There are still many unanswered questions about the recent attack on Sony Pictures Entertainment, such as how the attackers broke in, how long they were inside Sony’s network, whether they had inside help, and how the attackers managed to steal terabytes of data without notice. To date, a sizable number of readers remain unconvinced about the one conclusion that many security experts and the U.S. government now agree upon: That North Korea was to blame. This post examines some compelling evidence from past such attacks that has helped inform that conclusion.

The last time the world saw an attack like the one that slammed SPE was on March 20, 2013, when computer networks running three major South Korean banks and two of the country’s largest television broadcasters were hit with crippling attacks that knocked them offline and left many South Koreans unable to withdraw money from ATMs. The attacks came as American and South Korean military forces were conducting joint exercises in the Korean Peninsula.

That attack relied in part on malware dubbed “Dark Seoul,” which was designed to overwrite the initial sections of an infected computer’s hard drive. The data wiping component used in the attack overwrote information on infected hard drives by repeating the words “hastati” or “principes,” depending on which version of the wiper malware was uploaded to the compromised host.

Both of those terms reference the military classes of ancient Rome: “hastati” were the younger, poorer soldiers typically on the front lines; the “principes” referred to more hardened, seasoned soldiers. According to a detailed white paper from McAfee, the attackers left a calling card a day after the attacks in the form of a web pop-up message claiming that the NewRomanic Cyber Army Team was responsible and had leaked private information from several banks and media companies and destroyed data on a large number of machines.

The message read:

“Hi, Dear Friends, We are very happy to inform you the following news. We, NewRomanic Cyber Army Team, verified our #OPFuckKorea2003. We have now a great deal of personal information in our hands. Those includes; 2.49M of [redacted by Mcafee] member table data, cms_info more than 50M from [redacted]. Much information from [redacted] Bank. We destroyed more than 0.18M of PCs. Many auth Hope you are lucky. 11th, 12th, 13th, 21st, 23rd and 27th HASTATI Detachment. Part of PRINCIPES Elements. p.s For more information, please visit www.dropbox.com login with joseph.r.ulatoski@gmail.com::lqaz@WSX3edc$RFV. Please also visit pastebin.com.”

The McAfee report, and a similarly in-depth report from HP Security, mentions that another group calling itself the Whois Team — which defaced a South Korean network provider during the attack — also took responsibility for the destructive Dark Seoul attacks in 2013. But both companies say they believe the NewRomanic Cyber Army Team and the Whois Team are essentially the same group. As Russian security firm Kaspersky notes, the images used by the WhoisTeam and the warning messages left for Sony are remarkably similar:

Interestingly, the attacks on Sony also were preceded by the theft of data that was later leaked on Pastebin and via Dropbox. But how long were the attackers in the Sony case inside Sony’s network before they began wiping drives? And how did they move tens of terabytes of data off of Sony’s network without notice? Those questions remain unanswered, but the McAfee paper holds a few possible clues.

A LENGTHY CAMPAIGN

McAfee posits that, based on the compile times of the backdoor malware used to upload the drive-wiping malware, the targets in the Dark Seoul attacks were likely compromised by a remote-access Trojan delivered by a spear-phishing campaign at least two months before the data destruction began. More importantly, McAfee concludes that the data-wiping and backdoor malware used in the Dark Seoul attack was but a small component of an elaborate cyber-espionage campaign that started in 2009 and targeted only South Korean assets.

“McAfee Labs has uncovered a sophisticated military spying network targeting South Korea that has been in operation since 2009. Our analysis shows this network is connected to the Dark Seoul incident. Furthermore, we have also determined that a single group has been behind a series of threats targeting South Korea since October 2009. In this case the adversary had designed a sophisticated encrypted network designed to gather intelligence on military networks.

We have confirmed cases of Trojans operating through these networks in 2009, 2010, 2011, and 2013. This network was designed to camouflage all communications between the infected systems and the control servers via the Microsoft Cryptography API using RSA 128-bit encryption. Everything extracted from these military networks would be transmitted over this encrypted network once the malware identified interesting information. What makes this case particularly interesting is the use of automated reconnaissance tools to identify what specific military information internal systems contained before the attackers tried to grab any of the files.”

The espionage malware was looking for files that contained specific terms that might indicate they harbored information about U.S. and Korean military cooperation, including “U.S. Army” and “Operation Key Resolve,” an annual military exercise held by U.S. forces and the South Korean military.

The Dark Seoul attacks were hardly an isolated incident. In 2011, the same  Korean bank that was attacked in the 2013 incident was also hit with denial-of-service attacks and destructive malware. On July 4, 2009, a wave of denial-of-service attacks washed over more than two dozen Korean and U.S. Government Web sites, including the White House and the Pentagon. July 4 is Independence Day in the United States, but it also happened to be the very day that North Korea launched seven short-range missiles into the Sea of Japan in a show of military might. By the time the third wave of that attack subsided on July 9, the assailants had pushed malware to tens of thousands of zombie computers used in the assault that wiped all data from the machines.

The co-founder of CrowdStrike, a security firm that focuses heavily on identifying attribution and actors behind major cybercrime attacks, said his firm has a “very high degree of confidence that the FBI is correct in” attributing the attack against Sony Pictures to North Korean hackers, and that CrowdStrike came to this conclusion independently long before the FBI came out with its announcement last week.

“We have a high-confidence that this is a North Korean operator based on the profiles seen dating back to 2006, including prior espionage against the South Korean and U.S. government and  military institutions,” said  Dmitri Alperovitch, chief technology officer and co-founder at CrowdStrike.

“These events are all connected, through both the infrastructure overlap and the malware analysis, and they are connected to the Sony attack,” Alperovitch said. “We haven’t seen the skeptics produce any evidence that it wasn’t North Korea, because there is pretty good technical attribution here. I want to know how many other hacking groups are so interested in things like Key Resolve.”

Security firms like HP refer to the North Korean hacking team as the “Hastati” group, but CrowdStrike calls them by a different nickname: “Silent Chollima.” A Chollima is a mythical winged horse which originates from the Chinese classics.

“North Korea is one of the few countries that doesn’t have a real animal as a national animal,” Alperovitch said. “Which, I think, tells you a lot about the country itself.”

The “silent” part of the moniker is a reference to the stubborn fact that little is known about the hackers themselves. Unlike hacker groups in other countries where it is common to find miscreants with multiple profiles on social networks and hacker forums that can be used to build a more complete profile of the attackers — the North Koreans heavily restrict the use of Internet communications, even for their cyber warriors.

“First of all, they don’t have a ton of Internet infrastructure in North Korea, and they don’t have forums and social media which typically helps you identify, for example, whether an attack is from Russians or the Chinese,” Alperovitch said. “In general, the North Korean regime is one of the hardest intelligence targets for the intelligence and cyber attribution communities.”

On Monday, the folks at Dyn Research — a company that tracks Internet connectivity issues around the globe — said its sensors noted that North Korea inexplicably went offline on Monday, Dec. 22, at around 16:15 UTC (01:15 UTC Tuesday in the North Korean capital of Pyongyang). But the researchers stopped short of attributing a reason behind the outage.

“Who caused this, and how?,” wrote Jim Cowie, chief scientist at Dyn. “A long pattern of up-and-down connectivity, followed by a total outage, seems consistent with a fragile network under external attack. But it’s also consistent with more common causes, such as power problems.”

Interestingly, this pattern of downtime also was witnessed directly following the above-described 2013 attacks that targeted South Korean banks and media firms. According to Jason Lancaster, a security researcher at HP, the entire North Korean Internet space suffered a similar outage around the same time as the 2013 offensive against South Korea.

“When they came back online, one of those four [North Korean Internet address blocks] was routing through an Intelsat satellite connection,” Lancaster said. “What caused the 2013 outage? They never determined the cause. The speculation was that they were under attack, but there was never any proof of that happening.”

Additional reading:

US-CERT analysis of the computer worm used in the attack on Sony.

TaoSecurity Blog: What Does ‘Responsibility’ Mean for Attribution?

McAfee report on Dark Seoul attacks (PDF)

HP Security: Profiling an Enigma – The Mystery of North Korea’s Cyber Threat Landscape (PDF)

In September 2014, I wrote about receiving a package of $500 in counterfeit U.S. currency from an unknown sender, after mentioning in a blog post about a rash of funny money resellers flooding underground cybercrime markets. Last week, U.S. authorities announced the arrest of a Texas man charged with leading the international counterfeit currency operation from a location in the Republic of Uganda.

U.S. prosecutors say 27-year-old Ryan Andrew Gustafson – a.k.a. “Jack Farrel” and “Willy Clock” — is a U.S. citizen currently residing in Kampala, Uganda. Gustafson was arrested on Dec. 16 by Ugandan authorities and charged with conspiracy, counterfeiting, and unlawful possession of ammunition.

The defendant and his alleged accomplices are suspected of passing approximately $270,000 in fake U.S. currency in Uganda. In total, Ugandan authorities say they seized some $1.8 million in funny money from Gustafson’s operation.

The U.S. Secret Service, which investigates currency counterfeiting, said the investigation began in December 2013 when agents were alerted to the passing of counterfeit notes at retail stores and businesses in the Pittsburgh area. A press release from the Justice Department outlines the rest of the investigation:

“Agents determined that an individual identified as J.G. had passed these notes and was renting a postal box at The UPS Store on Pittsburgh’s South Side.  On Feb 19, 2014, law enforcement learned that J.G. received three packages addressed from Beyond Computers, located in Kampala, Uganda.  Agents executing a search warrant on the packages found $7,000 in counterfeit $100, $50 and $20 FRNs located in two hidden compartments within the packaging envelopes.  A fingerprint on a document inside one of the packages was identified as belonging to Ryan Andrew Gustafson.”

“The Secret Service subsequently worked with Ugandan authorities to identify the source of the counterfeit [cash].  Their efforts led to A.B., who admitted to sending the packages, explaining that an American named “Jack Farrel,” and another person, provided him the counterfeit notes to ship.  Based on information provided by A.B., the Secret Service used facial recognition to identify Jack Farrel as Ryan Andrew Gustafson.”

The government says Gustafson sold the bills through the Tor Carding Forum, a cybercrime shop that is unreachable from the regular Internet. Rather, visiting the Tor Carding Forum requires the visitor to route his communications through Tor, a free software-based service that helps users maintain anonymity by obfuscating their true location online.

Willy Clock’s phony currency wasn’t only available via Tor. By the middle of 2014, ads for his funny money were showing up on regular, Internet-based cybercrime forums. One reseller of Willy Clock’s notes even set up his own sales thread on Reddit.

Once again, it appears that sloppy operational security contributed to an arrest of an alleged bad guy. According to the government’s complaint (PDF), the email address that Gustafson provided on his U.S. passport application was the same one he allegedly used to maintain a Facebook account under the Jack Farrel alias. Investigators found that Gustafson also used the same Internet address to access his real Facebook page and the Farrel account. Another Facebook page tied to the Jack Farrel identity says the accused was in Uganda as a project associate at the U.N. refugee shelter program.

An organized gang of hackers from Russia and Ukraine has broken into internal networks at dozens of financial institutions and installed malicious software that allowed the gang to drain bank ATMs of cash. While none of the victim institutions were in the United States or Western Europe, experts say the stealthy methods used by the attackers in these heists would likely work across a broad range of western banks.

Most cybercrime targets consumers and businesses, stealing account information such as passwords and other data that lets thieves cash out hijacked bank accounts, as well as credit and debit cards. But this gang specializes in hacking into banks directly, and then working out ingenious ways to funnel cash directly from the financial institution itself.

A number of the gang’s members are believed to be tied to a group of Eastern European hackers accused of stealing more than USD $2 million from Russian banks using a powerful, custom-made banking trojan known as Carberp. Eight men in Moscow were arrested in 2012 and accused of building and using Carberp, but sources say the core members of the gang were out of jail within hours after their arrest and have been busy rebuilding their crime machine ever since.

According to report released today by Fox-IT and Group-IB, security firms based in The Netherlands and Russia, respectively, the Carberp guys have since changed their tactics: Instead of stealing from thousands of bank account holders, this gang has decided to focus on siphoning funds right out of banks’ coffers. So far, the security firms report, the gang has stolen more than $15 million from Eastern European banks.

To gain a foothold inside financial institutions, this crime group — dubbed the “Anunak group” — sent bank employees targeted, malware-laced emails made to look like the missives were sent by Russian banking regulators. The phishing emails contained malicious software designed to exploit recently-patched security holes in Microsoft Office products.

Incredibly, the group also reportedly bought access to Windows PCs at targeted banks that were already compromised by opportunistic malware spread by other cyber criminals. Indeed, Fox-IT and Group-IB report that the Anunak gang routinely purchased installations of their banking malware from other cybercriminals who operated massive botnets (collections of hacked PCs).

Once inside a financial institution, the criminals typically abused that access to launch even more convincing spear-phishing attacks against other banks. They also gained access to isolated bank network segments that handled ATM transactions, downloading malicious programs made to work specifically with Wincor ATMs. The hackers used that malware — along with a modified legitimate program for managing ATM cash trays — to change the denomination settings for bank notes in 52 different ATMs.

As a result, they were able to make it so that when co-conspirators went to affected ATMs to withdraw 10 bills totaling 100 Russian rubles, they were instead issued 10 bank notes with the denomination of 5,000 rubles, the report notes.

It was bad enough that this group is believed to have hacked into more than 50 Russian banks, but nasty messages encoded into the malware tools employed by the thieves suggest they hold utter contempt for their targets. One malware component the group used to infect targeted systems carried inside of itself the text string “LOL BANK FUCKIUNG”. Another strain of malware deployed by this group’s targeted email campaigns and used to build their own botnet of more than a quarter-million PCs was encrypted with a key that is the MD5 hash of the string “go fuck yourself.”

While they appear to have developed a penchant for stealing directly from banks, these crooks aren’t above going after easy money: Sources tell KrebsOnSecurity that this group of hackers is thought to be the same criminal gang responsible for several credit and debit card breaches at major retailers across the United States, including women’s clothier Bebe Stores Inc., western wear store Sheplers, and office supply store Staples Inc.

A separate source previously told this author that there was a connection between the point-of-sale malware used in the breach at Michaels and the Staples incident, which means this group may also have been involved in the Michaels breach. In any case, Group-IB and Fox-IT note that the Anunak gang has hit a total of 16 retailers so far.

The attacks from Anunak showcase once again how important it is for organizations to refocus more resources away from preventing intrusions toward detecting intrusions as quickly as possible and stopping the bleeding. According to the report, the average time from the moment this group breaks into bank internal networks and the successful theft of cash is a whopping 42 days.

The full report on the Anunak group is available here (PDF).

Office supply chain Staples Inc. today finally acknowledged that a malware intrusion this year at some of its stores resulted in a credit card breach. The company now says some 119 stores were impacted between April and September 2014, and that as many as 1.16 million customer credit and debit cards may have been stolen as a result.

KrebsOnSecurity first reported the suspected breach on Oct. 20, 2014, after hearing from multiple banks that had identified a pattern of credit and debit card fraud suggesting that several Staples office supply locations in the Northeastern United States were dealing with a data breach. At the time, Staples would say only that it was investigating “a potential issue” and had contacted law enforcement.

In a statement issued today, Staples released a list of stores (PDF) hit with the card-stealing malware, and the stores are not limited to the Northeastern United States.

“At 113 stores, the malware may have allowed access to this data for purchases made from August 10, 2014 through September 16, 2014,” Staples disclosed. “At two stores, the malware may have allowed access to data from purchases made from July 20, 2014 through September 16, 2014.”

However, the company did say that during the investigation Staples also received reports of fraudulent payment card use related to four stores in Manhattan, New York at various times from April through September 2014.

Aviv Raff, chief technology officer at Seculert, said the per-store minimum time to detect and respond to the breach was an average of 40 days.

“Once again, much like previous breaches, the statistics of the Staples’ breach shows the necessity of moving from trying to prevent an attack to try and detect and respond as quickly as possible,” Raff said.

It appears that the attackers responsible for the Staples break-in are not the same group thought to have hit Target and Home Depot. In November, I posted a story that cited sources close to the Staples investigation saying the breach at Staples impacted roughly 100 stores and was powered by some of the same criminal infrastructure seen in the intrusion disclosed earlier this year at Michaels craft stores.

The FBI today said it has determined that the North Korean government is responsible for the devastating recent hack attack against Sony Pictures Entertainment. Here’s a brief look the FBI’s statement, what experts are learning about North Korea’s cyberattack capabilities, and what this incident means for other corporations going forward.

In a statement released early Friday afternoon, the FBI said that its investigation — along with information shared by Sony and other U.S. government departments and agencies — found that the North Korean government was responsible.

The FBI said it couldn’t disclose all of its sources and methods, but that the conclusion was based, in part, on the following:

-“Technical analysis of the data deletion malware used in this attack revealed links to other malware that the FBI knows North Korean actors previously developed. For example, there were similarities in specific lines of code, encryption algorithms, data deletion methods, and compromised networks.”

-“The FBI also observed significant overlap between the infrastructure used in this attack and other malicious cyber activity the U.S. government has previously linked directly to North Korea. For example, the FBI discovered that several Internet protocol (IP) addresses associated with known North Korean infrastructure communicated with IP addresses that were hardcoded into the data deletion malware used in this attack.”

-“Separately, the tools used in the SPE attack have similarities to a cyber attack in March of last year against South Korean banks and media outlets, which was carried out by North Korea.”

The agency added that it was “deeply concerned” about the destructive nature of this attack on a private sector entity and the ordinary citizens who work there, and that the FBI stands ready to assist any U.S. company that is the victim of a destructive cyber attack or breach of confidential information.

“Further, North Korea’s attack on SPE reaffirms that cyber threats pose one of the gravest national security dangers to the United States,” the FBI said. “Though the FBI has seen a wide variety and increasing number of cyber intrusions, the destructive nature of this attack, coupled with its coercive nature, sets it apart. North Korea’s actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior. The FBI takes seriously any attempt—whether through cyber-enabled means, threats of violence, or otherwise—to undermine the economic and social prosperity of our citizens.”

SPE was hit with a strain of malware designed to wipe all computer hard drives within the company’s network. The attackers then began releasing huge troves of sensitive SPE internal documents, and, more recently, started threatening physical violence against anyone who viewed the Sony movie “The Interview,” a comedy that involves a plot to assassinate North Korean leader Kim Jong Un. Not long after a number of top movie theater chains said they would not show the film, Sony announced that it would cancel the movie’s theatrical release.

Apparently emboldened by Sony’s capitulation, the attackers are now making even more demands. According to CNN, Sony executives on Thursday received an email apparently from the attackers said they would no longer release additional stolen Sony Pictures data if the company announced that it would also cancel any plans to release the movie on DVD, Netflix or elsewhere. The attackers also reportedly demanded that any teasers and trailers about The Interview online be removed from the Internet.

A ‘MAGIC WEAPON’

Little is publicly known about North Korea’s cyber warfare and hacking capabilities, but experts say North Korean leaders view cyber warfare capabilities as an important asymmetric asset in the face of its perceived enemies — the United States and South Korea. An in-depth report (PDF) released earlier this year by HP Security Research notes that in November 2013, North Korea’s “dear leader” Kim Jong Un referred to cyber warfare capabilities as a “magic weapon” in conjunction with nuclear weapons and missiles.

“Although North Korea’s limited online presence makes a thorough analysis of their cyber warfare capabilities a difficult task, it must be noted that what is known of those capabilities closely mirrors their kinetic warfare tactics,” HP notes. “Cyber warfare is simply the modern chapter in North Korea’s long history of asymmetrical warfare. North Korea has used various unconventional tactics in the past, such as guerilla warfare, strategic use of terrain, and psychological operations. The regime also aspires to create viable nuclear weapons.”

Sources familiar with the investigation tell KrebsOnSecurity that the investigators believe there may have been as many as several dozen individuals involved in the attack, the bulk of whom hail from North Korea. Nearly a dozen of them are believed to reside in Japan.

According to HP, a group of ethnic North Koreans residing in Japan known as the Chongryon are critical to North Korea’s cyber and intelligence programs, and help generate hard currency for the regime. The report quotes Japanese intelligence officials stating that “the Chongryon are vital to North Korea’s military budget, raising funds via weapons trafficking, drug trafficking, and other black market activities.” HP today published much more detail about specific North Korean hacking groups that may have played a key role in the Sony incident given previous such attacks.

While the United States government seems convinced by technical analysis and intelligence sources that the North Koreans were behind the attack, skeptics could be forgiven for having doubts about this conclusion. It is interesting to note that the attackers initially made no mention of The Interview, and instead demanded payment from Sony to forestall the release of sensitive corporate data. It wasn’t until well after the news media pounced on the idea that the attack was in apparent retribution for The Interview that we saw the attackers begin to mention the Sony movie.

In any case, it’s unlikely that U.S. officials relish the conclusion that North Korea is the aggressor in this attack, because it forces the government to respond in some way and few of the options are particularly palatable. The top story on the front page of the The Wall Street Journal today is an examination of what the U.S. response to this incident might look like, and it seems that few of the options on the table are appealing to policymakers and intelligence agencies alike.

The WSJ story notes that North Korea’s only connections to the Internet run through China, but that pressuring China to sever or severely restrict those connections is unlikely to work.

Likewise, engaging in a counter-attack could prove fruitless, or even backfire, the Journal observed, “in part because the U.S. is able to spy on North Korea by maintaining a foothold on some of its computer systems. A retaliatory cyberstrike could wind up damaging Washington’s ability to spy on Pyongyang…Another former U.S. official said policy makers remain squeamish about deploying cyberweapons against foreign targets.”

IMPLICATIONS FOR US FIRMS

If this incident isn’t a giant wake-up call for U.S. corporations to get serious about cybersecurity, I don’t know what is. I’ve done more than two dozen speaking engagements around the world this year, and one point I always try to drive home is that far too few organizations recognize how much they have riding on their technology and IT operations until it is too late. The message is that if the security breaks down, the technology stops working — and if that happens the business can quickly grind to a halt. But you would be hard-pressed to witness signs that most organizations have heard and internalized that message, based on their investments in cybersecurity relative to their overall reliance on it.

A critical step that many organizations fail to take is keeping a basic but comprehensive and ongoing inventory of all the organization’s IT assets. Identifying where the most sensitive and mission-critical data resides (identifying the organization’s “crown jewels”) is another essential exercise, but too many organizations fail to take the critical step of encrypting this vital information.

Over the past several years, we’ve seen a remarkable shift toward more destructive attacks. Most organizations are accustomed to tackling malware infestations within their IT environments, but few are prepared to handle fast-moving threats designed to completely wipe data from storage drives across the network.

As I note in my book Spam Nation, miscreants who were once content to steal banking information and blast out unsolicited commercial email increasingly are using their skills to hold data for ransom using malware tools such as ransomware. I’m afraid that as these attackers become better at situational awareness — that is, gaining a better understanding of who their victims are and the value of the assets the intruders have under their control — these attacks and ransom demands will become more aggressive and costly in the months ahead.