Russian FSB Counterintelligence Chief Gets 9 Years in Cybercrime Bribery Scheme

The head of counterintelligence for a division of the Russian Federal Security Service (FSB) was sentenced last week to nine years in a penal colony for accepting a USD $1.7 million bribe to ignore the activities of a prolific Russian cybercrime group that hacked thousands of e-commerce websites. The protection scheme was exposed in 2022 when Russian authorities arrested six members of the group, which sold millions of stolen payment cards at flashy online shops like Trump’s Dumps.

As reported by The Record, a Russian court last week sentenced former FSB officer Grigory Tsaregorodtsev for taking a $1.7 million bribe from a cybercriminal group that was seeking a “roof,” a well-placed, corrupt law enforcement official who could be counted on to both disregard their illegal hacking activities and run interference with authorities in the event of their arrest.

Tsaregorodtsev was head of the counterintelligence department for a division of the FSB based in Perm, Russia. In February 2022, Russian authorities arrested six men in the Perm region accused of selling stolen payment card data. They also seized multiple carding shops run by the gang, including Ferum Shop, Sky-Fraud, and Trump’s Dumps, a popular fraud store that invoked the 45th president’s likeness and promised to “make credit card fraud great again.”

All of the domains seized in that raid were registered by an IT consulting company in Perm called Get-net LLC, which was owned in part by Artem Zaitsev — one of the six men arrested. Zaitsev reportedly was a well-known programmer whose company supplied services and leasing to the local FSB field office.

Russian news sites report that Internal Affairs officials with the FSB grew suspicious when Tsaregorodtsev became a little too interested in the case following the hacking group’s arrests. The former FSB agent had reportedly assured the hackers he could have their case transferred and that they would soon be free.

But when that promised freedom didn’t materialize, four the of the defendants pulled the walls down on the scheme and brought down their own roof. The FSB arrested Tsaregorodtsev, and seized $154,000 in cash, 100 gold bars, real estate and expensive cars.

At Tsaregorodtsev’s trial, his lawyers argued that their client wasn’t guilty of bribery per se, but that he did admit to fraud because he was ultimately unable to fully perform the services for which he’d been hired.

The Russian news outlet Kommersant reports that all four of those who cooperated were released with probation or correctional labor. Zaitsev received a sentence of 3.5 years in prison, and defendant Alexander Kovalev got four years.

In 2017, KrebsOnSecurity profiled Trump’s Dumps, and found the contact address listed on the site was tied to an email address used to register more than a dozen domains that were made to look like legitimate Javascript calls many e-commerce sites routinely make to process transactions — such as “js-link[dot]su,” “js-stat[dot]su,” and “js-mod[dot]su.”

Searching on those malicious domains revealed a 2016 report from RiskIQ, which shows the domains featured prominently in a series of hacking campaigns against e-commerce websites. According to RiskIQ, the attacks targeted online stores running outdated and unpatched versions of shopping cart software from Magento, Powerfront and OpenCart.

Those shopping cart flaws allowed the crooks to install “web skimmers,” malicious Javascript used to steal credit card details and other information from payment forms on the checkout pages of vulnerable e-commerce sites. The stolen customer payment card details were then sold on sites like Trump’s Dumps and Sky-Fraud.

Fake Lawsuit Threat Exposes Privnote Phishing Sites

A cybercrook who has been setting up websites that mimic the self-destructing message service privnote.com accidentally exposed the breadth of their operations recently when they threatened to sue a software company. The disclosure revealed a profitable network of phishing sites that behave and look like the real Privnote, except that any messages containing cryptocurrency addresses will be automatically altered to include a different payment address controlled by the scammers.

Launched in 2008, privnote.com employs technology that encrypts each message so that even Privnote itself cannot read its contents. And it doesn’t send or receive messages. Creating a message merely generates a link. When that link is clicked or visited, the service warns that the message will be gone forever after it is read.

Privnote’s ease-of-use and popularity among cryptocurrency enthusiasts has made it a perennial target of phishers, who erect Privnote clones that function more or less as advertised but also quietly inject their own cryptocurrency payment addresses when a note is created that contains crypto wallets.

Last month, a new user on GitHub named fory66399 lodged a complaint on the “issues” page for MetaMask, a software cryptocurrency wallet used to interact with the Ethereum blockchain. Fory66399 insisted that their website — privnote[.]co — was being wrongly flagged by MetaMask’s “eth-phishing-detect” list as malicious.

“We filed a lawsuit with a lawyer for dishonestly adding a site to the block list, damaging reputation, as well as ignoring the moderation department and ignoring answers!” fory66399 threatened. “Provide evidence or I will demand compensation!”

MetaMask’s lead product manager Taylor Monahan replied by posting several screenshots of privnote[.]co showing the site did indeed swap out any cryptocurrency addresses.

After being told where they could send a copy of their lawsuit, Fory66399 appeared to become flustered, and proceeded to mention a number of other interesting domain names:

You sent me screenshots from some other site! It’s red!!!!
The tornote.io website has a different color altogether
The privatenote,io website also has a different color! What’s wrong?????

A search at DomainTools.com for privatenote[.]io shows it has been registered to two names over as many years, including Andrey Sokol from Moscow and Alexandr Ermakov from Kiev. There is no indication these are the real names of the phishers, but the names are useful in pointing to other sites targeting Privnote since 2020.

DomainTools says other domains registered to Alexandr Ermakov include pirvnota[.]com, privatemessage[.]net, privatenote[.]io, and tornote[.]io.

The registration records for pirvnota[.]com at one point were updated from Andrey Sokol to “BPW” as the registrant organization, and “Tambov district” in the registrant state/province field. Searching DomainTools for domains that include both of these terms reveals pirwnote[.]com.

Other Privnote phishing domains that also phoned home to the same Internet address as pirwnote[.]com include privnode[.]com, privnate[.]com, and prevnóte[.]com. Pirwnote[.]com is currently selling security cameras made by the Chinese manufacturer Hikvision, via an Internet address based in Hong Kong.

It appears someone has gone to great lengths to make tornote[.]io seem like a legitimate website. For example, this account at Medium has authored more than a dozen blog posts in the past year singing the praises of Tornote as a secure, self-destructing messaging service. However, testing shows tornote[.]io will also replace any cryptocurrency addresses in messages with their own payment address.

These malicious note sites attract visitors by gaming search engine results to make the phishing domains appear prominently in search results for “privnote.” A search in Google for “privnote” currently returns tornote[.]io as the fifth result. Like other phishing sites tied to this network, Tornote will use the same cryptocurrency addresses for roughly 5 days, and then rotate in new payment addresses.

Throughout 2023, Tornote was hosted with the Russian provider DDoS-Guard, at the Internet address 186.2.163[.]216. A review of the passive DNS records tied to this address shows that apart from subdomains dedicated to tornote[.]io, the main other domain at this address was hkleaks[.]ml.

In August 2019, a slew of websites and social media channels dubbed “HKLEAKS” began doxing the identities and personal information of pro-democracy activists in Hong Kong. According to a report (PDF) from Citizen Lab, hkleaks[.]ml was the second domain that appeared as the perpetrators began to expand the list of those doxed.

DomainTools shows there are more than 1,000 other domains whose registration records include the organization name “BPW” and “Tambov District” as the location. Virtually all of those domains were registered through one of two registrars — Hong Kong-based Nicenic and Singapore-based WebCC — and almost all appear to be phishing or pill-spam related.

Among those is rustraitor[.]info, a website erected after Russia invaded Ukraine in early 2022 that doxed Russians perceived to have helped the Ukrainian cause.

In keeping with the overall theme, these phishing domains appear focused on stealing usernames and passwords to some of the cybercrime underground’s busiest shops, including Brian’s Club. What do all the phished sites have in common? They all accept payment via virtual currencies.

It appears MetaMask’s Monahan made the correct decision in forcing these phishers to tip their hand: Among the websites at that DDoS-Guard address are multiple MetaMask phishing domains, including metarrnask[.]com, meternask[.]com, and rnetamask[.]com.

How profitable are these private note phishing sites? Reviewing the four malicious cryptocurrency payment addresses that the attackers swapped into notes passed through privnote[.]co (as pictured in Monahan’s screenshot above) shows that between March 15 and March 19, 2024, those address raked in and transferred out nearly $18,000 in cryptocurrencies. And that’s just one of their phishing websites.

U.S. Internet Leaked Years of Internal, Customer Emails

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.”

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.

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.

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).

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.

Meet Ika & Sal: The Bulletproof Hosting Duo from Hell

In 2020, the United States brought charges against four men accused of building a bulletproof hosting empire that once dominated the Russian cybercrime industry and supported multiple organized cybercrime groups. All four pleaded guilty to conspiracy and racketeering charges. But there is a fascinating and untold backstory behind the two Russian men involved, who co-ran the world’s top spam forum and worked closely with Russia’s most dangerous cybercriminals.

From January 2005 to April 2013, there were two primary administrators of the cybercrime forum Spamdot (a.k.a Spamit), an invite-only community for Russian-speaking people in the businesses of sending spam and building botnets of infected computers to relay said spam. The Spamdot admins went by the nicknames Icamis (a.k.a. Ika), and Salomon (a.k.a. Sal).

As detailed in my 2014 book, Spam Nation, Spamdot was home to crooks controlling some of the world’s nastiest botnets, global malware contagions that went by exotic names like Rustock, Cutwail, Mega-D, Festi, Waledac, and Grum.

Icamis and Sal were in daily communications with these botmasters, via the Spamdot forum and private messages. Collectively in control over millions of spam-spewing zombies, those botmasters also continuously harvested passwords and other data from infected machines.

As we’ll see in a moment, Salomon is now behind bars, in part because he helped to rob dozens of small businesses in the United States using some of those same harvested passwords. He is currently housed in a federal prison in Michigan, serving the final stretch of a 60-month sentence.

But the identity and whereabouts of Icamis have remained a mystery to this author until recently. For years, security experts — and indeed, many top cybercriminals in the Spamit affiliate program — have expressed the belief that Sal and Icamis were likely the same person using two different identities. And there were many good reasons to support this conclusion.

For example, in 2010 Spamdot and its spam affiliate program Spamit were hacked, and its user database shows Sal and Icamis often accessed the forum from the same Internet address — usually from Cherepovets, an industrial town situated approximately 230 miles north of Moscow. Also, it was common for Icamis to reply when Spamdot members communicated a request or complaint to Sal, and vice versa.

Still, other clues suggested Icamis and Sal were two separate individuals. For starters, they frequently changed the status on their instant messenger clients at different times. Also, they each privately discussed with others having attended different universities.

KrebsOnSecurity began researching Icamis’s real-life identity in 2012, but failed to revisit any of that research until recently. In December 2023, KrebsOnSecurity published new details about the identity of “Rescator,” a Russian cybercriminal who is thought to be closely connected to the 2013 data breach at Target.

That story mentioned Rescator’s real-life identity was exposed by Icamis in April 2013, as part of a lengthy farewell letter Ika wrote to Spamdot members wherein Ika said he was closing the forum and quitting the cybercrime business entirely.

To no one’s shock, Icamis didn’t quit the business: He simply became more quiet and circumspect about his work, which increasingly was focused on helping crime groups siphon funds from U.S. bank accounts. But the Rescator story was a reminder that 10 years worth of research on who Ika/Icamis is in real life had been completely set aside. This post is an attempt to remedy that omission.

GENTLEMEN SCAMMERS

Icamis and Sal offered a comprehensive package of goods and services that any aspiring or accomplished spammer would need on a day-to-day basis: Virtually unlimited bulletproof domain registration and hosting services, as well as services that helped botmasters evade spam block lists generated by anti-spam groups like Spamhaus.org. Here’s snippet of Icamis’s ad on Spamdot from Aug. 2008, wherein he addresses forum members with the salutation, “Hello Gentlemen Scammers.”

We are glad to present you our services!
Many are already aware (and are our clients), but publicity is never superfluous.

Domains.
– all major gtlds (com, net, org, info, biz)
– many interesting and uninteresting cctlds
– options for any topic
– processing of any quantities
– guarantees
– exceptionally low prices for domains for white and gray schemes (including any SEO and affiliate spam )
– control panel with balances and auto-registration
– all services under the Ikamis brand, proven over the years;)

Servers.
– long-term partnerships with several [data centers] in several parts of the world for any topic
– your own data center (no longer in Russia ;)) for gray and white topics
– any configuration and any hardware
– your own IP networks (PI, not PA) and full legal support
– realtime backups to neutral sites
– guarantees and full responsibility for the services provided
– non-standard equipment on request
– our own admins to resolve any technical issues (services are free for clients)
– hosting (shared and vps) is also possible

Non-standard and related services.
– ssl certificates signed by geotrust and thawte
– old domains (any year, any quantity)
– beautiful domains (keyword, short, etc.)
– domains with indicators (any, for SEO, etc.)
– making unstable gtld domains stable
– interception and hijacking of custom domains (expensive)
– full domain posting via web.archive.org with restoration of native content (preliminary applications)
– any updates to our panels to suit your needs upon request (our own coders)

All orders for the “Domains” sections and “Servers” are carried out during the day (depending on our workload).
For non-standard and related services, a preliminary application is required 30 days in advance (except for ssl certificates – within 24 hours).

Icamis and Sal frequently claimed that their service kept Spamhaus and other anti-spam groups several steps behind their operations. But it’s clear that those anti-spam operations had a real and painful impact on spam revenues, and Salomon was obsessed with striking back at anti-spam groups, particularly Spamhaus.

In 2007, Salomon collected more than $3,000 from botmasters affiliated with competing spam affiliate programs that wanted to see Spamhaus suffer, and the money was used to fund a week-long distributed denial-of-service (DDoS) attack against Spamhaus and its online infrastructure. But rather than divert their spam botnets from their normal activity and thereby decrease sales, the botmasters voted to create a new DDoS botnet by purchasing installations of DDoS malware on thousands of already-hacked PCs (at a rate of $25 per 1,000 installs).

SALOMON

As an affiliate of Spamdot, Salomon used the email address ad1@safe-mail.net, and the password 19871987gr. The breach tracking service Constella Intelligence found the password 19871987gr was used by the email address grichishkin@gmail.com. Multiple accounts are registered to that email address under the name Alexander Valerievich Grichishkin, from Cherepovets.

In 2020, Grichishkin was arrested outside of Russia on a warrant for providing bulletproof hosting services to cybercriminal gangs. The U.S. government said Grichishkin and three others set up the infrastructure used by cybercriminals between 2009 to 2015 to distribute malware and attack financial institutions and victims throughout the United States.

Those clients included crooks using malware like Zeus, SpyEye, Citadel and the Blackhole exploit kit to build botnets and steal banking credentials.

“The Organization and its members helped their clients to access computers without authorization, steal financial information (including banking credentials), and initiate unauthorized wire transfers from victims’ financial accounts,” the government’s complaint stated.

Grichishkin pleaded guilty to conspiracy charges and was sentenced to four years in prison. He is 36 years old, has a wife and kids in Thailand, and is slated for release on February 8, 2024.

ICAMIS, THE PHANTOM GRADUATE

The identity of Icamis came into view when KrebsOnSecurity began focusing on clues that might connect Icamis to Cherepovets (Ika’s apparent hometown based on the Internet addresses he regularly used to access Spamdot).

Historic domain ownership records from DomainTools.com reveal that many of the email addresses and domains connected to Icamis invoke the name “Andrew Artz,” including icamis[.]ws, icamis[.]ru, and icamis[.]biz. Icamis promoted his services in 2003 — such as bulk-domains[.]info — using the email address icamis@4host.info. From one of his ads in 2005:

Domains For Projects Advertised By Spam

I can register bulletproof domains for sites and projects advertised by spam(of course they must be legal). I can not provide DNS for u, only domains. The price will be:

65$ for domain[if u will buy less than 5 domains]

50$ for domain[more than 5 domains]

45$ for domain[more than 10 domains]

These prices are for domains in the .net & .com zones.

If u want to order domains write me to: icamis@4host.info

In 2009, an “Andrew Artz” registered at the hosting service FirstVDS.com using the email address icamis@4host.info, with a notation saying the company name attached to the account was “WMPay.” Likewise, the bulletproof domain service icamis[.]ws was registered to an Andrew Artz.

The domain wmpay.ru is registered to the phonetically similar name “Andrew Hertz,” at andrew@wmpay.ru. A search on “icamis.ru” in Google brings up a 2003 post by him on a discussion forum designed by and for students of Amtek, a secondary school in Cherepovets (Icamis was commenting from an Internet address in Cherepovets).

The website amtek-foreva-narod.ru is still online, and it links to several yearbooks for Amtek graduates. It states that the yearbook for the Amtek class of 2004 is hosted at 41.wmpay[.]com.

The yearbook photos for the Amtek class of 2004 are not indexed in the Wayback Machine at archive.org, but the names and nicknames of 16 students remain. However, it appears that the entry for one student — the Wmpay[.]com site administrator — was removed at some point.

In 2004, the administrator of the Amtek discussion forum — a 2003 graduate who used the handle “Grand” — observed that there were three people named Andrey who graduated from Amtek in 2004, but one of them was conspicuously absent from the yearbook at wmpay[.]ru: Andrey Skvortsov.

To bring this full circle, Icamis was Andrey Skvortsov, the other Russian man charged alongside Grichiskin (the two others who pleaded guilty to conspiracy charges were from Estonia and Lithuania). All of the defendants in that case pleaded guilty to conspiracy to engage in a Racketeer Influenced Corrupt Organization (RICO).

[Author’s note: No doubt government prosecutors had their own reasons for omitting the nicknames of the defendants in their press releases, but that information sure would have saved me a lot of time and effort].

SKVORTSOV AND THE JABBERZEUS CREW

Skvortsov was sentenced to time served, and presumably deported. His current whereabouts are unknown and he was not reachable for comment via his known contact addresses.

The government says Ika and Sal’s bulletproof hosting empire provided extensive support for a highly damaging cybercrime group known as the JabberZeus Crew, which worked closely with the author of the Zeus Trojan — Evgeniy Mikhailovich Bogachev — to develop a then-advanced strain of the Zeus malware that was designed to defeat one-time codes for authentication. Bogachev is a top Russian cybercriminal with a standing $3 million bounty on his head from the FBI.

The JabberZeus Crew stole money by constantly recruiting money mules, people in the United States and in Europe who could be enticed or tricked into forwarding money stolen from cybercrime victims. Interestingly, Icamis’s various email addresses are connected to websites for a vast network of phony technology companies that claimed they needed people with bank accounts to help pay their overseas employees.

Icamis used the email address tech@safe-mail.net on Spamdot, and this email address is tied to the registration records for multiple phony technology companies that were set up to recruit money mules.

One such site — sun-technology[.]net — advertised itself as a Hong Kong-based electronics firm that was looking for “honest, responsible and motivated people in UK, USA, AU and NZ to be Sales Representatives in your particular region and receive payments from our clients. Agent commission is 5 percent of total amount received to the personal bank account. You may use your existing bank account or open a new one for these purposes.”

In January 2010, KrebsOnSecurity broke the news that the JabberZeus crew had just used money mules to steal $500,000 from tiny Duanesburg Central School District in upstate New York. As part of his sentence, Skvortsov was ordered to pay $497,200 in restitution to the Duanesburg Central School District.

The JabberZeus Crew operated mainly out of the eastern Ukraine city of Donetsk, which was always pro-Russia and is now occupied by Russian forces. But when Russia invaded Ukraine in February 2022, the alleged leader of the notorious cybercrime gang — Vyacheslav Igoravich Andreev (a.ka. Penchukov) — fled his mandatory military service orders and was arrested in Geneva, Switzerland. He is currently in federal custody awaiting trial, and is slated to be arraigned in U.S. federal court tomorrow (Jan. 9, 2024). A copy of the indictment against Andreev is here (PDF).

Highlights from the New U.S. Cybersecurity Strategy

The Biden administration today issued its vision for beefing up the nation’s collective cybersecurity posture, including calls for legislation establishing liability for software products and services that are sold with little regard for security. The White House’s new national cybersecurity strategy also envisions a more active role by cloud providers and the U.S. military in disrupting cybercriminal infrastructure, and it names China as the single biggest cyber threat to U.S. interests.

The strategy says the White House will work with Congress and the private sector to develop legislation that would prevent companies from disavowing responsibility for the security of their software products or services.

Coupled with this stick would be a carrot: An as-yet-undefined “safe harbor framework” that would lay out what these companies could do to demonstrate that they are making cybersecurity a central concern of their design and operations.

“Any such legislation should prevent manufacturers and software publishers with market power from fully disclaiming liability by contract, and establish higher standards of care for software in specific high-risk scenarios,” the strategy explains. “To begin to shape standards of care for secure software development, the Administration will drive the development of an adaptable safe harbor framework to shield from liability companies that securely develop and maintain their software products and services.”

Brian Fox, chief technology officer and founder of the software supply chain security firm Sonatype, called the software liability push a landmark moment for the industry.

“Market forces are leading to a race to the bottom in certain industries, while contract law allows software vendors of all kinds to shield themselves from liability,” Fox said. “Regulations for other industries went through a similar transformation, and we saw a positive result — there’s now an expectation of appropriate due care, and accountability for those who fail to comply. Establishing the concept of safe harbors allows the industry to mature incrementally, leveling up security best practices in order to retain a liability shield, versus calling for sweeping reform and unrealistic outcomes as previous regulatory attempts have.”

THE MOST ACTIVE, PERSISTENT THREAT

In 2012 (approximately three national cyber strategies ago), then director of the U.S. National Security Agency (NSA) Keith Alexander made headlines when he remarked that years of successful cyber espionage campaigns from Chinese state-sponsored hackers represented “the greatest transfer of wealth in history.”

The document released today says the People’s Republic of China (PRC) “now presents the broadest, most active, and most persistent threat to both government and private sector networks,” and says China is “the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do so.”

Many of the U.S. government’s efforts to restrain China’s technology prowess involve ongoing initiatives like the CHIPS Act, a new law signed by President Biden last year that sets aside more than $50 billion to expand U.S.-based semiconductor manufacturing and research and to make the U.S. less dependent on foreign suppliers; the National Artificial Intelligence Initiative; and the National Strategy to Secure 5G.

As the maker of most consumer gizmos with a computer chip inside, China is also the source of an incredible number of low-cost Internet of Things (IoT) devices that are not only poorly secured, but are probably more accurately described as insecure by design.

The Biden administration said it would continue its previously announced plans to develop a system of labeling that could be applied to various IoT products and give consumers some idea of how secure the products may be. But it remains unclear how those labels might apply to products made by companies outside of the United States.

FIGHTING BADNESS IN THE CLOUD

One could convincingly make the case that the world has witnessed yet another historic transfer of wealth and trade secrets over the past decade — in the form of ransomware and data ransom attacks by Russia-based cybercriminal syndicates, as well as Russian intelligence agency operations like the U.S. government-wide Solar Winds compromise.

On the ransomware front, the White House strategy seems to focus heavily on building the capability to disrupt the digital infrastructure used by adversaries that are threatening vital U.S. cyber interests. The document points to the 2021 takedown of the Emotet botnet — a cybercrime machine that was heavily used by multiple Russian ransomware groups — as a model for this activity, but says those disruptive operations need to happen faster and more often.

To that end, the Biden administration says it will expand the capacity of the National Cyber Investigative Joint Task Force (NCIJTF), the primary federal agency for coordinating cyber threat investigations across law enforcement agencies, the intelligence community, and the Department of Defense.

“To increase the volume and speed of these integrated disruption campaigns, the Federal Government must further develop technological and organizational platforms that enable continuous, coordinated operations,” the strategy observes. “The NCIJTF will expand its capacity to coordinate takedown and disruption campaigns with greater speed, scale, and frequency. Similarly, DoD and the Intelligence Community are committed to bringing to bear their full range of complementary authorities to disruption campaigns.”

The strategy anticipates the U.S. government working more closely with cloud and other Internet infrastructure providers to quickly identify malicious use of U.S.-based infrastructure, share reports of malicious use with the government, and make it easier for victims to report abuse of these systems.

“Given the interest of the cybersecurity community and digital infrastructure owners and operators in continuing this approach, we must sustain and expand upon this model so that collaborative disruption operations can be carried out on a continuous basis,” the strategy argues. “Threat specific collaboration should take the form of nimble, temporary cells, comprised of a small number of trusted operators, hosted and supported by a relevant hub. Using virtual collaboration platforms, members of the cell would share information bidirectionally and work rapidly to disrupt adversaries.”

But here, again, there is a carrot-and-stick approach: The administration said it is taking steps to implement Executive Order (EO) 13984 –issued by the Trump administration in January 2021 — which requires cloud providers to verify the identity of foreign persons using their services.

“All service providers must make reasonable attempts to secure the use of their infrastructure against abuse or other criminal behavior,” the strategy states. “The Administration will prioritize adoption and enforcement of a risk-based approach to cybersecurity across Infrastructure-as-a-Service providers that addresses known methods and indicators of malicious activity including through implementation of EO 13984.”

Ted Schlein, founding partner of the cybersecurity venture capital firm Ballistic Ventures, said how this gets implemented will determine whether it can be effective.

“Adversaries know the NSA, which is the elite portion of the nation’s cyber defense, cannot monitor U.S.-based infrastructure, so they just use U.S.-based cloud infrastructure to perpetrate their attacks,” Schlein said. “We have to fix this. I believe some of this section is a bit pollyannaish, as it assumes a bad actor with a desire to do a bad thing will self-identify themselves, as the major recommendation here is around KYC (‘know your customer’).”

INSURING THE INSURERS

One brief but interesting section of the strategy titled “Explore a Federal Cyber Insurance Backdrop” contemplates the government’s liability and response to a too-big-to-fail scenario or “catastrophic cyber incident.”

“We will explore how the government can stabilize insurance markets against catastrophic risk to drive better cybersecurity practices and to provide market certainty when catastrophic events do occur,” the strategy reads.

When the Bush administration released the first U.S. national cybersecurity strategy 20 years ago after the 9/11 attacks, the popular term for that same scenario was a “digital Pearl Harbor,” and there was a great deal of talk then about how the cyber insurance market would soon help companies shore up their cybersecurity practices.

In the wake of countless ransomware intrusions, many companies now hold cybersecurity insurance to help cover the considerable costs of responding to such intrusions. Leaving aside the question of whether insurance coverage has helped companies improve security, what happens if every one of these companies has to make a claim at the same time?

The notion of a Digital Pearl Harbor incident struck many experts at the time as a hyperbolic justification for expanding the government’s digital surveillance capabilities, and an overstatement of the capabilities of our adversaries. But back in 2003, most of the world’s companies didn’t host their entire business in the cloud.

Today, nobody questions the capabilities, goals and outcomes of dozens of nation-state level cyber adversaries. And these days, a catastrophic cyber incident could be little more than an extended, simultaneous outage at multiple cloud providers.

The full national cybersecurity strategy is available from the White House website (PDF).

New Ransom Payment Schemes Target Executives, Telemedicine

Ransomware groups are constantly devising new methods for infecting victims and convincing them to pay up, but a couple of strategies tested recently seem especially devious. The first centers on targeting healthcare organizations that offer consultations over the Internet and sending them booby-trapped medical records for the “patient.” The other involves carefully editing email inboxes of public company executives to make it appear that some were involved in insider trading.

Alex Holden is founder of Hold Security, a Milwaukee-based cybersecurity firm. Holden’s team gained visibility into discussions among members of two different ransom groups: CLOP (a.k.a. “Cl0p” a.k.a. “TA505“), and a newer ransom group known as Venus.

Last month, the U.S. Department of Health and Human Services (HHS) warned that Venus ransomware attacks were targeting a number of U.S. healthcare organizations. First spotted in mid-August 2022, Venus is known for hacking into victims’ publicly-exposed Remote Desktop services to encrypt Windows devices.

Holden said the internal discussions among the Venus group members indicate this gang has no problem gaining access to victim organizations.

“The Venus group has problems getting paid,” Holden said. “They are targeting a lot of U.S. companies, but nobody wants to pay them.”

Which might explain why their latest scheme centers on trying to frame executives at public companies for insider trading charges. Venus indicated it recently had success with a method that involves carefully editing one or more email inbox files at a victim firm — to insert messages discussing plans to trade large volumes of the company’s stock based on non-public information.

“We imitate correspondence of the [CEO] with a certain insider who shares financial reports of his companies through which your victim allegedly trades in the stock market, which naturally is a criminal offense and — according to US federal laws [includes the possibility of up to] 20 years in prison,” one Venus member wrote to an underling.

“You need to create this file and inject into the machine(s) like this so that metadata would say that they were created on his computer,” they continued. “One of my clients did it, I don’t know how. In addition to pst, you need to decompose several files into different places, so that metadata says the files are native from a certain date and time rather than created yesterday on an unknown machine.”

Holden said it’s not easy to plant emails into an inbox, but it can be done with Microsoft Outlook .pst files, which the attackers may also have access to if they’d already compromised a victim network.

“It’s not going to be forensically solid, but that’s not what they care about,” he said. “It still has the potential to be a huge scandal — at least for a while — when a victim is being threatened with the publication or release of these records.”

Holden said the CLOP ransomware gang has a different problem of late: Not enough victims. The intercepted CLOP communication seen by KrebsOnSecurity shows the group bragged about twice having success infiltrating new victims in the healthcare industry by sending them infected files disguised as ultrasound images or other medical documents for a patient seeking a remote consultation.

The CLOP members said one tried-and-true method of infecting healthcare providers involved gathering healthcare insurance and payment data to use in submitting requests for a remote consultation on a patient who has cirrhosis of the liver.

“Basically, they’re counting on doctors or nurses reviewing the patient’s chart and scans just before the appointment,” Holden said. “They initially discussed going in with cardiovascular issues, but decided cirrhosis or fibrosis of the liver would be more likely to be diagnosable remotely from existing test results and scans.”

While CLOP as a money making collective is a fairly young organization, security experts say CLOP members hail from a group of Threat Actors (TA) known as “TA505,” which MITRE’s ATT&CK database says is a financially motivated cybercrime group that has been active since at least 2014. “This group is known for frequently changing malware and driving global trends in criminal malware distribution,” MITRE assessed.

In April, 2021, KrebsOnSecurity detailed how CLOP helped pioneer another innovation aimed at pushing more victims into paying an extortion demand: Emailing the ransomware victim’s customers and partners directly and warning that their data would be leaked to the dark web unless they can convince the victim firm to pay up.

Security firm Tripwire points out that the HHS advisory on Venus says multiple threat actor groups are likely distributing the Venus ransomware. Tripwire’s tips for all organizations on avoiding ransomware attacks include:

• Making secure offsite backups.
• Running up-to-date security solutions and ensuring that your computers are protected with the latest security patches against vulnerabilities.
• Using hard-to-crack unique passwords to protect sensitive data and accounts, as well as enabling multi-factor authentication.
• Encrypting sensitive data wherever possible.
• Continuously educating and informing staff about the risks and methods used by cybercriminals to launch attacks and steal data.

While the above tips are important and useful, one critical area of ransomware preparedness overlooked by too many organizations is the need to develop — and then periodically rehearse — a plan for how everyone in the organization should respond in the event of a ransomware or data ransom incident. Drilling this breach response plan is key because it helps expose weaknesses in those plans that could be exploited by the intruders.

As noted in last year’s story Don’t Wanna Pay Ransom Gangs? Test Your Backups, experts say the biggest reason ransomware targets and/or their insurance providers still pay when they already have reliable backups of their systems and data is that nobody at the victim organization bothered to test in advance how long this data restoration process might take.

“Suddenly the victim notices they have a couple of petabytes of data to restore over the Internet, and they realize that even with their fast connections it’s going to take three months to download all these backup files,” said Fabian Wosar, chief technology officer at Emsisoft. “A lot of IT teams never actually make even a back-of-the-napkin calculation of how long it would take them to restore from a data rate perspective.”

Disneyland Malware Team: It’s a Puny World After All

A financial cybercrime group calling itself the Disneyland Team has been making liberal use of visually confusing phishing domains that spoof popular bank brands using Punycode, an Internet standard that allows web browsers to render domain names with non-Latin alphabets like Cyrillic.

The Disneyland Team uses common misspellings for top bank brands in its domains. For example, one domain the gang has used since March 2022 is ushank[.]com — which was created to phish U.S. Bank customers.

But this group also usually makes use of Punycode to make their phony bank domains look more legit. The U.S. financial services firm Ameriprise uses the domain ameriprise.com; the Disneyland Team’s domain for Ameriprise customers is https://www.xn--meripris-mx0doj[.]com [brackets added to defang the domain], which displays in the browser URL bar as ạmeriprisẹ[.]com.

Look carefully, and you’ll notice small dots beneath the “a” and the second “e”. You could be forgiven if you mistook one or both of those dots for a spec of dust on your computer screen or mobile device.

This candid view inside the Disneyland Team comes from Alex Holden, founder of the Milwaukee-based cybersecurity consulting firm Hold Security. Holden’s analysts gained access to a Web-based control panel the crime group has been using to keep track of victim credentials (see screenshot above). The panel reveals the gang has been operating dozens of Punycode-based phishing domains for the better part of 2022.

Have a look at the Punycode in this Disneyland Team phishing domain: https://login2.xn--mirtesnbd-276drj[.]com, which shows up in the browser URL bar as login2.ẹmirạtesnbd[.]com, a domain targeting users of Emirates NBD Bank in Dubai.

Here’s another domain registered this year by the Disneyland Team: https://xn--clientchwb-zxd5678f[.]com, which spoofs the login page of financial advisor Charles Schwab with the landing page of cliẹntșchwab[.]com. Again, notice the dots under the letters “e” and “s”.  Another Punycode domain of theirs sends would-be victims to cliẹrtschwạb[.]com, which combines a brand misspelling with Punycode.

We see the same dynamic with the Disneyland Team Punycode domain https://singlepoint.xn--bamk-pxb5435b[.]com, which translates to singlepoint.ụșbamk[.]com — again phishing U.S. Bank customers.

What’s going on here? Holden says the Disneyland Team is Russian-speaking — if not also based in Russia —  but it is not a phishing gang per se. Rather, this group uses the phony bank domains in conjunction with malicious software that is already secretly installed on a victim’s computer.

Holden said the Disneyland Team domains were made to help the group steal money from victims infected with a powerful strain of Microsoft Windows-based banking malware known as Gozi 2.0/Ursnif. Gozi specializes in collecting credentials, and is mainly used for attacks on client-side online banking to facilitate fraudulent bank transfers. Gozi also allows the attackers to connect to a bank’s website using the victim’s computer.

In years past, crooks like these would use custom-made “web injects” to manipulate what Gozi victims see in their Web browser when they visit their bank’s site. These web injects allowed malware to rewrite the bank’s HTML code on the fly, and copy and/or intercept any data users would enter into a web-based form, such as a username and password.

Most Web browser makers, however, have spent years adding security protections to block such nefarious activity. As a result, the Disneyland Team simply tries to make their domains look as much like the real thing as possible, and then funnel victims toward interacting with those imposter sites.

“The reason that it is infeasible for them to use in-browser injects include browser and OS protection measures, and difficulties manipulating dynamic pages for banks that require multi-factor authentication,” Holden said.

In reality, the fake bank website overlaid by the Disneyland Team’s malware relays the victim’s browser activity through to the real bank website, while allowing the attackers to forward any secondary login requests from the bank, such as secret questions or multi-factor authentication challenges.

The Disneyland Team included instructions for its users, noting that when the victim enters their login credentials, he sees a 10-second spinning wheel, and then the message, “Awaiting back office approval for your request. Please don’t close this window.”

The “SKIP” button in the screenshot above sends the user to the real bank login page, “in case the account is not interesting to us,” the manual explains. “Also, this redirect works if none of our operators are working at the time.”

The “TAKE” button in the Disneyland Team control panel allows users or affiliates to claim ownership over a specific infected machine or bot, which then excludes other users from interacting with that victim.

In the event that it somehow takes a long time to get the victim (bot) connected to the Disneyland Team control panel, or if it is necessary to delay a transaction, users can push a button that prompts the following message to appear on the victim’s screen:

“Your case ID number is 875472. An online banking support representative will get in touch shortly. Please provide your case ID number, and DO NOT close this page.”

The Disneyland user manual explains that the panel can be used to force the victim to log in again if they transmit invalid credentials. It also has other options for stalling victims whilst their accounts are drained. Another fake prompt the panel can produce shows the victim a message saying, “We are currently working on updating our security system. You should be able to log in once the countdown timer expires.”

The user manual says this option blocks the user from accessing their account for two hours. “It is possible to block for an hour with this button, in this case they get less frustrated, within the hours ddos will kill their network.”

Cybercrime groups will sometimes launch distributed denial-of-service (DDoS) attacks on the servers of the companies they’re trying to rob — which is usually intended to distract victims from their fleecing, although Holden said it’s unclear if the Disneyland Team employs this tactic as well.

For many years, KrebsOnSecurity tracked the day-to-day activities of a similar malware crew that used web injects and bots to steal tens of millions of dollars from small- to mid-sized businesses across the United States.

At the end of each story, I would close with a recommendation that anyone concerned about malware snarfing their banking information should strongly consider doing their online banking from a dedicated, security-hardened system which is only used for that purpose. Of course, the dedicated system approach works only if you always use that dedicated system for managing your account online.

Those stories also observed that since the vast majority of the malicious software used in cyberheists is designed to run only on Microsoft Windows computers, it made sense to pick a non-Windows computer for that dedicated banking system, such as a Mac or even a version of Linux. I still stand by this advice.

In case anyone is interested, here (PDF) is a list of all phishing domains currently and previously used by the Disneyland Team.

Accused ‘Raccoon’ Malware Developer Fled Ukraine After Russian Invasion

A 26-year-old Ukrainian man is awaiting extradition from The Netherlands to the United States on charges that he acted as a core developer for Raccoon, a popular “malware-as-a-service” offering that helped paying customers steal passwords and financial data from millions of cybercrime victims. KrebsOnSecurity has learned that the defendant was busted in March 2022, after fleeing mandatory military service in Ukraine in the weeks following the Russian invasion.

The U.S. Attorney for the Western District of Texas unsealed an indictment last week that named Ukrainian national Mark Sokolovsky as the core developer for the Raccoon Infostealer business, which was marketed on several Russian-language cybercrime forums beginning in 2019.

Raccoon was essentially a Web-based control panel, where — for $200 a month — customers could get the latest version of the Raccoon Infostealer malware, and interact with infected systems in real time. Security experts say the passwords and other data stolen by Raccoon malware were often resold to groups engaged in deploying ransomware.

Working with investigators in Italy and The Netherlands, U.S. authorities seized a copy of the server used by Raccoon to help customers manage their botnets. According to the U.S. Justice Department, FBI agents have identified more than 50 million unique credentials and forms of identification (email addresses, bank accounts, cryptocurrency addresses, credit card numbers, etc.) stolen with the help of Raccoon.

The unsealed indictment (PDF) doesn’t delve much into how investigators tied Sokolovsky to Raccoon, but two sources close to the investigation shared more information about that process on condition of anonymity because they were not authorized to discuss the case publicly.

According to those sources, U.S. authorities zeroed in on an operational security mistake that the Raccoon developer made early on in his posts to the crime forums, connecting a Gmail account for a cybercrime forum identity used by the Raccoon developer (“Photix”) to an Apple iCloud account belonging to Sokolovsky. For example, the indictment includes a photo that investigators subpoenaed from Sokolovsky’s iCloud account that shows him posing with several stacks of bundled cash.

When Russia invaded Ukraine in late February 2022, Sokolovsky was living in Kharkiv, a city in northeast Ukraine that would soon come under heavy artillery bombardment from Russian forces. Authorities monitoring Sokolovsky’s iCloud account had spent weeks watching him shuttle between Kharkiv and the Ukrainian capital Kyiv, but on Mar. 18, 2022, his phone suddenly showed up in Poland.

Investigators learned from Polish border guards that Sokolovsky had fled Ukraine in a Porsche Cayenne along with a young blond woman, leaving his mother and other family behind. The image at the top of this post was shared with U.S. investigators by Polish border security officials, and it shows Sokolovsky leaving Poland for Germany on Mar. 18.

At the time, all able-bodied men of military age were required to report for service to help repel the Russian invasion, and it would have been illegal for Sokolovsky to leave Ukraine without permission. But both sources said investigators believe Sokolovsky bribed border guards to let them pass.

Authorities soon tracked Sokolovsky’s phone through Germany and eventually to The Netherlands, with his female companion helpfully documenting every step of the trip on her Instagram account. Here is a picture she posted of the two embracing upon their arrival in Amsterdam’s Dam Square:

Authorities in The Netherlands arrested Sokolovsky on Mar. 20, and quickly seized control over the Raccoon Infostealer infrastructure. Meanwhile, on March 25 the accounts that had previously advertised the Raccoon Stealer malware on cybercrime forums announced the service was closing down. The parting message to customers said nothing of an arrest, and instead insinuated that the core members in charge of the malware-as-a-service project had perished in the Russian invasion.

“Unfortunately, due to the ‘special operation,’ we will have to close our Raccoon Stealer project,” the team announced Mar. 25. “Our team members who were responsible for critical components of the product are no longer with us. Thank you for this experience and time, for every day, unfortunately everything, sooner or later, the end of the WORLD comes to everyone.”

Sokolovsky’s extradition to the United States has been granted, but he is appealing that decision. He faces one count of conspiracy to commit computer fraud; one count of conspiracy to commit wire fraud; one count of conspiracy to commit money laundering, and one count of aggravated identity theft.

Sources tell KrebsOnSecurity that Sokolovsky has been consulting with Houston, Tx.-based attorney F. Andino Reynal, the same lawyer who represented Alex Jones in the recent defamation lawsuit against Jones and his conspiracy theory website Infowars. Reynal was responsible for what Jones himself referred to as the “Perry Mason” moment of the trial, wherein the plaintiff’s lawyer revealed that Reynal had inadvertently given them an entire digital copy of Jones’s cell phone. Mr. Reynal did not respond to requests for comment.

If convicted, Sokolovsky faces a maximum penalty of 20 years in prison for the wire fraud and money laundering offenses, five years for the conspiracy to commit computer fraud charge, and a mandatory consecutive two-year term for the aggravated identity theft offense.

The Justice Department has set up a website — raccoon.ic3.gov — that allows visitors to check whether their email address shows up in the data collected by the Raccoon Stealer service.

It Might Be Our Data, But It’s Not Our Breach

A cybersecurity firm says it has intercepted a large, unique stolen data set containing the names, addresses, email addresses, phone numbers, Social Security Numbers and dates of birth on nearly 23 million Americans. The firm’s analysis of the data suggests it corresponds to current and former customers of AT&T. The telecommunications giant stopped short of saying the data wasn’t theirs, but it maintains the records do not appear to have come from its systems and may be tied to a previous data incident at another company.

Milwaukee-based cybersecurity consultancy Hold Security said it intercepted a 1.6 gigabyte compressed file on a popular dark web file-sharing site. The largest item in the archive is a 3.6 gigabyte file called “dbfull,” and it contains 28.5 million records, including 22.8 million unique email addresses and 23 million unique SSNs. There are no passwords in the database.

Hold Security founder Alex Holden said a number of patterns in the data suggest it relates to AT&T customers. For starters, email addresses ending in “att.net” accounted for 13.7 percent of all addresses in the database, with addresses from SBCGLobal.net and Bellsouth.net — both AT&T companies — making up another seven percent. In contrast, Gmail users made up more than 30 percent of the data set, with Yahoo addresses accounting for 24 percent. More than 10,000 entries in the database list “none@att.com” in the email field.

Holden’s team also examined the number of email records that included an alias in the username portion of the email, and found 293 email addresses with plus addressing. Of those, 232 included an alias that indicated the customer had signed up at some AT&T property; 190 of the aliased email addresses were “+att@”; 42 were “+uverse@,” an oddly specific reference to an AT&T entity that included broadband Internet. In September 2016, AT&T rebranded U-verse as AT&T Internet.

According to its website, AT&T Internet is offered in 21 states, including Alabama, Arkansas, California, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Nevada, North Carolina, Ohio, Oklahoma, Tennessee, Texas and Wisconsin. Nearly all of the records in the database that contain a state designation corresponded to those 21 states; all other states made up just 1.64 percent of the records, Hold Security found.

The vast majority of records in this database belong to consumers, but almost 13,000 of the entries are for corporate entities. Holden said 387 of those corporate names started with “ATT,” with various entries like “ATT PVT XLOW” appearing 81 times. And most of the addresses for these entities are AT&T corporate offices.

How old is this data? One clue may be in the dates of birth exposed in this database. There are very few records in this file with dates of birth after 2000.

“Based on these statistics, we see that the last significant number of subscribers born in March of 2000,” Holden told KrebsOnSecurity, noting that AT&T requires new account holders to be 18 years of age or older. “Therefore, it makes sense that the dataset was likely created close to March of 2018.”

There was also this anomaly: Holden said one of his analysts is an AT&T customer with a 13-letter last name, and that her AT&T bill has always had the same unique misspelling of her surname (they added yet another letter). He said the analyst’s name is identically misspelled in this database.

KrebsOnSecurity shared the large data set with AT&T, as well as Hold Security’s analysis of it. AT&T ultimately declined to say whether all of the people in the database are or were at some point AT&T customers. The company said the data appears to be several years old, and that “it’s not immediately possible to determine the percentage that may be customers.”

“This information does not appear to have come from our systems,” AT&T said in a written statement. “It may be tied to a previous data incident at another company. It is unfortunate that data can continue to surface over several years on the dark web. However, customers often receive notices after such incidents, and advice for ID theft is consistent and can be found online.”

The company declined to elaborate on what they meant by “a previous data incident at another company.”

But it seems likely that this database is related to one that went up for sale on a hacker forum on August 19, 2021. That auction ran with the title “AT&T Database +70M (SSN/DOB),” and was offered by ShinyHunters, a well-known threat actor with a long history of compromising websites and developer repositories to steal credentials or API keys.

ShinyHunters established the starting price for the auction at $200,000, but set the “flash” or “buy it now” price at $1 million. The auction also included a small sampling of the stolen information, but that sample is no longer available. The hacker forum where the ShinyHunters sales thread existed was seized by the FBI in April, and its alleged administrator arrested.

But cached copies of the auction, as recorded by cyber intelligence firm Intel 471, show ShinyHunters received bids of up to $230,000 for the entire database before they suspended the sale.

“This thread has been deleted several times,” ShinyHunters wrote in their auction discussion on Sept. 6, 2021. “Therefore, the auction is suspended. AT&T will be available on WHM as soon as they accept new vendors.”

The WHM initialism was a reference to the White House Market, a dark web marketplace that shut down in October 2021.

“In many cases, when a database is not sold, ShinyHunters will release it for free on hacker forums,” wrote BleepingComputer’s Lawrence Abrams, who broke the news of the auction last year and confronted AT&T about the hackers’ claims.

AT&T gave Abrams a similar statement, saying the data didn’t come from their systems.

“When asked whether the data may have come from a third-party partner, AT&T chose not to speculate,” Abrams wrote. “‘Given this information did not come from us, we can’t speculate on where it came from or whether it is valid,'” AT&T told BleepingComputer.

Asked to respond to AT&T’s denial, ShinyHunters told BleepingComputer at the time, “I don’t care if they don’t admit. I’m just selling.”

On June 1, 2022, a 21-year-old Frenchman was arrested in Morocco for allegedly being a member of ShinyHunters. Databreaches.net reports the defendant was arrested on an Interpol “Red Notice” at the request of a U.S. federal prosecutor from Washington state.

Databreaches.net suggests the warrant could be tied to a ShinyHunters theft in May 2020, when the group announced they had exfiltrated 500 GB of Microsoft’s source code from Microsoft’s private GitHub repositories.

“Researchers assess that Shiny Hunters gained access to roughly 1,200 private repositories around March 28, 2020, which have since been secured,” reads a May 2020 alert posted by the New Jersey Cybersecurity & Communications Integration Cell, a component within the New Jersey Office of Homeland Security and Preparedness.

“Though the breach was largely dismissed as insignificant, some images of the directory listing appear to contain source code for Azure, Office, and some Windows runtimes, and concerns have been raised regarding access to private API keys or passwords that may have been mistakenly included in some private repositories,” the alert continues. “Additionally, Shiny Hunters is flooding dark web marketplaces with breached databases.”

Last month, T-Mobile agreed to pay $350 million to settle a consolidated class action lawsuit over a breach in 2021 that affected 40 million current and former customers. The breach came to light on Aug. 16, 2021, when someone starting selling tens of millions of SSN/DOB records from T-Mobile on the same hacker forum where the ShinyHunters would post their auction for the claimed AT&T database just three days later.

T-Mobile has not disclosed many details about the “how” of last year’s breach, but it said the intruder(s) “leveraged their knowledge of technical systems, along with specialized tools and capabilities, to gain access to our testing environments and then used brute force attacks and other methods to make their way into other IT servers that included customer data.”

The Security Pros and Cons of Using Email Aliases

One way to tame your email inbox is to get in the habit of using unique email aliases when signing up for new accounts online. Adding a “+” character after the username portion of your email address — followed by a notation specific to the site you’re signing up at — lets you create an infinite number of unique email addresses tied to the same account. Aliases can help users detect breaches and fight spam. But not all websites allow aliases, and they can complicate account recovery. Here’s a look at the pros and cons of adopting a unique alias for each website.

What is an email alias? When you sign up at a site that requires an email address, think of a word or phrase that represents that site for you, and then add that prefaced by a “+” sign just to the left of the “@” sign in your email address. For instance, if I were signing up at example.com, I might give my email address as krebsonsecurity+example@gmail.com. Then, I simply go back to my inbox and create a corresponding folder called “Example,” along with a new filter that sends any email addressed to that alias to the Example folder.

Importantly, you don’t ever use this alias anywhere else. That way, if anyone other than example.com starts sending email to it, it is reasonable to assume that example.com either shared your address with others or that it got hacked and relieved of that information. Indeed, security-minded readers have often alerted KrebsOnSecurity about spam to specific aliases that suggested a breach at some website, and usually they were right, even if the company that got hacked didn’t realize it at the time.

Alex Holden, founder of the Milwaukee-based cybersecurity consultancy Hold Security, said many threat actors will scrub their distribution lists of any aliases because there is a perception that these users are more security- and privacy-focused than normal users, and are thus more likely to report spam to their aliased addresses.

Holden said freshly-hacked databases also are often scrubbed of aliases before being sold in the underground, meaning the hackers will simply remove the aliased portion of the email address.

“I can tell you that certain threat groups have rules on ‘+*@’ email address deletion,” Holden said. “We just got the largest credentials cache ever — 1 billion new credentials to us — and most of that data is altered, with aliases removed. Modifying credential data for some threat groups is normal. They spend time trying to understand the database structure and removing any red flags.”

According to the breach tracking site HaveIBeenPwned.com, only about .03 percent of the breached records in circulation today include an alias.

Email aliases are rare enough that seeing just a few email addresses with the same alias in a breached database can make it trivial to identify which company likely got hacked and leaked said database. That’s because the most common aliases are simply the name of the website where the signup takes place, or some abbreviation or shorthand for it.

Hence, for a given database, if there are more than a handful of email addresses that have the same alias, the chances are good that whatever company or website corresponds to that alias has been hacked.

That might explain the actions of Allekabels, a large Dutch electronics web shop that suffered a data breach in 2021. Allekabels said a former employee had stolen data on 5,000 customers, and that those customers were then informed about the data breach by Allekabels.

But Dutch publication RTL Nieuws said it obtained a copy of the Allekabels user database from a hacker who was selling information on 3.6 million customers at the time, and found that the 5,000 number cited by the retailer corresponded to the number of customers who’d signed up using an alias. In essence, RTL argued, the company had notified only those most likely to notice and complain that their aliased addresses were suddenly receiving spam.

“RTL Nieuws has called more than thirty people from the database to check the leaked data,” the publication explained. “The customers with such a unique email address have all received a message from Allekabels that their data has been leaked – according to Allekabels they all happened to be among the 5000 data that this ex-employee had stolen.”

HaveIBeenPwned’s Hunt arrived at the conclusion that aliases account for about .03 percent of registered email addresses by studying the data leaked in the 2013 breach at Adobe, which affected at least 38 million users. Allekabels’s ratio of aliased users was considerably higher than Adobe’s — .14 percent — but then again European Internet users tend to be more privacy-conscious.

While overall adoption of email aliases is still quite low, that may be changing. Apple customers who use iCloud to sign up for new accounts online automatically are prompted to use Apple’s Hide My Email feature, which creates the account using a unique email address that automatically forwards to a personal inbox.

What are the downsides to using email aliases, apart from the hassle of setting them up? The biggest downer is that many sites won’t let you use a “+” sign in your email address, even though this functionality is clearly spelled out in the email standard.

Also, if you use aliases, it helps to have a reliable mnemonic to remember the alias used for each account (this is a non-issue if you create a new folder or rule for each alias). That’s because knowing the email address for an account is generally a prerequisite for resetting the account’s password, and if you can’t remember the alias you added way back when you signed up, you may have limited options for recovering access to that account if you at some point forget your password.

What about you, Dear Reader? Do you rely on email aliases? If so, have they been useful? Did I neglect to mention any pros or cons? Feel free to sound off in the comments below.

Breach Exposes Users of Microleaves Proxy Service

Microleaves, a ten-year-old proxy service that lets customers route their web traffic through millions of Microsoft Windows computers, recently fixed a vulnerability in their website that exposed their entire user database. Microleaves claims its proxy software is installed with user consent, but data exposed in the breach shows the service has a lengthy history of being supplied with new proxies by affiliates incentivized to distribute the software any which way they can — such as by secretly bundling it with other titles.

Launched in 2013, Microleaves is a service that allows customers to route their Internet traffic through PCs in virtually any country or city around the globe. Microleaves works by changing each customer’s Internet Protocol (IP) address every five to ten minutes.

The service, which accepts PayPal, Bitcoin and all major credit cards, is aimed primarily at enterprises engaged in repetitive, automated activity that often results in an IP address being temporarily blocked — such as data scraping, or mass-creating new accounts at some service online.

In response to a report about the data exposure from KrebsOnSecurity, Microleaves said it was grateful for being notified about a “very serious issue regarding our customer information.”

Abhishek Gupta is the PR and marketing manager for Microleaves, which he said in the process of being rebranded to “Shifter.io.” Gupta said the report qualified as a “medium” severity security issue in Shifter’s brand new bug bounty program (the site makes no mention of a bug bounty), which he said offers up to $2,000 for reporting data exposure issues like the one they just fixed. KrebsOnSecurity declined the offer and requested that Shifter donate the amount to the Electronic Frontier Foundation (EFF), a digital rights group.

From its inception nearly a decade ago, Microleaves has claimed to lease between 20-30 million IPs via its service at any time. Riley Kilmer, co-founder of the proxy-tracking service Spur.us, said that 20-30 million number might be accurate for Shifter if measured across a six-month time frame. Currently, Spur is tracking roughly a quarter-million proxies associated with Microleaves/Shifter each day, with a high rate of churn in IPs.

Early on, this rather large volume of IP addresses led many to speculate that Microleaves was just a botnet which was being resold as a commercial proxy service.

The very first discussion thread started by the new user Microleaves on the forum BlackHatWorld in 2013 sought forum members who could help test and grow the proxy network. At the time, the Microleaves user said their proxy network had 150,000 IPs globally, and was growing quickly.

One of BlackHatWorld’s moderators asked the administrator of the forum to review the Microleaves post.

“User states has 150k proxies,” the forum skeptic wrote. “No seller on BHW has 150k working daily proxies none of us do. Which hints at a possible BOTNET. That’s the only way you will get 150k.”

Microleaves has long been classified by antivirus companies as adware or as a “potentially unwanted program” (PUP), the euphemism that antivirus companies use to describe executable files that get installed with ambiguous consent at best, and are often part of a bundle of software tied to some “free” download. Security vendor Kaspersky flags the Microleaves family of software as a trojan horse program that commandeers the user’s Internet connection as a proxy without notifying the user.

“While working, these Trojans pose as Microsoft Windows Update,” Kaspersky wrote.

In a February 2014 post to BlackHatWorld, Microleaves announced that its sister service — reverseproxies[.]com — was now offering an “Auto CAPTCHA Solving Service,” which automates the solving of those squiggly and sometimes frustrating puzzles that many websites use to distinguish bots from real visitors. The CAPTCHA service was offered as an add-on to the Microleaves proxy service, and ranged in price from $20 for a 2-day trial to $320 for solving up to 80 captchas simultaneously.

“We break normal Recaptcha with 60-90% success rate, recaptcha with blobs 30% success, and 500+ other captcha,” Microleaves wrote. “As you know all success rate on recaptcha depends very much on good proxies that are fresh and not spammed!”

WHO IS ACIDUT?

The exposed Microleaves user database shows that the first user created on the service — username “admin” — used the email address alex.iulian@aol.com. A search on that email address in Constella Intelligence, a service that tracks breached data, reveals it was used to create an account at the link shortening service bit.ly under the name Alexandru Florea, and the username “Acidut.” [Full disclosure: Constella is currently an advertiser on this website].

According to the cyber intelligence company Intel 471, a user named Acidut with the email address iulyan87_4u@gmail.com had an active presence on almost a dozen shadowy money-making and cybercrime forums from 2010 to 2017, including BlackHatWorld, Carder[.]pro, Hackforums, OpenSC, and CPAElites.

In a 2011 post on Hackforums, Acidut said they were building a botnet using an “exploit kit,” a set of browser exploits made to be stitched into hacked websites and foist malware on visitors. Acidut claimed their exploit kit was generating 3,000 to 5,000 new bots each day. OpenSC was hacked at one point, and its private messages show Acidut purchased a license from Exmanoize, the handle used by the creator of the Eleonore Exploit Kit.

By November 2013, Acidut was advertising the sale of “26 million SOCKS residential proxies.” In a March 2016 post to CPAElites, Acidut said they had a worthwhile offer for people involved in pay-per-install or “PPI” schemes, which match criminal gangs who pay for malware installs with enterprising hackers looking to sell access to compromised PCs and websites.

Because pay-per-install affiliate schemes rarely impose restrictions on how the software can be installed, such programs can be appealing for cybercriminals who already control large collections of hacked machines and/or compromised websites. Indeed, Acidut went a step further, adding that their program could be quietly and invisibly nested inside of other programs.

“For those of you who are doing PPI I have a global offer that you can bundle to your installer,” Acidut wrote. “I am looking for many installs for an app that will generate website visits. The installer has a silence version which you can use inside your installer. I am looking to buy as many daily installs as possible worldwide, except China.”

Asked about the source of their proxies in 2014, the Microleaves user responded that it was “something related to a PPI network. I can’t say more and I won’t get into details.”

Acidut authored a similar message on the forum BlackHatWorld in 2013, where they encouraged users to contact them on Skype at the username “nevo.julian.” That same Skype contact address was listed prominently on the Microleaves homepage up until about a week ago when KrebsOnSecurity first reached out to the company.

ONLINE[.]IO (NOW MERCIFULLY OFFLINE)

There is a Facebook profile for an Alexandru Iulian Florea from Constanta, Romania, whose username on the social media network is Acidut. Prior to KrebsOnSecurity alerting Shifter of its data breach, the Acidut profile page associated Florea with the websites microleaves.com, shrooms.io, leftclick[.]io, and online[.]io. Mr. Florea did not respond to multiple requests for comment, and his Facebook page no longer mentions these domains.

Leftclick and online[.]io emerged as subsidiaries of Microleaves between 2017 and 2018. According to a help wanted ad posted in 2018 for a developer position at online[.]io, the company’s services were brazenly pitched to investors as “a cybersecurity and privacy tool kit, offering extensive protection using advanced adblocking, anti-tracking systems, malware protection, and revolutionary VPN access based on residential IPs.”

“Online[.]io is developing the first fully decentralized peer-to-peer networking technology and revolutionizing the browsing experience by making it faster, ad free, more reliable, secure and non-trackable, thus freeing the Internet from annoying ads, malware, and trackers,” reads the rest of that help wanted ad.

Microleaves CEO Alexandru Florea gave an “interview” to the website Irishtechnews.ie in 2018, in which he explained how Online[.]io (OIO) was going to upend the online advertising and security industries with its initial coin offering (ICO). The word interview is in air quotes because the following statements by Florea deserved some serious pushback by the interviewer.

“Online[.]io solution, developed using the Ethereum blockchain, aims at disrupting the digital advertising market valued at more than $1 trillion USD,” Alexandru enthused. “By staking OIO tokens and implementing our solution, the website operators will be able to access a new non-invasive revenue stream, which capitalizes on time spent by users online.”

“At the same time, internet users who stake OIO tokens will have the opportunity to monetize on the time spent online by themselves and their peers on the World Wide Web,” he continued. “The time spent by users online will lead to ICE tokens being mined, which in turn can be used in the dedicated merchant system or traded on exchanges and consequently changed to fiat.”

Translation: If you install our proxy bot/CAPTCHA-solver/ad software on your computer — or as an exploit kit on your website — we’ll make millions hijacking ads and you will be rewarded with heaps of soon-to-be-worthless shitcoin. Oh, and all your security woes will disappear, too.

It’s unclear how many Internet users and websites willingly agreed to get bombarded with Online[.]io’s annoying ads and search hijackers — and to have their PC turned into a proxy or CAPTCHA-solving zombie for others. But that is exactly what multiple security companies said happened when users encountered online[.]io, which operated using the Microsoft Windows process name of “online-guardian.exe.”

Incredibly, Crunchbase says Online[.]io raised $6 million in funding for an initial coin offering in 2018, based on the plainly ludicrous claims made above. Since then, however, online[.]io seems to have gone…offline, for good.

SUPER TECH VENTURES?

Until this week, Shifter.io’s website also exposed information about its customer base and most active users, as well as how much money each client has paid over the lifetime of their subscription. The data indicates Shifter has earned more than $11.7 million in direct payments, although it’s unclear how far back in time those payment records go, or how complete they are.

The bulk of Shifter customers who spent more than $100,000 at the proxy service appear to be digital advertising companies, including some located in the United States. None of the several Shifter customers approached by KrebsOnSecurity agreed to be interviewed.

Shifter’s Gupta said he’d been with the company for three years, since the new owner took over the company and made the rebrand to Shifter.

“The company has been on the market for a long time, but operated under a different brand called Microleaves, until new ownership and management took over the company started a reorganization process that is still on-going,” Gupta said. “We are fully transparent. Mostly [our customers] work in the data scraping niche, this is why we actually developed more products in this zone and made a big shift towards APIs and integrated solutions in the past year.”

Ah yes, the same APIs and integrated solutions that were found exposed to the Internet and leaking all of Shifter’s customer information.

Gupta said the original founder of Microleaves was a man from India, who later sold the business to Florea. According to Gupta, the Romanian entrepreneur had multiple issues in trying to run the company, and then sold it three years ago to the current owner — Super Tech Ventures, a private equity company based in Taiwan.

“Our CEO is Wang Wei, he has been with the company since 3 years ago,” Gupta said. “Mr. Florea left the company two years ago after ending this transition period.”

Google and other search engines seem to know nothing about a Super Tech Ventures based in Taiwan. Incredibly, Shifter’s own PR person claimed that he, too, was in the dark on this subject.

“I would love to help, but I really don’t know much about the mother company,” Gupta said, essentially walking back his “fully transparent” statement. “I know they are a branch of the bigger group of asian investment firms focused on private equity in multiple industries.”

Adware and proxy software are often bundled together with “free” software utilities online, or with popular software titles that have been pirated and quietly fused with installers tied to various PPI affiliate schemes.

But just as often, these intrusive programs will include some type of notice — even if installed as part of a software bundle — that many users simply do not read and click “Next” to get on with installing whatever software they’re seeking to use. In these cases, selecting the “basic” or “default” settings while installing usually hides any per-program installation prompts, and assumes you agree to all of the bundled programs being installed. It’s always best to opt for the “custom” installation mode, which can give you a better idea of what is actually being installed, and can let you control certain aspects of the installation.

Either way, it’s best to start with the assumption that if a software or service online is “free,” that there is likely some component involved that allows the provider of that service to monetize your activity. As KrebsOnSecurity noted at the conclusion of last week’s story on a China-based proxy service called 911, the rule of thumb for transacting online is that if you’re not the paying customer, then you and/or your devices are probably the product that’s being sold to others.

Further reading on proxy services:

July 18, 2022: A Deep Dive Into the Residential Proxy Service ‘911’
June 28, 2022: The Link Between AWM Proxy & the Glupteba Botnet
June 22, 2022: Meet the Administrators of the RSOCKS Proxy Botnet
Sept. 1, 2021: 15-Year-Old Malware Proxy Network VIP72 Goes Dark
Aug. 19, 2019: The Rise of “Bulletproof” Residential Networks

Senators Urge FTC to Probe ID.me Over Selfie Data

Some of more tech-savvy Democrats in the U.S. Senate are asking the Federal Trade Commission (FTC) to investigate identity-proofing company ID.me for “deceptive statements” the company and its founder allegedly made over how they handle facial recognition data collected on behalf of the Internal Revenue Service, which until recently required anyone seeking a new IRS account online to provide a live video selfie to ID.me.

In a letter to FTC Chair Lina Khan, the Senators charge that ID.me’s CEO Blake Hall has offered conflicting statements about how his company uses the facial scan data it collects on behalf of the federal government and many states that use the ID proofing technology to screen applicants for unemployment insurance.

The lawmakers say that in public statements and blog posts, ID.me has frequently emphasized the difference between two types of facial recognition: One-to-one, and one-to-many. In the one-to-one approach, a live video selfie is compared to the image on a driver’s license, for example. One-to-many facial recognition involves comparing a face against a database of other faces to find any potential matches.

Americans have particular reason to be concerned about the difference between these two types of facial recognition, says the letter to the FTC, signed by Sens. Cory Booker (D-N.J.), Edward Markey (D-Mass.), Alex Padilla (D-Calif.), and Ron Wyden (D-Ore.):

“While one-to-one recognition involves a one-time comparison of two images in order to confirm an applicant’s identity, the use of one-to-many recognition means that millions of innocent people will have their photographs endlessly queried as part of a digital ‘line up.’ Not only does this violate individuals’ privacy, but the inevitable false matches associated with one-to-many recognition can result in applicants being wrongly denied desperately-needed services for weeks or even months as they try to get their case reviewed.”

“This risk is especially acute for people of color: NIST’s Facial Recognition Vendor Test found that many facial recognition algorithms have rates of false matches that are as much as 100 times higher for individuals from countries in West Africa, East Africa and East Asia than for individuals from Eastern European countries. This means Black and Asian Americans could be disproportionately likely to be denied benefits due to a false match in a one-to-many facial recognition system.”

The lawmakers say that throughout the latter half of 2021, ID.me published statements and blog posts stating it did not use one-to-many facial recognition and that the approach was “problematic” and “tied to surveillance operations.” But several days after a Jan. 16, 2022 post here about the IRS’s new facial ID requirement went viral and prompted a public backlash, Hall acknowledged in a LinkedIn posting that ID.me does use one-to-many facial recognition.

“Within days, the company edited the numerous blog posts and white papers on its website that previously stated the company did not use one-to-many to reflect the truth,” the letter alleges. “According to media reports, the company’s decision to correct its prior misleading statements came after mounting internal pressure from its employees.”

Cyberscoop’s Tonya Riley published excerpts from internal ID.me employee Slack messages wherein some expressed dread and unease with the company’s equivocation on its use of one-to-many facial recognition.

In February, the IRS announced it would no longer require facial scans or other biometric data from taxpayers seeking to create an account at the agency’s website. The agency also pledged that any biometric data shared with ID.me would be permanently deleted.

But the IRS still requires new account applicants to sign up with either ID.me or Login.gov, a single sign-on solution already used to access 200 websites run by 28 federal agencies. It also still offers the option of providing a live selfie for verification purposes, although the IRS says this data will be deleted automatically.

Asked to respond to concerns raised in the letter from Senate lawmakers, ID.me instead touted its successes in stopping fraud.

“Five state workforce agencies have publicly credited ID.me with helping to prevent $238 billion dollars in fraud,” the statement reads. “Conditions were so bad during the pandemic that the deputy assistant director of the FBI called the fraud ‘an economic attack on the United States.’ ID.me played a critical role in stopping that attack in more than 20 states where the service was rapidly adopted for its equally important ability to increase equity and verify individuals left behind by traditional options. We look forward to cooperating with all relevant government bodies to clear up any misunderstandings.”

As Cyberscoop reported on Apr. 14, the House Oversight and Reform Committee last month began an investigation into ID.me’s practices, with committee chairwoman Carolyn Maloney (D-N.Y.) saying the committee’s questions to the company would help shape policy on how the government wields facial recognition technology.

A copy of the letter the senators sent to the FTC is here (PDF).