Internet. In my humble opinion, this global cleanup effort should be funded mainly by the companies that are dumping these cheap, poorly-secured hardware devices onto the market in an apparent bid to own the market. Well, they should be made to own the cleanup efforts as well.

Devices infected with Mirai are instructed to scour the Internet for IoT devices protected by more than 60 default usernames and passwords. The entire list of those passwords — and my best approximation of which firms are responsible for producing those hardware devices — can be found at my story, Who Makes the IoT Things Under Attack.

Update 10:30 a.m., Oct. 22: Corrected attribution on outage graphic.

Criminals this morning massively attacked Dyn, a company that provides core Internet services for Twitter, SoundCloud, Spotify, Reddit and a host of other sites, causing outages and slowness for many of Dyn’s customers.

Twitter is experiencing problems, as seen through the social media platform Hootsuite.

In a statement, Dyn said that this morning, October 21, Dyn received a global distributed denial of service (DDoS) attack on its DNS infrastructure on the east coast starting at around 7:10 a.m. ET (11:10 UTC).

“DNS traffic resolved from east coast name server locations are experiencing a service interruption during this time. Updates will be posted as information becomes available,” the company wrote.

DYN encouraged customers with concerns to check the company’s status page for updates and to reach out to its technical support team.

A DDoS is when crooks use a large number of hacked or ill-configured systems to flood a target site with so much junk traffic that it can no longer serve legitimate visitors.

DNS refers to Domain Name System services. DNS is an essential component of all Web sites, responsible for translating human-friendly Web site names like “example.com” into numeric, machine-readable Internet addresses. Anytime you send an e-mail or browse a Web site, your machine is sending a DNS look-up request to your Internet service provider to help route the traffic.

ANALYSIS

The attack on DYN comes just hours after DYN researcher Doug Madory presented a talk on DDoS attacks in Dallas, Texas at a meeting of the North American Network Operators Group (NANOG). Madory’s talk — available here on Youtube.com — delved deeper into research that he and I teamed up on to produce the data behind the story DDoS Mitigation Firm Has History of Hijacks.

That story (as well as one published earlier this week, Spreading the DDoS Disease and Selling the Cure) examined the sometimes blurry lines between certain DDoS mitigation firms and the cybercriminals apparently involved in launching some of the largest DDoS attacks the Internet has ever seen. Indeed, the record 620 Gbps DDoS against KrebsOnSecurity.com came just hours after I published the story on which Madory and I collaborated.

The record-sized attack that hit my site last month was quickly superseded by a DDoS against OVH, a French hosting firm that reported being targeted by a DDoS that was roughly twice the size of the assault on KrebsOnSecurity. As I noted in The Democratization of Censorship — the first story published after bringing my site back up under the protection of Google’s Project Shield — DDoS mitigation firms simply did not count on the size of these attacks increasing so quickly overnight, and are now scrambling to secure far greater capacity to handle much larger attacks concurrently.

The size of these DDoS attacks has increased so much lately thanks largely to the broad availability of tools for compromising and leveraging the collective firepower of so-called Internet of Things devices — poorly secured Internet-based security cameras, digital video recorders (DVRs) and Internet routers. Last month, a hacker by the name of Anna_Senpai released the source code for Mirai, a crime machine that enslaves IoT devices for use in large DDoS attacks. The 620 Gbps attack that hit my site last month was launched by a botnet built on Mirai, for example.

Interestingly, someone is now targeting infrastructure providers with extortion attacks and invoking the name Anna_senpai. According to a discussion thread started Wednesday on Web Hosting Talk, criminals are now invoking the Mirai author’s nickname in a bid to extort Bitcoins from targeted hosting providers.

“If you will not pay in time, DDoS attack will start, your web-services will
go down permanently. After that, price to stop will be increased to 5 BTC
with further increment of 5 BTC for every day of attack.

NOTE, i?m not joking.

My attack are extremely powerful now – now average 700-800Gbps, sometimes over 1 Tbps per second. It will pass any remote protections, no current protection systems can help.”

Let me be clear: I have no data to indicate that the attack on Dyn is related to extortion, to Mirai or to any of the companies or individuals Madory referenced in his talk this week in Dallas. But Dyn is known for publishing detailed writeups on outages at other major Internet service providers. Here’s hoping the company does not deviate from that practice and soon publishes a postmortem on its own attack.

Update, 3:50 p.m. ET: Security firm Flashpoint is now reporting that they have seen indications that a Mirai-based botnet is indeed involved in the attack on Dyn today. Separately, I have heard from a trusted source who’s been tracking this activity and saw chatter in the cybercrime underground yesterday discussing a plan to attack Dyn.

Update, 10:22 a.m. ET: Dyn’s status page reports that all services are back to normal as of 13:20 UTC (9:20 a.m. ET). Fixed the link to Doug Madory’s talk on Youtube, to remove the URL shortener (which isn’t working because of this attack).

Update, 1:01 p.m. ET: Looks like the attacks on Dyn have resumed and this event is ongoing. This, from the Dyn status page:

This DDoS attack may also be impacting Dyn Managed DNS advanced services with possible delays in monitoring. Our Engineers are continuing to work on mitigating this issue.
Oct 21, 16:48 UTC

As of 15:52 UTC, we have begun monitoring and mitigating a DDoS attack against our Dyn Managed DNS infrastructure. Our Engineers are continuing to work on mitigating this issue.
Oct 21, 16:06 UTC

Earlier this month a hacker released the source code for Mirai, a malware strain that was used to launch a historically large 620 Gbps denial-of-service attack against this site in September. That attack came in apparent retribution for a story here which directly preceded the arrest of two Israeli men for allegedly running an online attack for hire service called vDOS. Turns out, the site where the Mirai source code was leaked had some very interesting things in common with the place vDOS called home.

The domain name where the Mirai source code was originally placed for download — santasbigcandycane[dot]cx — is registered at the same domain name registrar that was used to register the now-defunct DDoS-for-hire service vdos-s[dot]com.

Normally, this would not be remarkable, since most domain registrars have thousands or millions of domains in their stable. But in this case it is interesting mainly because the registrar used by both domains — a company called namecentral.com — has apparently been used to register just 38 domains since its inception by its current owner in 2012, according to a historic WHOIS records gathered by domaintools.com (for the full list see this PDF).

What’s more, a cursory look at the other domains registered via namecentral.com since then reveals a number of other DDoS-for-hire services, also known as “booter” or “stresser” services.

It’s extremely odd that someone would take on the considerable cost and trouble of creating a domain name registrar just to register a few dozen domains. It costs $3,500 to apply to the Internet Corporation for Assigned Names and Numbers (ICANN) for a new registrar authority. The annual fee for being an ICANN-approved registrar is $4,000, and then there’s a $800 quarterly fee for smaller registrars. In short, domain name registrars generally need to register many thousands of new domains each year just to turn a profit.

Many of the remaining three dozen or so domains registered via Namecentral over the past few years are tied to vDOS. Before vDOS was taken offline it was massively hacked, and a copy of the user and attack database was shared with KrebsOnSecurity. From those records it was easy to tell which third-party booter services were using vDOS’s application programming interface (API), a software function that allowed them to essentially resell access to vDOS with their own white-labeled stresser.

And a number of those vDOS resellers were registered through Namecentral, including 83144692[dot].com — a DDoS-for-hire service marketed at Chinese customers. Another Namecentral domain — vstress.net — also was a vDOS reseller.

Other DDoS-for-hire domains registered through Namecentral include xboot[dot]net, xr8edstresser[dot]com, snowstresser[dot]com, ezstress[dot]com, exilestress[dot]com, diamondstresser[dot]net, dd0s[dot]pw, rebelsecurity[dot]net, and beststressers[dot]com.

WHO RUNS NAMECENTRAL?

Namecentral’s current owner is a 19-year-old California man by the name of Jesse Wu. Responding to questions emailed from KrebsOnSecurity, Wu said Namecentral’s policy on abuse was inspired by Cloudflare, the DDoS protection company that guards Namecentral and most of the above-mentioned DDoS-for-hire sites from attacks of the very kind they sell.

“I’m not sure (since registrations are automated) but I’m going to guess that the reason you’re interested in us is because some stories you’ve written in the past had domains registered on our service or otherwise used one of our services,” Wu wrote.

“We have a policy inspired by Cloudflare’s similar policy that we ourselves will remain content-neutral and in the support of an open Internet, we will almost never remove a registration or stop providing services, and furthermore we’ll take any effort to ensure that registrations cannot be influenced by anyone besides the actual registrant making a change themselves – even if such website makes us uncomfortable,” Wu said. “However, as a US based company, we are held to US laws, and so if we receive a valid court issued order to stop providing services to a client, or to turn over/disable a domain, we would happily comply with such order.”

Wu’s message continued:

“As of this email, we have never received such an order, we have never been contacted by any law enforcement agency, and we have never even received a legitimate, credible abuse report. We realize this policy might make us popular with ‘dangerous’ websites but even then, if we denied them services, simply not providing them services would not make such website stop existing, they would just have to find some other service provider/registrar or change domains more often. Our services themselves cannot be used for anything harmful – a domain is just a string of letters, and the rest of our services involve website/ddos protection/ecommerce security services designed to protect websites.”

Taking a page from Cloudflare, indeed. I’ve long taken Cloudflare to task for granting DDoS protection for countless DDoS-for-hire services, to no avail. I’ve maintained that Cloudflare has a blatant conflict of interest here, and that the DDoS-for-hire industry would quickly blast itself into oblivion because the proprietors of these attack services like nothing more than to turn their attack cannons on each other. Cloudflare has steadfastly maintained that picking and choosing who gets to use their network is a slippery slope that it will not venture toward.

Although Mr. Wu says he had nothing to do with the domains registered through Namecentral, public records filed elsewhere raise serious unanswered questions about that claim.

In my Sept. 8 story, Israeli Online Attack Service Earned $600,000 in Two Years, I explained that the hacked vDOS database indicated the service was run by two 18-year-old Israeli men. At some point, vDOS decided to protect all customer logins to the service with an extended validation (EV) SSL certificate. And for that, it needed to show it was tied to an actual corporate entity.

My investigation into those responsible for supporting vDOS began after I took a closer look at the SSL certificate that vDOS-S[dot]com used to encrypt customer logins. On May 12, 2015, Digicert.com issued an EV SSL certificate for vDOS, according to this record.

As we can see, whoever registered that EV cert did so using the business name VS NETWORK SERVICES LTD, and giving an address in the United Kingdom of 217 Blossomfield Rd., Solihull, West Midlands.

Who owns VS NETWORK SERVICES LTD? According this record from Companies House UK — an official ledger of corporations located in the United Kingdom — the director of the company was listed as one Thomas McGonagall. 

Records from Companies House UK on the firm responsible for registering vDOS’s SSL certificate.

This individual gave the same West Midlands address, stating that he was appointed to VS Network Services on May 12, 2015, and that his birthday was in May 1988. A search in Companies House for Thomas McGonagall shows that a person by that same name and address also was listed that very same day as a director for a company called REBELSECURITY LTD.

If we go back even further into the corporate history of this mysterious Mr. McGonagall we find that he was appointed director of NAMECENTRAL LTD on August 18, 2014. Mr. McGonagall’s birthday is listed as December 1995 in this record, and his address is given as 29 Wigorn Road, 29 Wigorn Road, Smethwick, West Midlands, United Kingdom, B67 5HL. Also on that same day, he was appointed to run EZSTRESS LTD, a company at the same Smethwick, West Midlands address.

Strangely enough, those company names correspond to other domains registered through Namecentral around the same time the companies were created, including rebelsecurity[dot]net, ezstress[dot]net.

Asked to explain the odd apparent corporate connections between Namecentral, vDOS, EZStress and Rebelsecurity, Wu chalked that up to an imposter or potential phishing attack.

“I’m not sure who that is, and we are not affiliated with Namecentral Ltd.,” he wrote. “I looked it up though and it seems like it is either closed or has never been active. From what you described it could be possible someone set up shell companies to try and get/resell EV certs (and someone’s failed attempt to set up a phishing site for us – thanks for the heads up).”

Interestingly, among the three dozen or so domains registered through Namecentral.com is “certificateavenue.com,” a site that until recently included nearly identical content as Namecentral’s home page and appears to be aimed at selling EV certs. Certificateavenue.com was responding as of early-October, but it is no longer online.

I also asked Wu why he chose to become a domain registrar when it appeared he had very few domains to justify the substantial annual costs of maintaining a registrar business.

“Like most other registrars, we register domains only as a value added service,” he replied via email. “We have more domains than that (not willing to say exactly how many) but primarily we make our money on our website/ddos protection/ecommerce protection.”

Now we were getting somewhere. Turns out, Wu isn’t really in the domain registrar business — not for the money, anyway. The real money, as his response suggests, is in selling DDoS protection against the very DDoS-for-hire services he is courting with his domain registration service.

Asked to reconcile his claim for having a 100 percent hands-off, automated domain registration system with the fact that Namecentral’s home page says the company doesn’t actually have a way to accept automated domain name registrations (like most normal domain registrars), Wu again had an answer.

“Our site says we only take referred registrations, meaning that at the moment we’re asking that another prior customer referred you to open a new account for our services, including if you’d like a reseller account,” he wrote.

CAUGHT IN A FIB?

I was willing to entertain the notion that perhaps Mr. Wu was in fact the target of a rather elaborate scam of some sort. That is, until I stumbled upon another company that was registered in the U.K. to Mr. McGonagall.

That other company —SIMPLIFYNT LTD — was registered by Mr. McGonagall on October 29, 2014. Turns out, almost the exact same information included in the original Web site registration records for Jesse Wu’s purchase of Namecentral.com was used for the domain simplifynt.com, which also was registered on Oct. 29, 2014. I initially missed this domain because it was not registered through Namecentral. If someone had phished Mr. Wu in this case, they had been very quick to the punch indeed.

In the simplyfynt.com domain registration records, Jesse Wu gave his email address as jesse@jjdev.ru. That domain is no longer online, but a cached copy of it at archive.org shows that it was once a Web development business. That cached page lists yet another contact email address: sales@jjdevelopments.org.

I ordered a reverse WHOIS lookup from domaintools.com on all historic Web site registration records that included the domain “jjdevelopments.org” anywhere in the records. The search returned 15 other domains, including several more apparent DDoS-for-hire domains such as twbooter69.com, twbooter3.com, ratemyddos.com and desoboot.com.

Among the oldest and most innocuous of those 15 domains was maplemystery.com, a fan site for a massively multiplayer online role-playing game (MMORPG) called Maple Story. Another historic record lookup ordered from domaintools.com shows that maplemystery.com was originally registered in 2009 to a “Denny Ng.” As it happens, Denny Ng is listed as the co-owner of the $1.6 million Walnut, Calif. home where Jesse until very recently lived with his mom Cindy Wu (Jesse is now a student at the University of California, San Diego).

WHO IS DATAWAGON?

Another domain of interest that was secured via Namecentral is datawagon.net. Registered by 19-year-old Christopher J. “CJ” Sculti Jr., Datawagon also bills itself as a DDoS mitigation firm. It appears Mr. Sculti built his DDoS protection empire out of his parents’ $2.6 million home in Rye, NY. He’s now a student at Clemson University, according to his Facebook page.

CJ Sculti Jr.’s Facebook profile photo. Sculti is on pictured on the right.

As I noted in my story DDoS Mitigation Firm Has a History of Hijacks, Sculti earned his 15 minutes of fame in 2015 when he lost a cybersquatting suit with Dominos Pizza after registering the domain dominos.pizza (another domain registered via Namecentral).

Around that time, Sculti contacted KrebsOnSecurity via Skype, asking if I’d be interested in writing about this cybersquatting dispute with Dominos. In that conversation, Sculti — apropos of nothing — admits to having just scanned the Internet for routers that were known to be protected by little more than the factory-default usernames and passwords.

Sculti goes on to brag that his scan revealed a quarter-million routers that were vulnerable, and that he then proceeded to upload some kind software to each vulnerable system. Here’s a snippet of that chat conversation, which is virtually one-sided.

July 7, 2015:

21:37 CJ http://krebsonsecurity.com/2015/06/crooks-use-hacked-routers-to-aid-cyberheists/

21:37 CJ
vulnerable routers are a HUGE issue

21:37 CJ
a few months ago

21:37 CJ
I scanned the internet with a few sets of defualt logins

21:37 CJ
for telnet

21:37 CJ
and I was able to upload and execute a binary

21:38 CJ
on 250k devices

21:38 CJ
most of which were routers

21:38 Brian Krebs
o_0

21:38 CJ
yea

21:38 CJ
i’m surprised no one has looked into that yet

21:38 CJ
but

21:39 CJ
it’s a huge issue lol

21:39 CJ
that’s tons of bandwidth

21:39 CJ
that could be potentially used

21:39 CJ
in the wrong way

21:39 CJ
lol
—

Tons of bandwidth, indeed. The very next time I heard from Sculti was the same day I published the above-mentioned story about Datawagon’s relationship to BackConnect Inc., a company that admitted to hijacking 256 Internet addresses from vDOS’s hosting provider in Bulgaria — allegedly to defend itself against a monster attack allegedly launched by vDOS’s proprietors.

Sculti took issue with how he was portrayed in that report, and after a few terse words were exchanged, I blocked his Skype account from further communicating with mine. Less than an hour after that exchange, my Skype inbox was flooded with thousands of bogus contact requests from hacked or auto-created Skype accounts.

Less than six hours after that conversation, my site came under the biggest DDoS attack the Internet had ever witnessed at the time, an attack that experts have since traced back to a large botnet of IoT devices infected with Mirai.

As I wrote in the story that apparently incurred Sculti’s ire, Datawagon — like BackConnect — also has a history of hijacking broad swaths of Internet address space that do not belong to it. That listing came not long after Datawagon announced that it was the rightful owner of some 256 Internet addresses (1.3.3.0/24) that had long been dormant.

The Web address 1.3.3.7 currently does not respond to browser requests, but it previously routed to a page listing the core members of a hacker group calling itself the Money Team. Other sites also previously tied to that Internet address include numerous DDoS-for-hire services, such as nazistresser[dot]biz, exostress[dot]in, scriptkiddie[dot]eu, packeting[dot]eu, leet[dot]hu, booter[dot]in, vivostresser[dot]com, shockingbooter[dot]com and xboot[dot]info, among others.

Datawagon has earned a reputation on hacker forums as a “bulletproof” hosting provider — one that will essentially ignore abuse complaints from other providers and turn a blind eye to malicious activity perpetrated by its customers. In the screenshot below — taken from a thread on Hackforums where Datawagon was suggested as a reliable bulletproof hoster — the company is mentioned in the same vein as HostSailor, another bulletproof provider that has been the source of much badness (as well as legal threats against this author).

In yet another Hackforums discussion thread from June 2016 titled “VPS [virtual private servers] that allow DDoS scripts,” one user recommends Datawagon. “I use datawagon.net. They allow anything.”

Last year, Sculti formed a company in Florida along with a self-avowed spammer. Perhaps unsurprisingly, anti-spam group Spamhaus soon listed virtually all of Datawagon’s Internet address space as sources of spam.

Are either Mr. Wu or Mr. Sculti behind the Mirai botnet attacks? I cannot say. But I’d be willing to bet money that one or both of them knows who is. In any case, it would appear that both men may have hit upon a very lucrative business model. More to come.

The national news media has been consumed of late with reports of Russian hackers breaking into networks of the Democratic National Committee. Lest the Republicans feel left out of all the excitement, a report this past week out of The Netherlands suggests Russian hackers have for the past six months been siphoning credit card data from visitors to the Web storefront of the National Republican Senatorial Committee (NRSC).

That’s right: If you purchased a “Never Hillary” poster or donated funds to the NRSC through its Web site between March 2016 and the first week of this month, there’s an excellent chance that your payment card data was siphoned by malware and is now for sale in the cybercrime underground.

News of the break-in comes from Dutch researcher Willem De Groot, co-founder and head of security at Dutch e-commerce site byte.nl. De Groot said the NRSC was one of more than 5,900 e-commerce sites apparently hacked by the same actors, and that the purloined card data was sent to a network of servers operated by a Russian-language Internet service provider incorporated in Belize.

De Groot said he dissected the malware planted on the NRSC’s site and other servers (his analysis of the malware is available here) and found that the hackers used security vulnerabilities or weak passwords to break in to the various e-commerce sites.

The researcher found the malware called home to specific Web destinations made to look like legitimate sites associated with e-commerce activity, such as jquery-cloud[dot]net, visa-cdn[dot]com, and magento-connection[dot]com.

“[The attackers] really went out of their way to pick domain names that look legitimate,” De Groot said.

The NRSC did not respond to multiple requests for comment, but a cached copy of the site’s source code from October 5, 2016 indicates the malicious code was on the site at the time (load this link, click “view source” and then Ctrl-F for “jquery-cloud.net”).

A majority of the malicious domains inserted into the hacked sites by the malware map back to a few hundred Internet addresses assigned to a company called dataflow[dot]su.

Dataflow markets itself as an “offshore” hosting provider with presences in Belize and The Seychelles. Dataflow has long been advertised on Russian-language cybercrime forums as an offshore haven that offers so-called “bulletproof hosting,” a phrase used to describe hosting firms that court all manner of sites that most legitimate hosting firms shun, including those that knowingly host spam and phishing sites as well as malicious software.

De Groot published a list of the sites currently present at Dataflow. The list speaks for itself as a collection of badness, including quite a number of Russian-language sites selling synthetic drugs and stolen credit card data.

According to De Groot, other sites that were retrofitted with the malware included e-commerce sites for the shoe maker Converse as well as the automaker Audi, although he says those sites and the NRSC’s have been scrubbed of the malicious software since his report was published.

But De Groot said the hackers behind this scheme are continuing to find new sites to compromise.

“Last Monday my scans found about 5,900 hacked sites,” he said. “When I did another scan two days later, I found about 340 of those had been fixed, but that another 170 were newly compromised.”

According to the researcher’s analysis, many of the hacked sites are running outdated e-commerce software or content management software. In other cases, it appears the attackers simply brute-forced or guessed passwords needed to administer the sites.

Further, he said, the attackers appear to have inserted their malware into the e-commerce sites’ databases, rather than into the portion of the Web server used to store HTML and other components that make up how the site looks to visitors

“That’s why I think this has remained under the radar for a while now,” De Groot said. “Because some companies use filesystem checkers so that if some file changes on the system they will get a notice that alerts them something is wrong.”

Unfortunately, those same checking systems generally aren’t configured to look for changes in the site’s database files, he explained, since those are expected to change constantly — such as when a new customer order for merchandise is added.

De Groot said he was amazed at how many e-commerce merchants he approached about the hack dismissed the intrusion, reasoning that they employed secure sockets layer (SSL) technology that encrypted the customers’ information end-to-end.

What many Webmaster fail to realize is that just as PC-baed trojan horse programs can steal data from Web browsers of infected victims, Web-based keylogging programs can do the same, except they’re designed to steal data from Web server applications.

PC Trojans siphon information using two major techniques: snarfing passwords stored in the browser, and conducting “form grabbing” — capturing any data entered into a form field in the browser before it can be encrypted in the Web session and sent to whatever site the victim is visiting.

Web-based keyloggers also can do form grabbing, ripping out form data submitted by visitors — including names, addresses, phone numbers, credit card numbers and card verification code — as customers are submitting the data during the online checkout process.

These attacks drive home one immutable point about malware’s role in subverting secure connections: Whether resident on a Web server or on an end-user computer, if either endpoint is compromised, it’s ‘game over’ for the security of that Web session.

With PC banking trojans, it’s all about surveillance on the client side pre-encryption, whereas what the bad guys are doing with these Web site attacks involves sucking down customer data post- or pre-encryption (depending on whether the data was incoming or outgoing).

This blog has featured several stories about payment card skimming devices designed to be placed over top of credit card terminals in self-checkout lanes at grocery stores and other retailers. Many readers have asked for more details about the electronics that power these so-called “overlay” skimmers. Here’s a look at one overlay skimmer  equipped with Bluetooth technology that allows thieves to snarf swiped card data and PINs wirelessly using nothing more than a mobile phone.

The rather crude video below shows a Bluetooth enabled overlay skimmer crafted to be slipped directly over top of Ingenico iSC250 credit card terminals. These Ingenico terminals are widely used at countless U.S. based merchants; earlier this year I wrote about Ingenico overlay skimmers being found in self-checkout lanes at some WalMart locations.

The demo video briefly shows the electronics hidden on the back side of the overlay skimmer, but most of the sales video demonstrates the Bluetooth functionality built into the device. The video appears to show the skimmer seller connecting his mobile phone to the Bluetooth elements embedded in the skimmer. The demo continues on to show the phone intercepting PIN pad presses and card swipe data.

Your basic Bluetooth signal has a range of approximately 100 meters (328 feet), so theoretically skimmer scammers who placed one of these devices over top of a card terminal in a store’s self-checkout lane could simply sit in a vehicle parked outside the storefront and suck down card data wirelessly in real-time. However, that kind of continuous communication likely would place undue strain on the skimmer’s internal battery, thus dramatically decreasing the length of time the skimmer could collect card and PIN data before needed a new battery.

Rather, such a skimmer would most likely be configured to store the stolen PIN and card data until such time as its owner skulks within range of the device and instructs it to transmit the stored card data.

Concerned about whether the Ingenico terminals at your favorite store may be compromised by one of these overlay skimmers? Turns out, payment terminals retrofitted with overlay skimmers have quite a few giveaways if you know what to look for. Learn how to identify one, by checking out my tutorial, How to Spot Ingenico Self-Checkout Skimmers.

If you liked this piece, have a look at the other skimmer stories in my series, All About Skimmers. And if you’re curious about how card data stolen through skimmers like these are typically sold, take a peek inside a professional carding shop.

The red calipers in the image above show the size differences in various noticeable areas of the case overlay on the left compared to the actual ISC250 on the right. Source: Ingenico.

Thanks to Alex Holden of Hold Security LLC for sharing the above video footage.