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A new data leak that appears to have come from one of China’s top private cybersecurity firms provides a rare glimpse into the commercial side of China’s many state-sponsored hacking groups. Experts say the leak illustrates how Chinese government agencies increasingly are contracting out foreign espionage campaigns to the nation’s burgeoning and highly competitive cybersecurity industry.
A marketing slide deck promoting i-SOON’s Advanced Persistent Threat (APT) capabilities.
A large cache of more than 500 documents published to GitHub last week indicate the records come from i-SOON, a technology company headquartered in Shanghai that is perhaps best known for providing cybersecurity training courses throughout China. But the leaked documents, which include candid employee chat conversations and images, show a less public side of i-SOON, one that frequently initiates and sustains cyberespionage campaigns commissioned by various Chinese government agencies.
The leaked documents suggest i-SOON employees were responsible for a raft of cyber intrusions over many years, infiltrating government systems in the United Kingdom and countries throughout Asia. Although the cache does not include raw data stolen from cyber espionage targets, it features numerous documents listing the level of access gained and the types of data exposed in each intrusion.
Security experts who reviewed the leaked data say they believe the information is legitimate, and that i-SOON works closely with China’s Ministry of Public Security and the military. In 2021, the Sichuan provincial government named i-SOON as one of “the top 30 information security companies.”
“The leak provides some of the most concrete details seen publicly to date, revealing the maturing nature of China’s cyber espionage ecosystem,” said Dakota Cary, a China-focused consultant at the security firm SentinelOne. “It shows explicitly how government targeting requirements drive a competitive marketplace of independent contractor hackers-for-hire.”
Mei Danowski is a former intelligence analyst and China expert who now writes about her research in a Substack publication called Natto Thoughts. Danowski said i-SOON has achieved the highest secrecy classification that a non-state-owned company can receive, which qualifies the company to conduct classified research and development related to state security.
i-SOON’s “business services” webpage states that the company’s offerings include public security, anti-fraud, blockchain forensics, enterprise security solutions, and training. Danowski said that in 2013, i-SOON established a department for research on developing new APT network penetration methods.
APT stands for Advanced Persistent Threat, a term that generally refers to state-sponsored hacking groups. Indeed, among the documents apparently leaked from i-SOON is a sales pitch slide boldly highlighting the hacking prowess of the company’s “APT research team” (see screenshot above).
i-SOON CEO Wu Haibo, in 2011. Image: nattothoughts.substack.com.
The leaked documents included a lengthy chat conversation between the company’s founders, who repeatedly discuss flagging sales and the need to secure more employees and government contracts. Danowski said the CEO of i-SOON, Wu Haibo (“Shutdown” in the leaked chats) is a well-known first-generation red hacker or “Honker,” and an early member of Green Army — the very first Chinese hacktivist group founded in 1997. Mr. Haibo has not yet responded to a request for comment.
In October 2023, Danowski detailed how i-SOON became embroiled in a software development contract dispute when it was sued by a competing Chinese cybersecurity company called Chengdu 404. In September 2020, the U.S. Department of Justice unsealed indictments against multiple Chengdu 404 employees, charging that the company was a facade that hid more than a decade’s worth of cyber intrusions attributed to a threat actor group known as “APT 41.”
Danowski said the existence of this legal dispute suggests that Chengdu 404 and i-SOON have or at one time had a business relationship, and that one company likely served as a subcontractor to the other.
“From what they chat about we can see this is a very competitive industry, where companies in this space are constantly poaching each others’ employees and tools,” Danowski said. “The infosec industry is always trying to distinguish [the work] of one APT group from another. But that’s getting harder to do.”
It remains unclear if i-SOON’s work has earned it a unique APT designation. But Will Thomas, a cyber threat intelligence researcher at Equinix, found an Internet address in the leaked data that corresponds to a domain flagged in a 2019 Citizen Lab report about one-click mobile phone exploits that were being used to target groups in Tibet. The 2019 report referred to the threat actor behind those attacks as an APT group called Poison Carp.
Several images and chat records in the data leak suggest i-SOON’s clients periodically gave the company a list of targets they wanted to infiltrate, but sometimes employees confused the instructions. One screenshot shows a conversation in which an employee tells his boss they’ve just hacked one of the universities on their latest list, only to be told that the victim in question was not actually listed as a desired target.
The leaked chats show i-SOON continuously tried to recruit new talent by hosting a series of hacking competitions across China. It also performed charity work, and sought to engage employees and sustain morale with various team-building events.
However, the chats include multiple conversations between employees commiserating over long hours and low pay. The overall tone of the discussions indicates employee morale was quite low and that the workplace environment was fairly toxic. In several of the conversations, i-SOON employees openly discuss with their bosses how much money they just lost gambling online with their mobile phones while at work.
Danowski believes the i-SOON data was probably leaked by one of those disgruntled employees.
“This was released the first working day after the Chinese New Year,” Danowski said. “Definitely whoever did this planned it, because you can’t get all this information all at once.”
SentinelOne’s Cary said he came to the same conclusion, noting that the Protonmail account tied to the GitHub profile that published the records was registered a month before the leak, on January 15, 2024.
China’s much vaunted Great Firewall not only lets the government control and limit what citizens can access online, but this distributed spying apparatus allows authorities to block data on Chinese citizens and companies from ever leaving the country.
As a result, China enjoys a remarkable information asymmetry vis-a-vis virtually all other industrialized nations. Which is why this apparent data leak from i-SOON is such a rare find for Western security researchers.
“I was so excited to see this,” Cary said. “Every day I hope for data leaks coming out of China.”
That information asymmetry is at the heart of the Chinese government’s cyberwarfare goals, according to a 2023 analysis by Margin Research performed on behalf of the Defense Advanced Research Projects Agency (DARPA).
“In the area of cyberwarfare, the western governments see cyberspace as a ‘fifth domain’ of warfare,” the Margin study observed. “The Chinese, however, look at cyberspace in the broader context of information space. The ultimate objective is, not ‘control’ of cyberspace, but control of information, a vision that dominates China’s cyber operations.”
The National Cybersecurity Strategy issued by the White House last year singles out China as the biggest cyber threat to U.S. interests. While the United States government does contract certain aspects of its cyber operations to companies in the private sector, it does not follow China’s example in promoting the wholesale theft of state and corporate secrets for the commercial benefit of its own private industries.
Dave Aitel, a co-author of the Margin Research report and former computer scientist at the U.S. National Security Agency, said it’s nice to see that Chinese cybersecurity firms have to deal with all of the same contracting headaches facing U.S. companies seeking work with the federal government.
“This leak just shows there’s layers of contractors all the way down,” Aitel said. “It’s pretty fun to see the Chinese version of it.”
The Minnesota-based Internet provider U.S. Internet Corp. has a business unit called Securence, which specializes in providing filtered, secure email services to businesses, educational institutions and government agencies worldwide. But until it was notified last week, U.S. Internet was publishing more than a decade’s worth of its internal email — and that of thousands of Securence clients — in plain text out on the Internet and just a click away for anyone with a Web browser.
Headquartered in Minnetonka, Minn., U.S. Internet is a regional ISP that provides fiber and wireless Internet service. The ISP’s Securence division bills itself “a leading provider of email filtering and management software that includes email protection and security services for small business, enterprise, educational and government institutions worldwide.”
U.S. Internet/Securence says your email is secure. Nothing could be further from the truth.
Roughly a week ago, KrebsOnSecurity was contacted by Hold Security, a Milwaukee-based cybersecurity firm. Hold Security founder Alex Holden said his researchers had unearthed a public link to a U.S. Internet email server listing more than 6,500 domain names, each with its own clickable link.
A tiny portion of the more than 6,500 customers who trusted U.S. Internet with their email.
Drilling down into those individual domain links revealed inboxes for each employee or user of these exposed host names. Some of the emails dated back to 2008; others were as recent as the present day.
Securence counts among its customers dozens of state and local governments, including: nc.gov — the official website of North Carolina; stillwatermn.gov, the website for the city of Stillwater, Minn.; and cityoffrederickmd.gov, the website for the government of Frederick, Md.
Incredibly, included in this giant index of U.S. Internet customer emails were the internal messages for every current and former employee of U.S. Internet and its subsidiary USI Wireless. Since that index also included the messages of U.S. Internet’s CEO Travis Carter, KrebsOnSecurity forwarded one of Mr. Carter’s own recent emails to him, along with a request to understand how exactly the company managed to screw things up so spectacularly.
Individual inboxes of U.S. Wireless employees were published in clear text on the Internet.
Within minutes of that notification, U.S. Internet pulled all of the published inboxes offline. Mr. Carter responded and said his team was investigating how it happened. In the same breath, the CEO asked if KrebsOnSecurity does security consulting for hire (I do not).
[Author’s note: Perhaps Mr. Carter was frantically casting about for any expertise he could find in a tough moment. But I found the request personally offensive, because I couldn’t shake the notion that maybe the company was hoping it could buy my silence.]
Earlier this week, Mr. Carter replied with a highly technical explanation that ultimately did little to explain why or how so many internal and customer inboxes were published in plain text on the Internet.
“The feedback from my team was a issue with the Ansible playbook that controls the Nginx configuration for our IMAP servers,” Carter said, noting that this incorrect configuration was put in place by a former employee and never caught. U.S. Internet has not shared how long these messages were exposed.
“The rest of the platform and other backend services are being audited to verify the Ansible playbooks are correct,” Carter said.
Holden said he also discovered that hackers have been abusing a Securence link scrubbing and anti-spam service called Url-Shield to create links that look benign but instead redirect visitors to hacked and malicious websites.
“The bad guys modify the malicious link reporting into redirects to their own malicious sites,” Holden said. “That’s how the bad guys drive traffic to their sites and increase search engine rankings.”
For example, clicking the Securence link shown in the screenshot directly above leads one to a website that tries to trick visitors into allowing site notifications by couching the request as a CAPTCHA request designed to separate humans from bots. After approving the deceptive CAPTCHA/notification request, the link forwards the visitor to a Russian internationalized domain name (рпроаг[.]рф).
The link to this malicious and deceptive website was created using Securence’s link-scrubbing service. Notification pop-ups were blocked when this site tried to disguise a prompt for accepting notifications as a form of CAPTCHA.
U.S. Internet has not responded to questions about how long it has been exposing all of its internal and customer emails, or when the errant configuration changes were made. The company also still has not disclosed the incident on its website. The last press release on the site dates back to March 2020.
KrebsOnSecurity has been writing about data breaches for nearly two decades, but this one easily takes the cake in terms of the level of incompetence needed to make such a huge mistake unnoticed. I’m not sure what the proper response from authorities or regulators should be to this incident, but it’s clear that U.S. Internet should not be allowed to manage anyone’s email unless and until it can demonstrate more transparency, and prove that it has radically revamped its security.
Three Americans were charged this week with stealing more than $400 million in a November 2022 SIM-swapping attack. The U.S. government did not name the victim organization, but there is every indication that the money was stolen from the now-defunct cryptocurrency exchange FTX, which had just filed for bankruptcy on that same day.
A graphic illustrating the flow of more than $400 million in cryptocurrencies stolen from FTX on Nov. 11-12, 2022. Image: Elliptic.co.
An indictment unsealed this week and first reported on by Ars Technica alleges that Chicago man Robert Powell, a.k.a. “R,” “R$” and “ElSwapo1,” was the ringleader of a SIM-swapping group called the “Powell SIM Swapping Crew.” Colorado resident Emily “Em” Hernandez allegedly helped the group gain access to victim devices in service of SIM-swapping attacks between March 2021 and April 2023. Indiana resident Carter Rohn, a.k.a. “Carti,” and “Punslayer,” allegedly assisted in compromising devices.
In a SIM-swapping attack, the crooks transfer the target’s phone number to a device they control, allowing them to intercept any text messages or phone calls sent to the victim, including one-time passcodes for authentication or password reset links sent via SMS.
The indictment states that the perpetrators in this heist stole the $400 million in cryptocurrencies on Nov. 11, 2022 after they SIM-swapped an AT&T customer by impersonating them at a retail store using a fake ID. However, the document refers to the victim in this case only by the name “Victim 1.”
Wired’s Andy Greenberg recently wrote about FTX’s all-night race to stop a $1 billion crypto heist that occurred on the evening of November 11:
“FTX’s staff had already endured one of the worst days in the company’s short life. What had recently been one of the world’s top cryptocurrency exchanges, valued at $32 billion only 10 months earlier, had just declared bankruptcy. Executives had, after an extended struggle, persuaded the company’s CEO, Sam Bankman-Fried, to hand over the reins to John Ray III, a new chief executive now tasked with shepherding the company through a nightmarish thicket of debts, many of which it seemed to have no means to pay.”
“FTX had, it seemed, hit rock bottom. Until someone—a thief or thieves who have yet to be identified—chose that particular moment to make things far worse. That Friday evening, exhausted FTX staffers began to see mysterious outflows of the company’s cryptocurrency, publicly captured on the Etherscan website that tracks the Ethereum blockchain, representing hundreds of millions of dollars worth of crypto being stolen in real time.”
The indictment says the $400 million was stolen over several hours between November 11 and 12, 2022. Tom Robinson, co-founder of the blockchain intelligence firm Elliptic, said the attackers in the FTX heist began to drain FTX wallets on the evening of Nov. 11, 2022 local time, and continuing until the 12th of November.
Robinson said Elliptic is not aware of any other crypto heists of that magnitude occurring on that date.
“We put the value of the cryptoassets stolen at $477 million,” Robinson said. “The FTX administrators have reported overall losses due to “unauthorized third-party transfers” of $413 million – the discrepancy is likely due to subsequent seizure and return of some of the stolen assets. Either way, it’s certainly over $400 million, and we are not aware of any other thefts from crypto exchanges on this scale, on this date.”
The SIM-swappers allegedly responsible for the $400 million crypto theft are all U.S. residents. But there are some indications they had help from organized cybercriminals based in Russia. In October 2023, Elliptic released a report that found the money stolen from FTX had been laundered through exchanges with ties to criminal groups based in Russia.
“A Russia-linked actor seems a stronger possibility,” Elliptic wrote. “Of the stolen assets that can be traced through ChipMixer, significant amounts are combined with funds from Russia-linked criminal groups, including ransomware gangs and darknet markets, before being sent to exchanges. This points to the involvement of a broker or other intermediary with a nexus in Russia.”
Nick Bax, director of analytics at the cryptocurrency wallet recovery firm Unciphered, said the flow of stolen FTX funds looks more like what his team has seen from groups based in Eastern Europe and Russian than anything they’ve witnessed from US-based SIM-swappers.
“I was a bit surprised by this development but it seems to be consistent with reports from CISA [the Cybersecurity and Infrastructure Security Agency] and others that “Scattered Spider” has worked with [ransomware] groups like ALPHV/BlackCat,” Bax said.
CISA’s alert on Scattered Spider says they are a cybercriminal group that targets large companies and their contracted information technology (IT) help desks.
“Scattered Spider threat actors, per trusted third parties, have typically engaged in data theft for extortion and have also been known to utilize BlackCat/ALPHV ransomware alongside their usual TTPs,” CISA said, referring to the group’s signature “Tactics, Techniques an Procedures.”
Nick Bax, posting on Twitter/X in Nov 2022 about his research on the $400 million FTX heist.
Earlier this week, KrebsOnSecurity published a story noting that a Florida man recently charged with being part of a SIM-swapping conspiracy is thought to be a key member of Scattered Spider, a hacking group also known as 0ktapus. That group has been blamed for a string of cyber intrusions at major U.S. technology companies during the summer of 2022.
Financial claims involving FTX’s bankruptcy proceedings are being handled by the financial and risk consulting giant Kroll. In August 2023, Kroll suffered its own breach after a Kroll employee was SIM-swapped. According to Kroll, the thieves stole user information for multiple cryptocurrency platforms that rely on Kroll services to handle bankruptcy proceedings.
KrebsOnSecurity sought comment for this story from Kroll, the FBI, the prosecuting attorneys, and Sullivan & Cromwell, the law firm handling the FTX bankruptcy. This story will be updated in the event any of them respond.
Attorneys for Mr. Powell said they do not know who Victim 1 is in the indictment, as the government hasn’t shared that information yet. Powell’s next court date is a detention hearing on Feb. 2, 2024.
Update, Feb. 3, 12:19 p.m. ET: The FBI declined a request to comment.
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