Posts Tagged: waledac

A Little Sunshine — 53 Comments
16
Apr 12

Microsoft Responds to Critics Over Botnet Bruhaha

Microsoft’s most recent anti-botnet campaign — a legal sneak attack against dozens of ZeuS botnets — seems to have ruffled the feathers of many in security community. The chief criticism is that the Microsoft operation exposed sensitive information that a handful of researchers had shared in confidence, and that countless law enforcement investigations may have been delayed or derailed as a result. In this post, I interview a key Microsoft attorney about these allegations.

Since Microsoft announced Operation B71, I’ve heard from several researchers who said they were furious at the company for publishing data on a group of hackers thought to be behind a majority of the ZeuS botnet activity — specifically those targeting small to mid-sized organizations that are getting robbed via cyber heists. The researchers told me privately that they believed Microsoft had overstepped its bounds with this action, using privileged information without permission from the source(s) of that data (many exclusive industry discussion lists dedicated to tracking cybercriminal activity have strict rules about sourcing and using information shared by other members).

At the time, nobody I’d heard from with complaints about the action wanted to speak on the record. Then, late last week, Fox IT, a Dutch security firm, published a lengthy blog post blasting Microsoft’s actions as “irresponsible,” and accusing the company of putting its desire for a public relations campaign ahead of its relationship with the security industry.

“This irresponsible action by Microsoft has led to hampering and even compromising a number of large international investigations in the US, Europe and Asia that we knew of and also helped with,” wrote Michael Sandee, Principal Security Expert at Fox IT. “It has also damaged and will continue to damage international relationships between public parties and also private parties. It also sets back cooperation between public and private parties, so called public private partnerships, as sharing will stop or will be definitely less valuable than it used to be for all parties involved.”

Sandee said that a large part of the information that Microsoft published about the miscreants involved was sourced from individuals and organizations without their consent, breaking various non-disclosure agreements (NDAs) and unspoken rules.

“In light of the whole Responsible Disclosure debate  [link added] from the end of Microsoft this unauthorized and uncoordinated use and publication of information protected under an NDA is obviously troublesome and shows how Microsoft only cares about protecting their own interests,” Sandee wrote.

Given the strong feelings that Microsoft’s actions have engendered in the Fox IT folks and among the larger security community, I reached out to Richard Boscovich, a former U.S. Justice Department lawyer who was one of the key architects of Microsoft’s legal initiative against ZeuS. One complaint I heard from several researchers who believed that Microsoft used and published data they uncovered was that the company kept the operation from nearly everyone. I asked Boscovich how this operation was different from previous actions against botnets such as Rustock and Waledac.

Boscovich: It’s essentially the same approach we’ve done in all the other operations. The problem that I think some people have is that due to the type of operation, we can’t have the entire community involved. That’s for several reasons. One is operational security. The bigger the number of people involved, the more likely is that is someone will make a mistake and say something that could jeopardize all of the work that everyone has done. Also, we’re making representations to a federal court that this is an ex-parte motion and very limited people know about it. If you have multiple people knowing, and the entire security community knows, let’s say we submit declarations from 30-40 people. A court may say, ‘Well there’s a lot of people here who know about this, so isn’t this information that’s already publicly available? Don’t these people know you’re looking at them already?’ We’re really asking for an extraordinary remedy: an ex-parte TRO [temporary restraining order] is a very high standard. We have to show an immediate threat and harm, ongoing, so much so that we can’t even give the other side notice that we’re going to sue them and take away their property.

The other concern is more operational. When I was in the Justice Department — I was there for just shy of 18 years — we even compartmentalized operations there. Information was shared on a need-to-know basis, to make sure the operation would be a success and that there wouldn’t be any inadvertent leaks. It wasn’t because we didn’t trust people, but because people sometimes make mistakes. So in this operation, just like the others, we engaged with industry partners, academic partners, and some of those who wished to be open, and others who preferred to do things behind the scenes.

Continue reading →

A Little Sunshine / The Coming Storm / Web Fraud 2.0 — 11 Comments
28
Mar 12

Researchers Clobber Khelios Spam Botnet

Experts from across the security industry collaborated this week to quarantine more than 110,000 Microsoft Windows PCs that were infected with the Khelios worm, a contagion that forces infected PCs to blast out junk email advertising rogue Internet pharmacies.

Most botnets are relatively fragile: If security experts or law enforcement agencies seize the Internet servers used to control the zombie network, the crime machine eventually implodes. But Khelios (a.k.a. “Kelihos”) was built to withstand such attacks, employing a peer-to-peer structure not unlike that used by popular music and file-sharing sites to avoid takedown by the entertainment industry.

Update, 11:07 a.m. ET: Multiple sources are now reporting that within hours of the Khelios.B takedown, Khelios.C was compiled and launched. It appears to be spreading via Facebook.

Original post: The distributed nature of a P2P botnet allows the botmaster to orchestrate its activities by seeding a few machines in the network with encrypted instructions. Those systems then act as a catalyst, relaying the commands from one infected machine to another in rapid succession.

P2P botnets can be extremely resilient, but they typically posses a central weakness: They are only as strong as the encryption that scrambles the directives that the botmaster sends to infected machines. In other words,  anyone who manages to decipher the computer language needed to talk to the compromised systems can send them new instructions, such as commands to connect to a control server that is beyond the reach of the miscreant(s) who constructed the botnet.

That’s precisely the approach that security researchers used to seize control of Khelios. The caper was pulled off by a motley band of security experts from the Honeynet Project, Kaspersky, SecureWorks, and startup security firm CrowdStrike. The group figured out how to crack the encryption used to control systems infected with Khelios, and then sent a handful of machines new instructions to connect to a Web server that the researchers controlled.

That feat allowed the research team to wrest the botnet from the miscreants who created it, said Adam Meyers, director of intelligence for CrowdStrike. The hijacking of the botnet took only a few minutes, and when it was complete, the team had more than 110,000 PCs reporting to its surrogate control server.

“Once we injected that information in the P2P node, it was essentially propagating everything else for us,” Meyers said. “By taking advantage of the intricacies of the protocol, we were providing the most up-to-date information that all of hosts were spreading.”

The group is now working to notify ISPs where the infected hosts reside, in hopes of cleaning up the bot infestations. Meyers said that, for some unknown reason, the largest single geographic grouping of Khelios-infected systems – 25 percent — were located in Poland. U.S.-based ISPs were home to the second largest contingent of Khelios bots. Meyers said about 80 percent of the Khelios-infected systems they sinkholed were running Windows XP, an increasingly insecure operating system that Microsoft released more than a decade ago. Continue reading →

A Little Sunshine / Pharma Wars — 24 Comments
26
Jan 12

Mr. Waledac: The Peter North of Spamming

Microsoft on Monday named a Russian man as allegedly responsible for running the Kelihos botnet, a spam engine that infected an estimated 40,000 PCs. But closely held data seized from a huge spam affiliate program suggests that the driving force behind Kelihos is a different individual who commanded a much larger spam empire, and who is still coordinating spam campaigns for hire.

Kelihos shares a great deal of code with the infamous Waledac botnet, a far more pervasive threat that infected hundreds of thousands of computers and pumped out tens of billions of junk emails promoting shady online pharmacies. Despite the broad base of shared code between the two malware families, Microsoft classifies them as fundamentally different threats. The company used novel legal techniques to seize control over and shutter both botnets, sucker punching Waledac in early 2010 and taking out Kelihos last fall.

On Monday, Microsoft filed papers with a Virginia court stating that Kelihos was operated by Andrey N. Sabelnikov, a St. Petersburg man who once worked at Russian antivirus and security firm Agnitum. But according to the researcher who shared that intelligence with Microsoft — and confidentially with Krebs On Security weeks prior to Microsoft’s announcement — Sabelnikov is likely only a developer of Kelihos.

“It’s the same code with modifications,” said Brett Stone-Gross, a security analyst who came into possession of the Kelihos source code last year and has studied the two malware families extensively.

Rather, Stone-Gross said, the true coordinator of both Kelihos and Waledac is likely another Russian who is well known to anti-spam activists.

WHO IS SEVERA?

A variety of indicators suggest that the person behind Waledac and later Kelihos is a man named “Peter Severa” — known simply as “Severa” on underground forums. For several years running, Severa has featured in the Top 10 worst spammers list published by anti-spam activists at Spamhaus.org (he currently ranks at #5). Spamhaus alleged that Severa was the Russian partner of convicted U.S. pump-and-dump stock spammer Alan Ralsky, and indeed Peter Severa was indicted by the U.S. Justice Department in a related and ongoing spam investigation.

It turns out that the connection between Waledac and Severa is supported by data leaked in 2010 after hackers broke into the servers of pharmacy spam affiliate program SpamIt. The data also include tantalizing clues about Severa’s real identity.

In multiple instances, Severa gives his full name as “Peter North;” Peter Severa translates literally from Russian as “Peter of the North.” (The nickname may be a nod to the porn star Peter North, which would be fitting given that Peter North the spammer promoted shady pharmacies whose main seller was male enhancement drugs).

Spamdot.biz moderator Severa listing prices to rent his Waledac spam botnet.

According to SpamIt records, Severa brought in revenues of $438,000 and earned commissions of $145,000 spamming rogue online pharmacy sites over a 3-year period. He also was a moderator of Spamdot.biz (pictured at right), a vetted-members-only forum that included many of SpamIt’s top earners, as well as successful spammers/malware writers from other affiliate programs such as EvaPharmacy and Mailien.

Severa seems to have made more money renting his botnet to other spammers. For $200, vetted users could hire his botnet to send 1 million pieces of spam; junk email campaigns touting employment/money mule scams cost $300 per million, and phishing emails could be blasted out through Severa’s botnet for the bargain price of $500 per million.

Spamhaus says Severa’s real name may be Peter Levashov. The information Severa himself provided to SpamIt suggests that Spamhaus’s intelligence is not far off the mark.

Severa had his SpamIt earnings deposited into an account at WebMoney, a virtual currency popular in Russia and Eastern Europe. According to a source that has the ability to look up identity information tied to WebMoney accounts, the account was established in 2001 by someone who entered a WebMoney office and presented the Russian passport #454345544. The passport bore the name of a then 26-year-old from Moscow — Viktor Sergeevich Ivashov.

Continue reading →

A Little Sunshine / Web Fraud 2.0 — 6 Comments
26
Jul 11

Spam & Fake AV: Like Ham & Eggs

An explosion of online fraud tools and services online makes it easier than ever for novices to get started in computer crime. At the same time, a growing body of evidence suggests that much of the world’s cybercrime activity may be the work of a core group of miscreants who’ve been at it for many years.

I recently highlighted the financial links among the organizations responsible for promoting fake antivirus products and spam-advertised pharmacies; all were relying on a few banks in Azerbaijan to process credit card payments.

In this segment, I’ll look at the personnel overlap between the fake AV and pharma industries. The data is drawn from two places: a study done by researchers at the University of California, Santa Barbara (UCSB) that examined three of the most popular fake AV affiliate services which pay hackers to foist worthless software on clueless Internet users; and the leaked Glavmed/Spamit affiliate database, which includes the financial and contact information for many of the world’s top spammers and hackers.

UCSB researcher Brett Stone-Gross and I compared the ICQ instant message numbers belonging to affiliates from Glavmed/Spamit with the ICQ numbers used by affiliates of the largest of the fake AV programs measured by his research team. The result? 417 out of 998 affiliates who were registered with the fake AV distribution service — a whopping 42.2 percent — also were registered pharma spammers with Glavmed/Spamit.

Continue reading →

A Little Sunshine / The Coming Storm / Web Fraud 2.0 — 48 Comments
21
Mar 11

Homegrown: Rustock Botnet Fed by U.S. Firms

Aaron Wendel opened the doors of his business to some unexpected visitors on the morning of Mar. 16, 2011. The chief technology officer of Kansas City based hosting provider Wholesale Internet found that two U.S. marshals, a pair of computer forensics experts and a Microsoft lawyer had come calling, armed with papers allowing them to enter the facility and to commandeer computer hard drives and portions of the hosting firm’s network. Anyone attempting to interfere would be subject to arrest and prosecution.

Weeks earlier, Microsoft had convinced a federal judge (PDF)  to let the software giant seize control of server hard drives and reroute Internet addresses as part of a carefully timed takedown of the Rustock botnet, which had long reigned as the world’s most active spam-spewing crime machine.

In tandem with the visit to Wholesale Internet, Microsoft employees and U.S. marshals were serving similar orders at several other hosting providers at locations around country.  Microsoft’s plan of attack — which it spent about six months hatching with the help of a tightly knit group of industry and academic partners — was to stun the Rustock botnet, by disconnecting more than 100 control servers that the botnet was using to communicate with hundreds of thousands of infected Windows PCs.

Only two of the control servers were located outside the United States; the rest operated from hosting providers here in the US, many at relatively small ISPs in Middle America.

Concentrations of Rustock control networks.

Microsoft was careful not to make any accusations that hosting providers were complicit in helping the Rustock botmasters; however, some of these control servers existed for more than a year, and most likely would have continued to operate undisturbed had Microsoft and others not intervened. Using data gathered by Milpitas, Calif. based security firm FireEye, which assisted Microsoft in the takedown, I was able to plot the location and lifetime of each control server (the map above is clickable and should let you drill down to the details of each control server; the raw data is here). The average life of each controller was 251 days — a little over eight months.

Wholesale Internet’s Wendel said his organization takes action against any customers that appear to be violating the company’s terms of use or its policies. But he insisted that the visit by Microsoft and the marshals was the first time he’d heard that any of the 16 Rustock command and control servers were located on his network.

“To be perfectly honest with you, we never heard of Rustock until Wednesday,” Wendel said in a phone interview last Friday. Wendel also said he  hadn’t heard anything about the problematic servers from either Spamhaus or Shadowserver, which allow ISPs and hosting providers to receive reports about apparent botnet control servers and bot infections on their networks. Both Shadowserver and Spamhaus dispute this claim, saying that while they certainly did not alert Wholesale to all of the problem Internet addresses that it may have had on its network, they filed several reports with the company over the past six months that should have given the company cause to take a closer look at its customers and systems.

Continue reading →

A Little Sunshine — 23 Comments
25
Feb 10

Microsoft Ambushes Waledac Botnet, Shutters Whistleblower Site

Microsoft’s lawyers this week engineered a pair of important takedowns, one laudable and the other highly-charged. The software giant orchestrated a legal sneak attack against the Web servers controlling the Waledac botnet, a major distributor of junk e-mail. In an unrelated and more controversial move, Redmond convinced an ISP to shutter a popular whistleblower Web site for hosting a Microsoft surveillance compliance document.

On Feb. 22, a federal judge in Virginia granted a request quietly filed by Microsoft to disconnect 277 Internet domains believed to be responsible for directing the daily activities of the Waledac botnet, estimated to be one of the ten-largest spam botnets in existence today and responsible for sending 1.5 billion junk e-mails per day. Microsoft said it found that between December 3-21, 2009, approximately 651 million spam emails attributable to Waledac were directed to Hotmail accounts alone, including offers and scams related to online pharmacies, imitation goods, jobs, penny stocks and more.

Continue reading →