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The New Russian Hack Sanctions

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The Treasury Department issued new Russian sanctions today, partly fulfilling the congressionally-mandated requirement it do so, but also adding to the retaliatory sanctions President Obama imposed in December 2016. Effectively, this applied the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA) sanctions ordered by Congress to the Russian spooks (but not the private hackers) Obama sanctioned, and applies the Obama EO-based sanctions to the Russians and companies listed in the Internet Research Agency indictment.

The breadth of accused activities

Given the limited number of people actually newly sanctioned (and the symbolic nature of sanctions imposed on people who are unlikely to travel to or have money in the US), this may be just Steve Mnuchin’s effort to buy time for the Administration; the Treasury press release even includes a promise for more CAATSA sanctions at a later date.

“The Administration is confronting and countering malign Russian cyber activity, including their attempted interference in U.S. elections, destructive cyber-attacks, and intrusions targeting critical infrastructure,” said Treasury Secretary Steven T. Mnuchin. “These targeted sanctions are a part of a broader effort to address the ongoing nefarious attacks emanating from Russia. Treasury intends to impose additional CAATSA sanctions, informed by our intelligence community, to hold Russian government officials and oligarchs accountable for their destabilizing activities by severing their access to the U.S. financial system.”

That said, the press release for the sanctions is rather interesting in the breadth of activities these sanctions are said to be retaliation for. It includes the election hack, the NotPetya attack recently attributed to GRU (the rough equivalent to DIA) by the UK and US, and ongoing attacks on American critical infrastructure. (DHS and FBI issued a report on the latter.)

Today’s action counters Russia’s continuing destabilizing activities, ranging from interference in the 2016 U.S. election to conducting destructive cyber-attacks, including the NotPetya attack, a cyber-attack attributed to the Russian military on February 15, 2018 in statements released by the White House and the British Government. This cyber-attack was the most destructive and costly cyber-attack in history. The attack resulted in billions of dollars in damage across Europe, Asia, and the United States, and significantly disrupted global shipping, trade, and the production of medicines. Additionally, several hospitals in the United States were unable to create electronic records for more than a week.

Since at least March 2016, Russian government cyber actors have also targeted U.S. government entities and multiple U.S. critical infrastructure sectors, including the energy, nuclear, commercial facilities, water, aviation, and critical manufacturing sectors. Indicators of compromise, and technical details on the tactics, techniques, and procedures, are provided in the recent technical alert issued by the Department of Homeland Security and Federal Bureau of Investigation.

The move happens to come when the White House issued both a formal statement joining European allies in pinning the attempted assassination of former GRU officer Sergei Skripal on Russia and Trump endorsing that view in statements to the press.

FSB not SVR sanctions

In addition to not resanctioning the private individuals named in December 2016, today’s sanctions are interesting in that they continue to blame FSB (a more thuggish equivalent of FBI) alongside GRU for the hack. I described why the inclusion of FSB was interesting here.

But it’s interesting for another reason: recent reporting. Both Dutch reporting on how its intelligence service caught Russian hackers in real time and a recent David Sanger article have instead credited SVR (the rough equivalent of CIA) with the hack. The head of SVR is already sanctioned, but it would seem that if the most up to date intelligence says SVR did the hack, they might be included here.

Two new GRU sanctionees — of the age they might have overlapped with Skripal

The sanctions also add two new GRU officers described only as senior GRU officers.

AFANASYEV, Sergei (a.k.a. AFANASYEV, Sergey), Russia; DOB 16 May 1963; Gender Male (individual) [CAATSA – RUSSIA] (Linked To: MAIN INTELLIGENCE DIRECTORATE).

MOLCHANOV, Grigoriy Viktorovich; DOB 01 Jan 1956 to 31 Dec 1956; citizen Russia; Gender Male (individual) [CAATSA – RUSSIA] (Linked To: MAIN INTELLIGENCE DIRECTORATE).

At roughly 55 and 62, these guys may have overlapped with Skripal (as would the others, whom the US obviously has more information on).

The last known dates

Perhaps most interesting, however, the Treasury press release description of the targeted GRU officers includes fascinating “as of” dates that would seem to indicate the last time it’s willing to admit we’ve gotten intelligence on these people.

Korobov came to the US in late January (and he’s a public figure that our own intelligence services would coordinate with), so it’s unsurprising his information is the most up-to-date, to that same time.

But we apparently (admit to having) more recent data, dating to last February, on one of the people newly added to this list — Afanasyev — than on the First Deputies originally sanctioned. That precedes the NotPetya activity being sanctioned here.

Most interesting is Molchanov. We not only don’t have passport information for him (though that’s not definitive, as none of the IRA people have passports listed, and we must have passport numbers for the ones that traveled to the US), but we don’t even have a solid date of birth. The “as of” date for him, April 2016, comes before the DNC hack was public, but around the time George Papadopoulos was learning about it. It also comes from before the sanctions in December 2016. Clearly, we’ve learned something about him since then that has won him significantly more focus, even if we don’t know when to send his birthday greetings.

These two new additions are both pretty old to be doing any hacking themselves (indeed, they’re contemporaries of all the top brass). But their addition may suggest we’ve learned more about how GRU’s hacking operates.

[Photo: National Security Agency, Ft. Meade, MD via Wikimedia]

Companies Victimized by Repurposed NSA Tools Don’t Share Those Details with Government

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Reporting on an appearance by acting DHS undersecretary for the National Protection and Programs Directorate Christopher Krebs, CyberScoop explains that the government only heard from six victims of the WannaCry and NotPetya ransomware outbreaks (two known major victims are Maersk shipping, which had to shut down multiple terminals in the US, and the US law firm DLA Piper).

Christopher Krebs, acting undersecretary for the National Protection and Programs Directorate, told an audience of cybersecurity professionals Wednesday that the biggest issue with both incidents came from an absence of reports from businesses who were affected. While experts say that WannaCry and NotPetya disrupted business operations at American companies, it’s not clear how many enterprises were damaged or to what degree.

The government wanted to collect more information from affected companies in order to better assess the initial infection vector, track the spread of the virus and develop ways to deter similar future attacks.

Collecting data from victim organizations was important, a senior U.S. official who spoke on condition of anonymity told CyberScoop, because the information could have been used to inform policymakers about the perpetrator of the attack and potential responses

The rest of the story explains that private companies are generally reluctant to share details of being a ransomware victim (particularly if a company pays the ransom, there are even legal reasons for that).

But it doesn’t consider another factor. If a cop left his gun lying around and some nutjob stole the gun and killed a kid with it, how likely is that family going to trust the cop in question, who indirectly enabled the murder?

The same problem exists here. Having proven unable to protect its own powerful tools (this is more a factor in WannaCry than NotPetya, though it took some time before people understood that the latter didn’t rely primarily on the NSA’s exploit), the government as a whole may be deemed less trustworthy on efforts to respond to the attack.

Whether that was the intent or just a handy side benefit for the perpetrators of WannaCry (and of Shadow Brokers, who released the exploit) remains unclear. But the effect is clear: attacking people with NSA tools may undermine the credibility of the government, and in the process, its ability to respond to attacks.

[Photo: National Security Agency, Ft. Meade, MD via Wikimedia]

Rick Ledgett’s Straw Malware

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For some reason, over a month after NotPetya and almost two months after WannaCry, former Deputy DIRNSA Rick Ledgett has decided now’s the time to respond to them by inventing a straw man argument denying the need for vulnerabilities disclosure. In the same (opening) paragraph where he claims the malware attacks have revived calls for the government to release all vulnerabilities, he accuses his opponents of oversimplification.

The WannaCry and Petya malware, both of which are partially based on hacking tools allegedly developed by the National Security Agency, have revived calls for the U.S. government to release all vulnerabilities that it holds.  Proponents argue this will allow for the development of patches, which will in turn ensure networks are secure.  On the face of it, this argument might seem to make sense, but it is actually a gross oversimplification of the problem, would not have the desired effect, and would in fact be dangerous.

Yet it’s Ledgett who is oversimplifying. What most people engaging in the VEP debate — even before two worms based, in part, on tools stolen from NSA — have asked for is for some kind of sense and transparency on the process by which NSA reviews vulnerabilities for disclosure. Ledgett instead poses his opponents as absolutists, asking for everything to be disclosed.

Ledgett then spends part of his column claiming that WannaCry targeted XP.

Users agree to buy the software “as is” and most software companies will attempt to patch vulnerabilities as they are discovered, unless the software has been made obsolete by the company, as was the case with Windows XP that WannaCry exploited.

[snip]

Customers who buy software should expect to have to patch it and update it to new versions periodically.

Except multiple reports said that XP wasn’t the problem, Windows 7 was. Ledgett’s mistake is all the more curious given reports that EternalBlue was blue screening at NSA when — while he was still at the agency — it was primarily focused on XP. That is, Ledgett is one of the people who might have expected WannaCry to crash XP; that he doesn’t even when I do doesn’t say a lot for NSA’s oversight of its exploits.

Ledgett then goes on to claim that WannaCry was a failed ransomware attack, even though that’s not entirely clear.

At least he understands NotPetya better, noting that the NSA component of that worm was largely a shiny object.

In fact, the primary damage caused by Petya resulted from credential theft, not an exploit.

The most disturbing part of Ledgett’s column, however, is that it takes him a good eight (of nine total) paragraphs to get around to addressing what really has been the specific response to WannaCry and NotPetya, a response shared by people on both sides of the VEP debate: NSA needs to secure its shit.

Some have made the analogy that the alleged U.S. government loss of control of their software tools is tantamount to losing control of Tomahawk missile systems, with the systems in the hands of criminal groups threatening to use them.  While the analogy is vivid, it incorrectly places all the fault on the government.  A more accurate rendering would be a missile in which the software industry built the warhead (vulnerabilities in their products), their customers built the rocket motor (failing to upgrade and patch), and the ransomware is the guidance system.

We are almost a full year past the day ShadowBrokers first came on the scene, threatening to leak NSA’s tools. A recent CyberScoop article suggests that, while government investigators now have a profile they believe ShadowBrokers matches, they’re not even entirely sure whether they’re looking for a disgruntled former IC insider, a current employee, or a contractor.

The U.S. government’s counterintelligence investigation into the so-called Shadow Brokers group is currently focused on identifying a disgruntled, former U.S. intelligence community insider, multiple people familiar with the matter told CyberScoop.

[snip]

While investigators believe that a former insider is involved, the expansive probe also spans other possibilities, including the threat of a current intelligence community employee being connected to the mysterious group.

[snip]

It’s not clear if the former insider was once a contractor or in-house employee of the secretive agency. Two people familiar with the matter said the investigation “goes beyond” Harold Martin, the former Booz Allen Hamilton contractor who is currently facing charges for taking troves of classified material outside a secure environment.

At least some of Shadow Brokers’ tools were stolen after Edward Snowden walked out of NSA Hawaii with the crown jewels, at a time when Rick Ledgett, personally, was leading a leak investigation into NSA’s vulnerabilities. And yet, over three years after Snowden stole his documents, the Rick Ledgett-led NSA still had servers sitting unlocked in their racks, still hadn’t addressed its privileged user issues.

Rick Ledgett, the guy inventing straw man arguments about absolutist VEP demands is a guy who’d do the country far more good if he talked about what NSA can do to lock down its shit — and explained why that shit didn’t get locked down when Ledgett was working on those issues specifically.

But he barely mentions that part of the response to WannaCry and NotPetya.

Nyetya: Sanctions and Taxes

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In my first post on the Nyetya/NotPetya attack launched in Ukraine last week, I suggested the attack looked a lot like a digital sanctions regime and pointed out that the malware had been compiled not long after the US Senate tried to pass new sanctions.

On June 14, the Senate passed some harsh new sanctions on Russia, ostensibly just for Russia’s Ukrainian and Syrian related actions, not for its tampering in last year’s US election. The House mucked up that bill, but the Senate will continue to try to impose new sanctions. Trump might well veto the sanctions, but that will cause him a great deal of political trouble amid the Russian investigation.

The Petya/NotPetya malware was compiled on June 18.

Update: I should add that Treasury added a bunch of people to its Ukraine-related sanctions list on June 20.

In her first post on it, Rayne focused on how the loss of MEDoc’s tax software might effect payments in Ukraine (though she remained open about other attackers besides Russia).

But the US wasn’t the only country that has moved towards imposing new sanctions on Russia. Ukraine did so too, back on May 15. Petro Poroshenko targeted a number of Russian tech brands — most spectacularly, VK, mail.ru, and Yandex, which are among the most popular sites in Ukraine. The Ukrainian president also banned Kaspersky, as American politicians are moving closer to doing. Most interestingly, Poroshenko banned 1C, maybe the equivalent of Microsoft’s Office suite.

A decree by Poroshenko posted late on Monday expanded sanctions adopted over Russia’s annexation of Crimea and backing of separatists in eastern Ukraine to include 468 companies and 1,228 people. Among them were the Russian social networks VK and Odnoklassniki, the email service Mail.ru and the search engine company Yandex, all four of which are in the top 10 most popular sites in Ukraine, according to the web traffic data company Alexa. The decree requires internet providers to block access to the sites for three years.

Poroshenko’s decree also blocked the site of the Russian cybersecurity giant Kaspersky Labs and will ban several major Russian television channels and banks, as well as the popular business software developer 1C.

In a post on his official page on VK, Poroshenko said he had tried to use Russian social networks to fight Russia’s “hybrid war” and propaganda.

1C is a competitor to MEDoc, the patient zero of the attack. (h/t Jeff Vader)

After Poroshenko imposed sanctions, Putin’s spox warned Ukraine had forgotten the principle of reciprocity.

Vladimir Putin’s spokesman told journalists that he wasn’t prepared to say but that Russia had not “forgotten about the principle of reciprocity”.

Now consider these other details.

It turns out that MEDoc had already sent out several malicious updates which backdoored the software and collected the unique business identifier of the victims, as well as credentials.

During our research, we identified a very stealthy and cunning backdoor that was injected by attackers into one of M.E.Doc’s legitimate modules. It seems very unlikely that attackers could do this without access to M.E.Doc’s source code.

The backdoored module has the filename ZvitPublishedObjects.dll. This was written using the .NET Framework. It is a 5MB file and contains a lot of legitimate code that can be called by other components, including the main M.E.Doc executable ezvit.exe.

We examined all M.E.Doc updates that were released during 2017, and found that there are at least three updates that contained the backdoored module:

  • 01.175-10.01.176, released on 14th of April 2017
  • 01.180-10.01.181, released on 15th of May 2017
  • 01.188-10.01.189, released on 22nd of June 2017

The incident with Win32/Filecoder.AESNI.C happened three days after the 10.01.180-10.01.181 update and the DiskCoder.C outbreak happened five days after the 10.01.188-10.01.189 update. Interestingly, four updates from April 24th 2017, through to May 10th 2017, and seven software updates from May 17th 2017, through to June 21st 2017, didn’t contain the backdoored module.

Since the May 15th update did contain the backdoored module and the May 17th update didn’t, here is a hypothesis that could explain low infection Win32/Filecoder.AESNI.C ratio: the release of the May 17th update was an unexpected event for the attackers. They pushed the ransomware on May 18th, but the majority of M.E.Doc users no longer had the backdoored module as they had updated already.

[snip]

Each organization that does business in Ukraine has a unique legal entity identifier called the EDRPOU number (Код ЄДРПОУ). This is extremely important for the attackers: having the EDRPOU number, they could identify the exact organization that is now using the backdoored M.E.Doc. Once such an organization is identified, attackers could then use various tactics against the computer network of the organization, depending on the attackers’ goal(s).

[snip]

Along with the EDRPOU numbers, the backdoor collects proxy and email settings, including usernames and passwords, from the M.E.Doc application.

Note, that May 15 attack was actually earlier in the day, before Poroshenko announced the sanctions against Russia.

Talos used logs it obtained from MEDoc to confirm that it backdoored the victims, collecting data from targeted machines.

But then it makes what I consider a logical jump (albeit an interesting one): invoking something similar that happened with Blackenergy, it argues that the hacker that had backdoored MEDoc has lost the intelligence functionality of the MEDoc back door, so it must have a replacement at the ready. As a result, Talos basically suggests that businesses should treat anything touching Ukraine as if it has or soon will have digital cooties.

In short, the actor has given up the ability to deliver arbitrary code to the 80% of UA businesses that use M.E.Doc as their accounting software, along with any multinational corporations that leveraged the software.  This is a significant loss in operational capability, and the Threat Intelligence and Interdiction team assesses with moderate confidence that it is unlikely that they would have expended this capability without confidence that they now have or can easily obtain similar capability in target networks of highest priority to the threat actor.

Based on this, Talos is advising that any organization with ties to Ukraine treat software like M.E.Doc and systems in Ukraine with extra caution since they have been shown to be targeted by advanced threat actors.  This includes providing them a separate network architecture, increased monitoring and hunting activities in those at-risk systems and networks and allowing only the level of access absolutely necessary to conduct business.  Patching and upgrades should be prioritized on these systems and customers should move to transition these systems to Windows 10, following the guidance from Microsoft on securing those systems.  Additional guidance for network security baselining is available from Cisco as well.  Network IPS should be deployed on connections between international organizations and their Ukrainian branches and endpoint protection should be installed immediately on all Ukrainian systems.

That may be right. But I’m not sure this analysis considers Rayne’s point: that by basically taking out crucial tax software used by 80% of the Ukrainian market (indeed, Ukrainian authorities raided the company in a showy SWAT raid today), you will presumably have some effect on the collection of taxes in Ukraine, something AP’s reporter reporting from Ukraine, Raphael Satter, says he has seen anecdotal evidence of already.

So, sure, the MEDoc attacker lost the back door into 80% of the companies doing business in Ukraine. But the attacker may have hurt Ukraine’s ability to collect taxes, even while destroying the Ukrainian competitor to one of the companies targeted in May, imposing tremendous costs on doing business in Ukraine, and leading security advisors to recommend treating Ukraine like it has cooties going forward.

As with my first post on this, I’m still really just spit balling.

But one thing we know about Russia: it wants to find a way to end the sanctions regimes against it, and helping Donald Trump get elected thus far hasn’t done the trick.

Update: Malware Tech, the guy who sinkholed WannaCry, points to his data showing declining WannaCry infections in Ukraine and Russia, which he says shows the effect of the Nyetya infections replacing WannaCry ones. That suggests the impact in Russia is real, contrary to some public comments.

Update: Bleeping Computers describes victims installing old versions of MEDoc because it is so central to their business operations.

With the M.E.Doc servers down, Bleeping Computer was told that most Ukrainian companies are now sharing older versions of the M.E.Doc software via Google Drive links. The software provided by Intellect Service is so crucial to Ukrainian companies that even after the NotPetya outbreak, many businesses cannot manage their finances without it, despite the looming danger of another incident.

Because of the way the software is currently shared between some usrs, Ukrainian companies are now exposing themselves to even more dangerous threats, such as installing boobytrapped M.E.Doc versions from unofficial sources like Dropbox or Google Drive.

Does Maersk Count as US Critical Infrastructure?

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I Back when Sony Pictures got hacked after Sony Everything Else had been hacked serially over the course of 15 years, the US government declared that multinational studio owned by a Japanese parent US critical infrastructure entitled to heightened cybersecurity protection. That’s one of the bases for which the US imposed sanctions on North Korea. The designation also ramped up the ways in which FBI could help Sony.

The listing of a multinational movie studio as critical infrastructure led many people to understand just how broad the definition of CI is in the US, including (in the same Commercial Facilities Sector) a bunch of things that might better be called soft targets.

  • Entertainment and Media (e.g., motion picture studios, broadcast media).
  • Gaming (e.g., casinos).
  • Lodging (e.g., hotels, motels, conference centers).
  • Outdoor Events (e.g., theme and amusement parks, fairs, campgrounds, parades).
  • Public Assembly (e.g., arenas, stadiums, aquariums, zoos, museums, convention centers).
  • Real Estate (e.g., office and apartment buildings, condominiums, mixed use facilities, self-storage).
  • Retail (e.g., retail centers and districts, shopping malls).
  • Sports Leagues (e.g., professional sports leagues and federations).

That’s when I learned that DHS was on the hook for protecting Yogi Bear Jellystone and KOA campground facilities around the country from cyberattack.

Since 2014, DHS belatedly added one thing to its critical infrastructure designation: elections. Though DHS doesn’t appear to have updated the website to reflect that designation yet (though maybe I’m missing it; I’ll call tomorrow to ask them where it is).

Anyway, the global impact of the NotPetya (which I’ll henceforth call Nyetna, because that’s my favorite name for it) attack, particularly its impact on Danish shipping giant Maersk, has me wondering whether anything Nyetna affected counts as would count as critical infrastructure. The impact on Maersk has had significant effect at several ports in the US.

Danish shipping giant A.P. Moller-Maersk, one of the global companies hardest hit by the malware, said Thursday that most of its terminals are now operational, though some terminals are “operating slower than usual or with limited functionality.”

Problems have been reported across the shippers’ global business, from Mobile, Alabama, to Mumbai in India. When The Associated Press visited the latter city’s Jawaharlal Nehru Port Trust on Thursday, for example, it witnessed several hundred containers piled up at just two yards, out of more than a dozen yards surrounding the port.

“The vessels are coming, the ships are coming, but they are not able to take the container because all the systems are down,” trading and clearing agent Rajeshree Verma told the AP. “The port authorities, they are not able to reply (to) us. The shipping companies they also don’t know what to do. … We are actually in a fix because of all this.”

Probably the most important impact was on Maersk’s terminal in LA.

A cyberattack that infected computers across Europe and then spread into the United States halted operations at the Port of Los Angeles’ largest terminal Tuesday — and raised worries that destructive software could ricochet around the world and disrupt the critical supply chain.

APM Terminals — where Danish shipping carrier A.P. Moller-Maersk operates — turned truckers away all day, as did their terminals in Rotterdam, New York and New Jersey.

So does Maersk, and the 18% of global container shipping business it carries, count as US critical infrastructure?

Given that Maersk, not the several ports affected, is the victim, it’s not clear. Here’s how DHS defines the CI aspect of maritime shipping.

  • Maritime Transportation System consists of about 95,000 miles of coastline, 361 ports, more than 25,000 miles of waterways, and intermodal landside connections that allow the various modes of transportation to move people and goods to, from, and on the water.

But if Sony can count as US CI, it seems Maersk (or any comparable shipping giant) should as well.

It may not matter, as the Executive Branch seems to be hiding even further under their bed than they were after the WannaCry attack, with this being the one mention of the hack from the White House.

SECRETARY PERRY:  So let’s get over on the grid.  Obviously, the Department of Energy has a both scientific, they have a historic reason to be involved with that.  One is that, at one of our national labs, we have a test grid of which we are able to go out — one of the reasons that the Department of Homeland Security and DOE is involved with grid security is that DOE operates a substantial grid — a test grid, if you will — where we can go out and actually break things.  We can infest it with different viruses and what have you to be able to analyze how we’re going to harden our grid so that Americans can know that our country is doing everything that it can to protect, defend this country against either cyberattacks that would affect our electrical security or otherwise.

So the ability for us to be able to continue to lead the world — I think we all know the challenges.  We saw the reports as late as today of what’s going on in Ukraine.  And so protecting this country, its grid against not just cyber, but also against physical attacks, against attacks that may come from Mother Nature, weather-related events — all of that is a very important part of what DOE, DHS is doing together.

DHS is preoccupied rolling out Muslim Ban 3.0 and other flight restrictions.

By all appearances, Nyetna primarily targeted Ukraine. But in hitting Ukraine, it significantly disabled one of the key cogs to the global economy, the world’s biggest container shipping company. Does that count as an attack on the US, or at least its critical infrastructure?

Update: I’ve confirmed that “shipping lines” are included in Maritime Transportation. So Maersk would seem to count as critical infrastructure.

 

Minority Report: An Alternative Look at NotPetya

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NB: Before reading:

1) Check the byline — this is NotMarcy;

2) Some of this content is speculative;

3) This is a minority report; I’m not on the same paragraph and perhaps not the same page with Marcy.

Tuesday’s ‘Petya/Petna/NotPetya’ malware attacks generated a lot of misleading information and rapid assumptions. Some of the fog can be rightfully blamed on the speed and breadth of infection. Some of it can also be blamed on the combined effect of information security professionals discussing in-flight attacks in full view of the public who make too many assumptions.

There’s also the possibility that some of the confusing information may have been deliberately generated to thwart too-early intervention. If this isn’t criminal hacking but cyber warfare, propaganda should be expected as in all other forms of warfare. Flawed assumptions, too, can be weaponized.

A key assumption worth re-examining is that Ukraine was NotPetya’s primary target rather than collateral damage.

After the malware completed its installation and rebooted an infected machine, a message indicated files had been encrypted and payment could be offered for decryption.

Thousands of dollars were paid $300 at a time in cryptocurrency but a decryption key wouldn’t be forthcoming. Users who tried to pay the ransom found the contact email address hosted by Posteo.net had been terminated. The email service company was unhelpful bordering on outright hostile in its refusal to assist users contacting the email account holder. It looked like a ransom scam gone very wrong.

As Marcy noted in her earlier post on NotPetyna, information security expert Matt Suiche posted that NotPetya was a wiper and not ransomware. The inability of affected users to obtain decryption code suddenly made perfect sense. ‘Encrypted’ files are never going to be opened again.

It’s important to think about the affected persons and organizations and how they likely responded to the infection. If they didn’t already have a policy in place for dealing with ransomware, they may have had impromptu meetings about their approach; they had to buy cryptocurrency, which may have required a crash DIY course in how to acquire it and how to make a payment — scrambling under the assumption they were dealing with ransomware.

It all began sometime after 10:30 UTC/GMT — 11:30 a.m. London (BDT), 1:30 p.m. Kyiv and Moscow local time, even later in points across Russia farther east.

(And 4:30 a.m. EDT — well ahead of the U.S. stock market, early enough for certain morning Twitter users to tweet about the attack before America’s work day began.)

The world’s largest shipping line, Maersk, and Russia’s largest taxpayer and oil producer Rosneft tweeted about the attack less than two hours after it began.

By the end of the normal work day in Ukraine time, staff would only have just begun to deal with the ugly truth that the ransom may have been handed off and no decryption key was coming.

As Marcy noted, June 28th is a public holiday in Ukraine — Constitution Day. I hope IT folks there didn’t have a full backup scheduled to run going into the holiday evening — one that might overwrite a previous full backup.

The infection’s spread rate suggested early on that email was not the only means of transmission, if it had been spread at all by spearfishing. But many information security folks advocated not opening any links in email. A false sense of security may have aided the malware’s dispersion; users may have thought, “I’m not clicking on anything, I can’t get it!” while their local area network was being compromised.

And then it hit them. While affected users sat at their machines reading fake messages displayed by the malware, scrambling to get cryptocurrency for the ransom, NotPetya continued to encrypt files under their noses and spread across business’s local area networks. Here’s where Microsoft’s postmortem is particularly interesting; it not only gives a tick-tock of the malware’s attack on a system, but it lists the file formats encrypted.

Virtually everything a business would use day to day was encrypted, from Office files to maps, website files to emails, zip archives and backups.

Oh, and Oracle files. Remember Oracle pushed a 299 vulnerability mega-patch on April 19, days after ShadowBrokers dumped some NSA tools? Convenient, that; these vulnerabilities were no longer a line of attack except through file encryption.

While information security experts have done a fine job tackling a many-headed hydra ravaging businesses, they made some rather broad assumptions about the reason for the attack. Kaspersky concluded the target was Ukraine since ~60% of infected devices were located there though 30% were located in Russia. But the malware’s aim may not have been the machines or even the businesses affected in Ukraine.

What did those businesses do? What they did required tax application software MEDoc. If the taxes to be calculated were based on business’s profits — (how much did they make) X (tax rate) — they hardly needed tax software. A simple spreadsheet would suffice, or the calculation would be built into accounting software.

No, the businesses affected by the malware pushed at 10:30 GMT via MEDoc update would be those which sold goods or services frequently, on which sales tax would have been required for each transaction.

What happens when a business’s sales can’t be documented? What happens when their purchases can’t be documented, either?

Which brings me to the affected Russian businesses, specifically Rosneft. There’s not much news published in English detailing the impact on Rosneft; we’ve only got Kaspersky’s word that 30% of infections affected Russian machines.

But if Rosneft is the largest public oil company in the world, Russia’s largest taxpayer as Rosneft says on their Twitter profile, it may not take very many infections to wreak considerable damage on the Russian economy. Consider the ratio of one machine invoicing the shipment of entire ocean tanker of oil versus many machines billing heating oil in household-sized quantities.

And if Rosneft oil was bought by Ukraine and resold to the EU, Ukraine’s infected machines would cause a delay of settlements to Russia especially when Rosneft must restore its own machines to make claims on Ukrainian customers.

The other interesting detail in this malware story is that the largest container line in the world, Maersk, was also affected. You may have seen shipping containers on trucks, trains, in shipyards and on ships marked in bold block letters, MAERSK. What you probably haven’t seen is Maersk’s energy transport business.

This includes shipping oil.

It’s not Ukraine’s oil Maersk ships; most of what Ukraine sells is through pipelines running from Russia in the east and mostly toward EU nations in the west.

It’s Russian oil, probably Rosneft’s, shipping overseas. If it’s not in Maersk container vessels, it may be moving through Maersk-run terminal facilities. And if Maersk has no idea what is shipping, where it’s located, when it will arrive, it will have a difficult time settling up with Rosneft.

Maersk also does oil drilling — it’s probably not Ukraine to whom Maersk may lease equipment or contract its services.

Give the potential damage to Russia’s financial interests, it seems odd that Ukraine is perceived as the primary target.

 

NotPetya’s attack didn’t happen in a vacuum, either.

A report in Germany’s Die Welt reported the assassination of Ukraine’s chief of intelligence by car bomb. The explosion happened about the same time that Ukraine’s central bank reported it had been affected by NotPetya — probably a couple hours after 10:30 a.m. GMT.

On Monday, privately-owned Russian conglomerate Sistema had a sizable chunk of assets “arrested” — not seized, but halted from sale or trading — due to a dispute with Rosneft over $2.8 billion dollars. Rosneft claims Sistema owes it money from the acquisition of oil producer Bashneft, owned by Sistema until 2014. Some of the assets seized included part of mobile communications company MTS. It’s likely this court case Rosneft referred to in its first tweet related to NotPetya.

The assassination’s timing makes the cyber attack look more like NotPetya was a Russian offensive, but why would Russia damage its largest sources of income and mess with its cash flow? The lawsuit against Sistema makes Rosneft appear itchy for income — Bashneft had been sold to the state in 2014, then Rosneft bought it from the state last year. Does Rosneft need this cash after the sale (or transfer) of a 19.5% stake worth $10.2 billion last year?

Worth noting here that Qatar’s sovereign wealth fund financed the bulk of the deal; commodities trader Glencore only financed 300 million euros of this transaction. How does the rift between other Middle Eastern oil states and Qatar affect the value of its sovereign wealth fund?

In her previous post, Marcy spitballed about digital sanctions — would they look like NotPetya? I think so. I can’t help recall this bit at the end of the Washington Post’s opus on Russian election interference published last week on June 23:

But Obama also signed the secret finding, officials said, authorizing a new covert program involving the NSA, CIA and U.S. Cyber Command.

[…]

The cyber operation is still in its early stages and involves deploying “implants” in Russian networks deemed “important to the adversary and that would cause them pain and discomfort if they were disrupted,” a former U.S. official said.

The implants were developed by the NSA and designed so that they could be triggered remotely as part of retaliatory cyber-strike in the face of Russian aggression, whether an attack on a power grid or interference in a future presidential race.

I’m sure it’s just a coincidence that NotPetya launched Tuesday this week. This bit reported in Fortune is surely a coincidence, too:

The timing and initial target of the attack, MeDoc, is sure to provoke speculation that an adversary of Ukraine might be to blame. The ransomware hid undetected for five days before being triggered a day before a public Ukrainian holiday that celebrates the nation’s ratification of a new constitution in 1996.

“Last night in Ukraine, the night before Constitution Day, someone pushed the detonate button,” said Craig Williams, head of Cisco’s (CSCO, +1.07%) Talos threat intelligence unit. “That makes this more of a political statement than just a piece of ransomware.” [boldface mine]

Indeed.

Two more things before this post wraps: did anybody notice there has been little discussion about attribution due to characters, keyboards, language construction in NotPetya’s code? Are hackers getting better at producing code without tell-tale hints?

Did the previous attacks based on tools released by the Shadow Brokers have secondary — possibly even primary — purposes apart from disruption and extortion? Were they intended to inoculate enterprise and individual users before a destructive weapon like NotPetya was released? Were there other purposes not obvious to information security professionals?

What Would a Digital Sanctions Regime Relying on Malware Look Like?

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A day ago, the second ransomware based on NSA tools leaked by Shadow Brokers hit. The attack was focused on Ukraine, in large part because “patient zero” appears to be a tax software update for a Ukrainian company M.E.Doc. But global giants include Maersk and Merck were also affected. Russian oil giant Rosneft was affected too, though there are conflicting claims about how badly it was disabled.

A day in, folks still can’t get a grasp on this attack, even down to the name (it started as Petya until security folks determined it’s not the ransomware of the same name, leading to the use of NotPetya).

While using far more attack vectors (and more toys from Shadow Brokers), this attack bears two similarities with last month’s WannaCry attack: the ransom requested $300 to decrypt locked data, and the ransom function was never really designed to work properly.

There is mounting evidence that the #GoldenEye / #Petya ransomware campaign might not have targeted financial gains but rather data destruction.

  • The choice of a regular, non-bulletproof e-mail service provider to act as a communication channel was obviously a wrong decision in terms of business.
  • The lack of automation in the payment & key retrieval process makes it really difficult for the attacking party to honor their end of the promise.
  • There is a total lack of usability in the payment confirmation: the user has to manually type an extremely long, mixed case “personal installation key” + “wallet” is prone to typos.

Update 6/28 06.00 GMT+3

The email address that was used by the threat actors to get payment confirmations has been suspended by Posteo. This means that all payments made overnight will be unable to get validated, and therefore will surely not receive the decryption key. Not that we have ever advised otherwise, but if you’re planning to pay the ransom, stop now. You’ll lose your data anyway, but you’ll contribute in funding the development of new malware. Even so, there have been 15 payments made after the suspension of the e-mail address. The wallet now totals 3.64053686 BTC out of 40 payments, with a net worth of $US 9,000.

Indeed, Matt Suiche argues the attack is better thought of as a wiper attack, designed to destroy rather than lock data, than a ransomware attack.

It will take some time to understand what the attack really is, particularly given the degree to which it appears to masquerade as things it’s not. But for the moment, I want to consider how a similar attack might be used as a counter to sanctions regimes. As far as we currently know, this attack made doing business with Ukraine a very expensive business proposition, as doing business with, say, some oligarchs in Russia is made costly for those subject to US sanctions because have to bank in the US. The attack served as a self-executing investigative method to identify just who had business tax dealing in Ukraine, and imposed an immediate cost. So whether or not that’s what this is, such an attack could be used to counteract sanctions imposed by the international banking community.

Again, I’m just spitballing.

But some dates are of interest.

On June 14, the Senate passed some harsh new sanctions on Russia, ostensibly just for Russia’s Ukrainian and Syrian related actions, not for its tampering in last year’s US election. The House mucked up that bill, but the Senate will continue to try to impose new sanctions. Trump might well veto the sanctions, but that will cause him a great deal of political trouble amid the Russian investigation.

The Petya/NotPetya malware was compiled on June 18.

Microsoft dates the attack to June 27 at 10:30 GMT.

We observed telemetry showing the MEDoc software updater process (EzVit.exe) executing a malicious command-line matching this exact attack pattern on Tuesday, June 27 around 10:30 a.m. GMT.

Today, June 28, is a public holiday in Ukraine, making it more difficult to deal with the attack.

Again, I’m not saying that’s what NotPetya is. I am saying that if you wanted to design a counter to financial sanctions using malware, NotPetya is close to what it’d look like.