News / Asia

China's Cyber Espionage Case a Guide to Hacking

Part of the building of 'Unit 61398', a secretive Chinese military unit accused of cyber espionage in Shanghai
Part of the building of 'Unit 61398', a secretive Chinese military unit accused of cyber espionage in Shanghai
The alleged hacking of U.S. corporate computers by elements of China’s military wasn’t in and of itself all that unique.
 
As cyber attacks go, it was moderately sophisticated in technique.
 
But that raises a more troubling question.
 
How could major international corporations — such as U.S. Steel, Alcoa and others with millions of dollars of intellectual property — get robbed by a small, low-cost group of hackers working from China?
 
The answer: It’s surprising it doesn’t happen more often.
 
Over its 48 pages and 31 counts of criminal misconduct, the U.S. Justice Department’s indictment details how five Chinese army officers, with Internet identities such as “Ugly Gorilla”, “Kandygoo” and “WinXYHappy,” went about infiltrating computer networks of six large U.S. corporations.
 
Sections of the indictment are so detailed that they read like a primer, a virtual "how-to manual" for anyone interested in how hackers do what they do.
 
Social engineering
 
While some of the terms such as “spearphishing,” “beacon” or “hop-points” may need a little technical explaining, it’s clear from the indictment that the defendants generally employed something security analysts call social engineering.
 
In essence, social engineering is a tactic where hackers pretend to be somebody else to try and trick the target into trusting them.
 
The aim is getting them to reveal information directly (such as a password) or infect their computers by clicking on malicious links and attachments. Social engineering, in the end, is just a fancy label for little more than a con job.
 
There are many different tricks a hacker might employ to earn their target’s trust.

But once they have it, it’s relatively easy to fool unsuspecting targets into releasing sensitive information.
 
A common example: if someone you believe is a trusted co-worker sends you an email urgently asking for a password they’ve forgotten, you’re probably much more likely to send it to them without thinking twice than someone you don’t know, analysts say.
 
“Given that these types of attacks can be attempted with very little consequence if they don't succeed,” said Mike Auty, senior security researcher at the firm MWR Infosecurity,

“It allows the attacker to launch a number of attacks, over a long period of time, and the chances are high that there will be a mistake, and someone will grant them access,” he said.
 
Which, as the indictment details, is  what the Chinese are alleged to have done.
 
One particular social engineering trick allegedly used by the defendants was “spearphishing” — sending links or attachments via email that, if clicked, would infect the target’s computer system without them knowing.
 
Once infected, the malware would create what’s called a “back door” or secret entrance into the system that could likely go undetected for prolonged periods.
 
In the recent indictment papers, U.S. prosecutors say that, defendant “SUN” — short for Sun Kailiang — “sent spearphishing e-mails purporting to be from two U.S. Steel e-mail accounts to approximately eight U.S. Steel employees, including U.S. Steel’s Chief Executive Officer.
 
“The e-mails had the subject line “US Steel Industry Outlook” and contained a link to malware that, once clicked, would surreptitiously install malware on the recipients’ computers, allowing the co-conspirators backdoor access to the company’s computers,” the indictment said.

“Further...an unidentified co-conspirator sent approximately 49 spearphishing e-mails to U.S. Steel employees with the same subject, “US Steel Industry Outlook,” according to the indictment.
 
But it didn’t stop with basic spearphishing.
 
Researcher Auty said successful social engineering hacks often require more than just bad emails.
 
And the indictment lays out another, more sophisticated attack strategy that required much greater planning, research and patience.
 
Persistence over technology
 
Throughout the document, the Justice Department describes how the defendants would first try to gain lists of current and former employees at each of the six targeted companies and then went about researching who they were.
 
The defendants then went about purchasing a variety of web site domain names, such as ‘arrowservice.net’ or ‘hugesoft.org’ (readers are advised NOT to visit these sites) and populating them both with content that appeared legitimate, but also contained hidden Trojan-horse malware.
 
These websites both served to create an appearance of trust and also to serve as “hop-points” between the infected computers and the main attack servers in China to coordinate and control all the malware-infected computers in the U.S.
 
In the indictment, attorneys detail how these hop-points could surreptitiously allow the hackers to grab documents and “exfiltrate” — a computer term that basically means stealing — the data back to China.
 
As the indictment put it: “Between intrusions, the co-conspirators used the domain accounts to reassign the malicious domain names to non-routable or innocuous IP addresses, (e.g., IP addresses for popular webmail services, like Gmail or Yahoo), which would obscure any beacons their malware sent during that period.”
 
“Bad guys want my stuff”
 
Technologically speaking, it wasn’t anywhere near the sophistication of something like the Stuxnet virus.

But for sheer persistence and imagination, it was quite a clever operation.
 
“People need to realize: the bad guys are persistent, they’re organized,” said Stephen Cobb, a senior security researcher at the cyber security firm ESET North America. “Maybe this would help: it’s not an individual who’s trying to break into your web server every five seconds.”
 
“Let’s face it: every company today has information on their computers that they need to protect,” Cobb said. “If you’ve got a website, there’s an attempt to break into it every five, six seconds. It’s automated programs.

"So people from all around the world who want to get into somebody else’s computer are running automated script looking for holes," he said. "There’s a constant probing of systems.”
 
Still, it’s hard for most people to understand cyber security, analysts say.
 
“If you work for a bank, you should be fairly aware that people might want to rob you, that’s where the money is,” Cobb said. “But if you’re a doctor, or an engineer designing a product, you’re not necessarily thinking ‘there are bad guys who want my stuff.’‘”
 
But security expert Auty said that’s not a cause to lose hope.
 
“People will always be a weak element, but given that organizations have learnt to harden their perimeter, the next area of improvement required within the industry is ensuring internal visibility and appropriate segregation,” he said.
 
For both Auty and Cobb, the segregation of data into specific areas with different levels of security is key.
 
“You can’t protect what you don’t know about,” Cobb told VOA. “One of the very first things on my list for remediation or security programs for small business or big business is know what you’ve got.”

Doug Bernard

dbjohnson+voanews.com

Doug Bernard covers cyber-issues for VOA, focusing on Internet privacy, security and censorship circumvention. Previously he edited VOA’s “Digital Frontiers” blog, produced the “Daily Download” webcast and hosted “Talk to America”, for which he won the International Presenter of the Year award from the Association for International Broadcasting. He began his career at Michigan Public Radio, and has contributed to "The New York Times," the "Christian Science Monitor," SPIN and NPR, among others. You can follow him @dfrontiers.

You May Like

Photogallery US Storm Falls Short of Severe Predictions, Yet Affects Millions

NYC mayor says, 'This is nothing like we feared it would be,' yet blizzard warnings, travel bans remain for several East Coast states More

Millions of Displaced Nigerians Struggle With Daily Existence

Government acknowledges over a million people displaced in 2014 due to fight against Boko Haram insurgency More

Facebook: Internal Error to Blame for Outages

Temporary outage appeared to spill over and temporarily slow or block traffic to other major Internet sites More

This forum has been closed.
Comment Sorting
Comments
     
by: TheSaucyMugwump from: saucymugwump.blogspot.com
May 25, 2014 6:23 PM
Corporations are being hacked by both Chinese and Russians, with the former doing it for corporate espionage and the latter doing it for personal loot. Corporations today are only concerned with reducing costs and maximizing the salaries of CEOs and other corporate officers. Target and eBay outsourced a large part of their IT function and got burned.

There is a preventative measure for phishing: before clicking on links in emails, hover the mouse over the link (but don't click on it) and read the URL in the bottom-left corner of the screen. If the URL is not what you expect, report the email as spam. It is amazing how few articles mention this simple trick.


by: Anonymot from: Boston
May 25, 2014 11:13 AM
Wow! Sic 'em. They're doing what NSA & CIA are doing and we are supposed to have a global monopoly on hacking for governmental usage, both commercial for American corporate use as well "intelligence".

It makes no sense to allow these dangerous , skilled competitors wander freely around our electronic fairs. Perhaps we should bar ALL Chinese from entering and expel those who are here who may know too much - and Japanese, too (& Indians, Pakistanis, etc.) We don't really need any other smart people in the world. We suffice.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid