What’s a “State-Sponsored Actor”?

Yahoo![Updated thanks to an old friend.]

In Yahoo!’s announcement of the theft of 500 million accounts, the Chief Information Security Officer Bob Lord wrote that the company believes a “state-sponsored actor” was behind the attack.  What does that mean and how would Yahoo! come to this conclusion?

The term “state-sponsored” is vague.  It could means someone who works for a government, or it could mean someone who has in effect been contracted out by a government.  Both Russia and China have been accused of this sort of behavior in the past.  In the case of Russia, there are two well known hacking organizations, Cozy Bear and Fancy Bear that the Washington Post previously reported were involved in the cyberattack against the Democratic National Committee’s systems.  In the case of China, the Elderwood Group was accused of taking part in a successful phishing attack against His Holiness, the Dalai Lama.

But why does Yahoo! believe that the culprit is one of these groups and not any other hacker?  There are several possibilities:

  • Perhaps the botnet systems used used to gain access to the Yahoo! passwords were the same as those used in an earlier attack in which a state-sponsored actor was known to be involved; or
  • The code used to break into Yahoo!’s internal network was the same or similar to code used in an earlier attack that is known to be from one of these groups; or
  • The investigation has been able to determine where the control systems of an attack are and who is accessing them.
  • As my friend points out, governments aren’t in this for the money but for some other purpose.  That means that stolen information isn’t likely to hit the black market anytime soon.  In this case, by the time Yahoo! discovered the problem, the breach was two years old.

Finding proof beyond a reasonable doubt will be difficult.  Consider this: it is possible for the Chinese to make use of a botnet run in Russia or America, or for America to operate a botnet in China to attack systems in Russia, just to lend the appearance as to who the source is, without revealing who the actual source is.

The only fundamental solution to this sort of attack is better end system security.  Only when botnets have dried up can we establish the true source of attacks.  Maybe in my lifetime this will happen.  Maybe.  But that means a lot of people have to do a lot of work.

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The Yahoo! Breach: What it means to you

Steps you should take after the Yahoo! breach.

yahooYesterday, Yahoo! announced that at least 500 million accounts have been breached.  This means that information you gave Yahoo! may be in the hands of hackers, but it could also mean a lot more. The New York Times has an excellent interactive tool today that demonstrates how much of your information may have leaked, not just from Yahoo! but from other breaches.

Not only should people change their Yahoo! passwords, but it is also important for people to review all passwords and information shared with Yahoo!  In particular:

  1. Many people use the same password across multiple accounts.  If you did this, you should change passwords on all systems where that password was used.  When you do, you should see to it that no passwords are shared between two systems.
  2. Hackers are smart.  If you only tweak the same password just a little bit for use on multiple systems, a determined hacker or more likely a determined script may well break into other accounts.  For example, if your Yahoo! password was DogCatY! and your E-Bay Password were DogCatEBay, you should assume the E-Bay account is broken as well.
  3. This means you should keep a secure record of what passwords are used where, for just this sort of eventuality.  By “secure” I mean encrypted and local.  Having two pristine USB keys (one for backup) is ideal, where the contents are encrypted at the application layer.  I also make use of Firefox’s password manager.  That in itself is a risk, because if Firefox is hacked your passwords may be gone as well.
  4. Unfortunately passwords may not be the only information hackers have. Yahoo! has previously made use of so-called “backup security questions”.  Not only is it important to disable those questions, but it is important to first review them to see where else you may have used them.  Security questions are a horrible idea for many reasons: they may reveal private aspects of your life, much of which might be discovered anyway.  Sites like United Airlines recently implemented security questions.  My recommendation: choose random answers and record them in a secure place that is separate from your passwords.
  5. It is possible that hackers may have read any email you received on Yahoo!  In particular, one should review any financial accounts where information is transmitted to Yahoo!
  6. Use of cloud-based storage as a backup for your passwords should be viewed with great suspicion.  There have been a number of such tools that themselves have been found to be vulnerable.
  7. Hackers may have your cell phone number, for those who use SMS as secondary authentication.  While SMS is not secure communication, the chances of it being hacked are relatively low.  The safest practice is not to rely solely on SMS for authentication.  My bank uses both a secret and an SMS message, relying on the tried and true two-factor authentication approach of something you have and something you know.  A better solution is a secret and an app with a secure push notification.  This is what MasterCard has done in Europe.

These suggestions are good for the sort of mass breach that we are seeing with Yahoo!  In addition, one has to be careful with the amount of trust placed in a cell phone.  If the phone is lost, you should assume that hackers will be able to get into it.  Keeping a record of the applications you use, particularly those that have financial or security implications, will help you recover from the loss.

These suggestions are written with the notion that Yahoo! is not going to be the only site that will have had this problem.  Although not to this scale, we’ve seen this sort of thing before, and we will see it again.  I’ll have more to say about this from an industry perspective in a while.


Yahoo picture by Sebastian Bergmann – originally posted to Flickr as Yahoo!, CC BY-SA 2.0

Will New NY Banking Regulations Actually Tighten Cybersecurity?

Proposed New York banking regulations might not help that much.

New York is proposing new cybersecurity rules that would raise the bar for banks over which they have jurisdiction (wouldn’t that be just about all of them?).  On their face, the new regulations would seem to improve overall bank posture, but digging a bit deeper leads me to conclude that these regulations require a bit of work.

A few key new aspects of the new rules are as follows:

  1. Banks must perform annual risk assessments and penetration tests;
  2. New York’s Department of Financial Services (DFS) must be notified within 72 hours of an incident (there are currently numerous timeframes);
  3. Banks must use 2-factor authentication for employee access; and
  4. All non-public data must be encrypted, both in flight and at rest.

The first item on that list is what Chief Information Security Officers (CISOs) already get paid to do.  Risk assessment is in particular the most important task on this list, because as banks evolve their service offerings, they must ascertain both evolving threats and potential losses.  For example, as banks added iPhone apps, the risk of an iPhone being stolen became relevant, thus impacting app design.

Notification laws exist already in just about all jurisdictions.  The proposed banking regulation does not say what the regulator will do with the information or how it will be safeguarded.  A premature release can harm ongoing investigations.

Most modern banks outside the United States already use two-factor authentication for employee access, and many require two-factor authentication for customer access.

That last one is a big deal.  Encrypting data in flight (e.g., transmissions from one computer to another) protects against eavesdroppers.  At the same time, absent other controls, encryption can obscure data exfiltration (information theft). Banks currently have many tools that rely on certain transmissions being “in the clear”, and it may require some redesign of communication paths to address both the encryption in flight requirement and auditing needs.  Some information is simply impractical today to encrypt in flight.  This includes discovery protocols such as DHCP, name service exchanges (DNS), and certain other network functions.  To encrypt much of this information would require yet lower layer protection such as IEEE 802.1AE (MACSEC) hop-by-hop encryption.  The regulation is, again, vague on precisely what is necessary.  One thing is clear, however: their definition of non-public information is quite broad.

To meet the “data at rest” requirement banks will either have to employ low level disk encryption or higher level object-level encryption.  Low level encryption protects against someone stealing a disk or taking it from the trash and reading it, but provides very little protection against someone breaking into a computer when the disk is still spinning.  Moreover, banks generally have rules about crushing disks before they can leave a data center.  Requiring data at rest to be encrypted in data centers may not provide much risk mitigation.  While missing laptops have repeatedly been a source data breaches, how often has a missing data center disk caused a breach?

Object-level encryption, or the encryption of groups of information elements (think Email messages) can provide strong protection should devices be broken into.  Object-level encryption is particularly interesting because if done right, it can address both data in flight and data at rest.  The challenge with object-level encryption is that the tools for it are quite limited.  While there are some tools such as email message encryption, and while there are various ways one can use existing general purpose mechanisms such as OpenSSL to encrypt objects at rest, on object-level encryption remains a challenge because it must be implemented at the application level across all applications.  Banks may have tens of thousands of applications running at any one time.

This is an instance where the financial industry could be a technology leader.  However, all such development must be grounded in a proper risk assessment.  Otherwise we end up in a situation where banks will have expended enormous amounts of resources without having substantially improved security.

Holiday Shoppers: Don’t Get Phished!

Don’t get phished this holiday season. Here are some common sense reminders.

CybercrimeAs we enter the holiday season, if you order online, fraudsters will be targeting you.  Many people will be easy marks, where their computers will become infected with viruses, and they will be victims of identity theft. Big online vendors such as eBay and Amazon represent big targets, but others will be targets as well.  Phishers will be sending out loads of poisonous messages, just hoping that a few people will mistakenly click on links to malware-laden web sites.  While big mail providers like Google and Yahoo! work hard to filter out such garbage, it’s unavoidable that some of dangerous emails will get through.  Preventing such thefts while shopping online can be tricky because fraudulent and legitimate messages look nearly identical. Fraudsters may know something about you, such as your name, your mother tongue, the region in which you live, and the names of some of your friends.  A competent fraudster will use the logos and have the same look and feel of a legitimate online vendor.

Some of my techie friends are probably snickering, saying “That couldn’t happen to me.”  It probably already has.

Here are a few common sense suggestions to keep you from becoming a victim:

  1. Here’s the obvious one: if you didn’t order something from a vendor, be highly suspicious of the email, especially with messages that claim to have order information or coupon offers.
  2. If you have ordered something, beware any message with a subject that is vague, such as “your order”.  A legitimate online vendor will somehow identify the order, either with an order number or with the name of the product you have ordered.  This may appear in the subject line or in the body of the message.
  3. No legitimate online vendor sends zip files in email.  Don’t open them.  The same largely holds for most other attachments.  If they can’t provide you necessary information in the body of the message, it’s probably not legitimate.
  4. Most online vendors provide you a means to log into their service to track orders.  If you are at all in doubt about whether a message is legitimate, without clicking on a link in the message, visit their web site, and log in to track the order.  If you need help, contact the vendor’s customer service.
  5. While banks may email you alerts of some form, it is still always better to go to their web sites without clicking on links in the messages.
  6. Unless you gave it to them directly shippers such as Federal Express do not have your email address.  No decent online vendor will share your email address with a shipper.

What happens if you do click on something you shouldn’t have?  There is no easy answer.  Unless you are using antivirus, you have to assume the worst.  This means that it’s important to maintain good backups.  That way you can reinstall from scratch.  Sounds painful?  Then don’t carelessly click on email links.

Want some more advice on staying safe?  Check out StaySafeOnline.org.