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The U.S. Federal Bureau of Investigation (FBI) disclosed today that it infiltrated the world’s second most prolific ransomware gang, a Russia-based criminal group known as ALPHV and BlackCat. The FBI said it seized the gang’s darknet website, and released a decryption tool that hundreds of victim companies can use to recover systems. Meanwhile, BlackCat responded by briefly “unseizing” its darknet site with a message promising 90 percent commissions for affiliates who continue to work with the crime group, and open season on everything from hospitals to nuclear power plants.
A slightly modified version of the FBI seizure notice on the BlackCat darknet site (Santa caps added).
Whispers of a possible law enforcement action against BlackCat came in the first week of December, after the ransomware group’s darknet site went offline and remained unavailable for roughly five days. BlackCat eventually managed to bring its site back online, blaming the outage on equipment malfunctions.
But earlier today, the BlackCat website was replaced with an FBI seizure notice, while federal prosecutors in Florida released a search warrant explaining how FBI agents were able to gain access to and disrupt the group’s operations.
A statement on the operation from the U.S. Department of Justice says the FBI developed a decryption tool that allowed agency field offices and partners globally to offer more than 500 affected victims the ability to restore their systems.
“With a decryption tool provided by the FBI to hundreds of ransomware victims worldwide, businesses and schools were able to reopen, and health care and emergency services were able to come back online,” Deputy Attorney General Lisa O. Monaco said. “We will continue to prioritize disruptions and place victims at the center of our strategy to dismantle the ecosystem fueling cybercrime.”
The DOJ reports that since BlackCat’s formation roughly 18 months ago, the crime group has targeted the computer networks of more than 1,000 victim organizations. BlackCat attacks usually involve encryption and theft of data; if victims refuse to pay a ransom, the attackers typically publish the stolen data on a BlackCat-linked darknet site.
BlackCat formed by recruiting operators from several competing or disbanded ransomware organizations — including REvil, BlackMatter and DarkSide. The latter group was responsible for the Colonial Pipeline attack in May 2021 that caused nationwide fuel shortages and price spikes.
Like many other ransomware operations, BlackCat operates under the “ransomware-as-a-service” model, where teams of developers maintain and update the ransomware code, as well as all of its supporting infrastructure. Affiliates are incentivized to attack high-value targets because they generally reap 60-80 percent of any payouts, with the remainder going to the crooks running the ransomware operation.
BlackCat was able to briefly regain control over their darknet server today. Not long after the FBI’s seizure notice went live the homepage was “unseized” and retrofitted with a statement about the incident from the ransomware group’s perspective.
The message that was briefly on the homepage of the BlackCat ransomware group this morning. Image: @GossiTheDog.
BlackCat claimed that the FBI’s operation only touched a portion of its operations, and that as a result of the FBI’s actions an additional 3,000 victims will no longer have the option of receiving decryption keys. The group also said it was formally removing any restrictions or discouragement against targeting hospitals or other critical infrastructure.
“Because of their actions, we are introducing new rules, or rather, we are removing ALL rules except one, you cannot touch the CIS [a common restriction against attacking organizations in Russia or the Commonwealth of Independent States]. You can now block hospitals, nuclear power plants, anything, anywhere.”
The crime group also said it was setting affiliate commissions at 90 percent, presumably to attract interest from potential affiliates who might otherwise be spooked by the FBI’s recent infiltration. BlackCat also promised that all “advertisers” under this new scheme would manage their affiliate accounts from data centers that are completely isolated from each other.
BlackCat’s darknet site currently displays the FBI seizure notice. But as BleepingComputer founder Lawrence Abrams explained on Mastodon, both the FBI and BlackCat have the private keys associated with the Tor hidden service URL for BlackCat’s victim shaming and data leak site.
“Whoever is the latest to publish the hidden service on Tor (in this case the BlackCat data leak site), will resume control over the URL,” Abrams said. “Expect to see this type of back and forth over the next couple of days.”
The DOJ says anyone with information about BlackCat affiliates or their activities may be eligible for up to a $10 million reward through the State Department’s “Rewards for Justice” program, which accepts submissions through a Tor-based tip line (visiting the site is only possible using the Tor browser).
Further reading: CISA StopRansomware Alert on the tools, techniques and procedures used by ALPHV/BlackCat.
The U.S. Department of Justice (DOJ) recently revised its policy on charging violations of the Computer Fraud and Abuse Act (CFAA), a 1986 law that remains the primary statute by which federal prosecutors pursue cybercrime cases. The new guidelines state that prosecutors should avoid charging security researchers who operate in “good faith” when finding and reporting vulnerabilities. But legal experts continue to advise researchers to proceed with caution, noting the new guidelines can’t be used as a defense in court, nor are they any kind of shield against civil prosecution.
In a statement about the changes, Deputy Attorney General Lisa O. Monaco said the DOJ “has never been interested in prosecuting good-faith computer security research as a crime,” and that the new guidelines “promote cybersecurity by providing clarity for good-faith security researchers who root out vulnerabilities for the common good.”
What constitutes “good faith security research?” The DOJ’s new policy (PDF) borrows language from a Library of Congress rulemaking (PDF) on the Digital Millennium Copyright Act (DMCA), a similarly controversial law that criminalizes production and dissemination of technologies or services designed to circumvent measures that control access to copyrighted works. According to the government, good faith security research means:
“…accessing a computer solely for purposes of good-faith testing, investigation, and/or correction of a security flaw or vulnerability, where such activity is carried out in a manner designed to avoid any harm to individuals or the public, and where the information derived from the activity is used primarily to promote the security or safety of the class of devices, machines, or online services to which the accessed computer belongs, or those who use such devices, machines, or online services.”
“Security research not conducted in good faith — for example, for the purpose of discovering security holes in devices, machines, or services in order to extort the owners of such devices, machines, or services — might be called ‘research,’ but is not in good faith.”
The new DOJ policy comes in response to a Supreme Court ruling last year in Van Buren v. United States (PDF), a case involving a former police sergeant in Florida who was convicted of CFAA violations after a friend paid him to use police resources to look up information on a private citizen.
But in an opinion authored by Justice Amy Coney Barrett, the Supreme Court held that the CFAA does not apply to a person who obtains electronic information that they are otherwise authorized to access and then misuses that information.
Orin Kerr, a law professor at University of California, Berkeley, said the DOJ’s updated policy was expected given the Supreme Court ruling in the Van Buren case. Kerr noted that while the new policy says one measure of “good faith” involves researchers taking steps to prevent harm to third parties, what exactly those steps might constitute is another matter.
“The DOJ is making clear they’re not going to prosecute good faith security researchers, but be really careful before you rely on that,” Kerr said. “First, because you could still get sued [civilly, by the party to whom the vulnerability is being reported], but also the line as to what is legitimate security research and what isn’t is still murky.”
Kerr said the new policy also gives CFAA defendants no additional cause for action.
“A lawyer for the defendant can make the pitch that something is good faith security research, but it’s not enforceable,” Kerr said. “Meaning, if the DOJ does bring a CFAA charge, the defendant can’t move to dismiss it on the grounds that it’s good faith security research.”
Kerr added that he can’t think of a CFAA case where this policy would have made a substantive difference.
“I don’t think the DOJ is giving up much, but there’s a lot of hacking that could be covered under good faith security research that they’re saying they won’t prosecute, and it will be interesting to see what happens there,” he said.
The new policy also clarifies other types of potential CFAA violations that are not to be charged. Most of these include violations of a technology provider’s terms of service, and here the DOJ says “violating an access restriction contained in a term of service are not themselves sufficient to warrant federal criminal charges.” Some examples include:
-Embellishing an online dating profile contrary to the terms of service of the dating website;
-Creating fictional accounts on hiring, housing, or rental websites;
-Using a pseudonym on a social networking site that prohibits them;
-Checking sports scores or paying bills at work.
Kerr’s warning about the dangers that security researchers face from civil prosecution is well-founded. KrebsOnSecurity regularly hears from security researchers seeking advice on how to handle reporting a security vulnerability or data exposure. In most of these cases, the researcher isn’t worried that the government is going to come after them: It’s that they’re going to get sued by the company responsible for the security vulnerability or data leak.
Often these conversations center around the researcher’s desire to weigh the rewards of gaining recognition for their discoveries with the risk of being targeted with costly civil lawsuits. And almost just as often, the source of the researcher’s unease is that they recognize they might have taken their discovery just a tad too far.
Here’s a common example: A researcher finds a vulnerability in a website that allows them to individually retrieve every customer record in a database. But instead of simply polling a few records that could be used as a proof-of-concept and shared with the vulnerable website, the researcher decides to download every single file on the server.
Not infrequently, there is also concern because at some point the researcher suspected that their automated activities might have actually caused stability or uptime issues with certain services they were testing. Here, the researcher is usually concerned about approaching the vulnerable website or vendor because they worry their activities may already have been identified internally as some sort of external cyberattack.
What do I take away from these conversations? Some of the most trusted and feared security researchers in the industry today gained that esteem not by constantly taking things to extremes and skirting the law, but rather by publicly exercising restraint in the use of their powers and knowledge — and by being effective at communicating their findings in a way that maximizes the help and minimizes the potential harm.
If you believe you’ve discovered a security vulnerability or data exposure, try to consider first how you might defend your actions to the vulnerable website or vendor before embarking on any automated or semi-automated activity that the organization might reasonably misconstrue as a cyberattack. In other words, try as best you can to minimize the potential harm to the vulnerable site or vendor in question, and don’t go further than you need to prove your point.
Millions of U.S. government employees and contractors have been issued a secure smart ID card that enables physical access to buildings and controlled spaces, and provides access to government computer networks and systems at the cardholder’s appropriate security level. But many government employees aren’t issued an approved card reader device that lets them use these cards at home or remotely, and so turn to low-cost readers they find online. What could go wrong? Here’s one example.
A sample Common Access Card (CAC). Image: Cac.mil.
KrebsOnSecurity recently heard from a reader — we’ll call him “Mark” because he wasn’t authorized to speak to the press — who works in IT for a major government defense contractor and was issued a Personal Identity Verification (PIV) government smart card designed for civilian employees. Not having a smart card reader at home and lacking any obvious guidance from his co-workers on how to get one, Mark opted to purchase a $15 reader from Amazon that said it was made to handle U.S. government smart cards.
The USB-based device Mark settled on is the first result that currently comes up one when searches on Amazon.com for “PIV card reader.” The card reader Mark bought was sold by a company called Saicoo, whose sponsored Amazon listing advertises a “DOD Military USB Common Access Card (CAC) Reader” and has more than 11,700 mostly positive ratings.
The Common Access Card (CAC) is the standard identification for active duty uniformed service personnel, selected reserve, DoD civilian employees, and eligible contractor personnel. It is the principal card used to enable physical access to buildings and controlled spaces, and provides access to DoD computer networks and systems.
Mark said when he received the reader and plugged it into his Windows 10 PC, the operating system complained that the device’s hardware drivers weren’t functioning properly. Windows suggested consulting the vendor’s website for newer drivers.
The Saicoo smart card reader that Mark purchased. Image: Amazon.com
So Mark went to the website mentioned on Saicoo’s packaging and found a ZIP file containing drivers for Linux, Mac OS and Windows:
Image: Saicoo
Out of an abundance of caution, Mark submitted Saicoo’s drivers file to Virustotal.com, which simultaneously scans any shared files with more than five dozen antivirus and security products. Virustotal reported that some 43 different security tools detected the Saicoo drivers as malicious. The consensus seems to be that the ZIP file currently harbors a malware threat known as Ramnit, a fairly common but dangerous trojan horse that spreads by appending itself to other files.
Image: Virustotal.com
Ramnit is a well-known and older threat — first surfacing more than a decade ago — but it has evolved over the years and is still employed in more sophisticated data exfiltration attacks. Amazon said in a written statement that it was investigating the reports.
“Seems like a potentially significant national security risk, considering that many end users might have elevated clearance levels who are using PIV cards for secure access,” Mark said.
Mark said he contacted Saicoo about their website serving up malware, and received a response saying the company’s newest hardware did not require any additional drivers. He said Saicoo did not address his concern that the driver package on its website was bundled with malware.
In response to KrebsOnSecurity’s request for comment, Saicoo sent a somewhat less reassuring reply.
“From the details you offered, issue may probably caused by your computer security defense system as it seems not recognized our rarely used driver & detected it as malicious or a virus,” Saicoo’s support team wrote in an email.
“Actually, it’s not carrying any virus as you can trust us, if you have our reader on hand, please just ignore it and continue the installation steps,” the message continued. “When driver installed, this message will vanish out of sight. Don’t worry.”
Saicoo’s response to KrebsOnSecurity.
The trouble with Saicoo’s apparently infected drivers may be little more than a case of a technology company having their site hacked and responding poorly. Will Dormann, a vulnerability analyst at CERT/CC, wrote on Twitter that the executable files (.exe) in the Saicoo drivers ZIP file were not altered by the Ramnit malware — only the included HTML files.
Dormann said it’s bad enough that searching for device drivers online is one of the riskiest activities one can undertake online.
“Doing a web search for drivers is a VERY dangerous (in terms of legit/malicious hit ratio) search to perform, based on results of any time I’ve tried to do it,” Dormann added. “Combine that with the apparent due diligence of the vendor outlined here, and well, it ain’t a pretty picture.”
But by all accounts, the potential attack surface here is enormous, as many federal employees clearly will purchase these readers from a myriad of online vendors when the need arises. Saicoo’s product listings, for example, are replete with comments from customers who self-state that they work at a federal agency (and several who reported problems installing drivers).
A thread about Mark’s experience on Twitter generated a strong response from some of my followers, many of whom apparently work for the U.S. government in some capacity and have government-issued CAC or PIV cards.
Two things emerged clearly from that conversation. The first was general confusion about whether the U.S. government has any sort of list of approved vendors. It does. The General Services Administration (GSA), the agency which handles procurement for federal civilian agencies, maintains a list of approved card reader vendors at idmanagement.gov (Saicoo is not on that list). [Thanks to @MetaBiometrics and @shugenja for the link!]
The other theme that ran through the Twitter discussion was the reality that many people find buying off-the-shelf readers more expedient than going through the GSA’s official procurement process, whether it’s because they were never issued one or the reader they were using simply no longer worked or was lost and they needed another one quickly.
“Almost every officer and NCO [non-commissioned officer] I know in the Reserve Component has a CAC reader they bought because they had to get to their DOD email at home and they’ve never been issued a laptop or a CAC reader,” said David Dixon, an Army veteran and author who lives in Northern Virginia. “When your boss tells you to check your email at home and you’re in the National Guard and you live 2 hours from the nearest [non-classified military network installation], what do you think is going to happen?”
Interestingly, anyone asking on Twitter about how to navigate purchasing the right smart card reader and getting it all to work properly is invariably steered toward militarycac.com. The website is maintained by Michael Danberry, a decorated and retired Army veteran who launched the site in 2008 (its text and link-heavy design very much takes one back to that era of the Internet and webpages in general). His site has even been officially recommended by the Army (PDF). Mark shared emails showing Saicoo itself recommends militarycac.com.
Image: Militarycac.com.
“The Army Reserve started using CAC logon in May 2006,” Danberry wrote on his “About” page. “I [once again] became the ‘Go to guy’ for my Army Reserve Center and Minnesota. I thought Why stop there? I could use my website and knowledge of CAC and share it with you.”
Danberry did not respond to requests for an interview — no doubt because he’s busy doing tech support for the federal government. The friendly message on Danberry’s voicemail instructs support-needing callers to leave detailed information about the issue they’re having with CAC/PIV card readers.
Dixon said Danberry has “done more to keep the Army running and connected than all the G6s [Army Chief Information Officers] put together.”
In many ways, Mr. Danberry is the equivalent of that little known software developer whose tiny open-sourced code project ends up becoming widely adopted and eventually folded into the fabric of the Internet. I wonder if he ever imagined 15 years ago that his website would one day become “critical infrastructure” for Uncle Sam?
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