Cyber Security Threats

Dr Paul Twomey

The Lowy Institute for International Policy 8 September 2010 Property of Argo Pacific Pty Ltd 0

What is the Internet?

• • Three layers All have vulnerabilities Property of Argo Pacific Pty Ltd 1

The Transit Layer

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The Application Layer

Property of Argo Pacific Pty Ltd Source: Olaf Kolkman, Internet Architecture Board 4

And while we have been going from this…

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Business has been aggregating data and risk at an unprecedented rate… 5. Fully Integrated information based Business 4. Technology Integration 3. Transactional systems 2. Storing Information 1.Messaging

Spectrum of Risk

And our physical infrastructure has become intertwined and reliant on our cyber infrastructure

Property of Argo Pacific Pty Ltd Source: DHS, "Securing the Nation’s Critical Cyber Infrastructure

We have developed the myth that technology can be an effective fortress – we can have security

• • • • Traditional focus on: Better Firewalls Boundary Intrusion Detection Critical Offsite Capacity Compliance Certification • • • False myths: IT staff = security staff Compliance failure is the main source of risk Being compliant = being safe Property of Argo Pacific Pty Ltd 9

But this concept of security is false – the Internet is fundamentally open

• • • • • • • • Facts: We don’t know what’s on our own nets What’s on our nets is bad, and existing practices aren’t finding everything Threat is in the “interior” Threat is faster than the response “Boundaries” are irrelevant We don’t know what is on our partner’s nets nor on the points of intersection Compromises occur despite defenses Depending on the motivation behind any particular threat, it can be a nuisance, costly or mission threatening

Global Internet

The critical capability it do develop real time response and resiliency

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Some types of Cyber Threats Type

Information Warfare Cyber Espionage Cyber Crime Cracking Hactivism Cyber Terror

Motivation

Military or political dominance Gain of intellectual Property and Secrets Economic gain Ego, personal enmity Political change Political change

Target

Critical infrastructure, political and military assets Governments, companies, individuals Individuals, companies, governments Individuals, companies, governments Governments, Companeis Innocent victims, recruiting

Method

Attack, corrupt, exploit, deny, conjoint with physical attack Advanced Persistent Threats Fraud, ID theft, extortion, Attack, Exploit Attack, Exploit Attack, defacing Marketing, command and control, computer based voilence 11

Cyber crime and cyber espionage are having real impacts

• • • • • • • • Estimated $1 Trillion of intellectual property stolen each year (Gartner & McAfee, Jan 20 09) Cybercrime up 53% in 2008 (McAfee) Topped $20 Billion at financial institutions Reported cyber attacks on U.S. government computer networks climbed 40% in 2008 Sensitive records of 45,000 FAA workers breached (Feb 09) Chinese stole design secrets of all U.S. nuclear weapons (Michelle Van Cleave) U.S. nuclear weapons lab is missing 69 computers (Feb 09) Cost to repair average 2008 data breach = $6.6 Million Property of Argo Pacific Pty Ltd Source: Report of the CSIS Commission on Cybersecurity for the 44th Presidency 12

Critical infrastructure and cyber attack

• • • • Infrastructure vulnerable to cyber attack – Power grid – Water – Communications – Banking, etc. Little barrier to skilled attackers Software protections not current with today’s threats Coordinated physical and cyber attack strategies could cripple critical infrastructure Source: Brenton Greene, Northrop Grumman 13 Property of Argo Pacific Pty Ltd

Corporate Brands Under Attack

• • • U.S. companies have lost billions in intellectual property to cyber A third of companies surveyed said a major security breach could put them out of business Terrorists finance their operations • Heartland Payment Systems (HPY) suffered an intrusion that compromised at least 130 million consumer cards Source: Brenton Greene, Northrop Grumman 14 Property of Argo Pacific Pty Ltd

The total cost of a data breach continues to rise.

Direct and Indirect data breach costs US$ costs per record

Direct Cost: e.g. engaging forensic experts, outsourced hotline support, free credit monitoring subscriptions, and discounts for future products and services. Indirect Costs: e.g. in-house investigations and communication, and the value of customer loss resulting from churn or diminished acquisition rates. Source: The Ponemon Institute Property of Argo Pacific Pty Ltd 15

The biggest cost growth is the churn of customers affected or influenced by the breach Component of Cost of data breach on a per victim basis US$

• • Over the past four years lost business costs, created by abnormal churn or turnover of customers, grew by more than $64 on a per victim basis, or a 38% overall percentage increase. Organizations in highly trusted industries such as banking, pharmaceuticals and healthcare are more likely to experience high abnormal churn rates following a data breach compared to retailers and companies with less direct consumer contact.

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This is an international problem

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Cyber risks are an increasing threat to sources of enterprise capability and brand competitiveness Extortion Loss of intellectual property/data

• •

Potential for disruption As part of cyber conflict (i.e. Estonia) As target of cyber protest (i.e. anti-globalization) Potential accountability for misuse (i.e. botnets) Potential for data corruption Terrorism

Property of Argo Pacific Pty Ltd • • Phishing and pharming driving increased customer costs, especially for financial services sector DDOS extortion attacks • • • National security information/export controlled information Sensitive competitive data Sensitive personal/customer data • • • eBusiness and internal administration Connections with partners Ability to operate and deliver core services

Now Now Emerging

• Reputational hits; legal accountability • Impact operations or customers through data • • DDOS and poisoning attacks Focused attacks coordinated with physical attacks

Now Future Emerging

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Attacks are increasingly easy to conduct

Drivers: fear and impact

Email propagation of malicious code “Stealth”/advanced scanning techniques Widespread attacks using NNTP to distribute attack Widespread attacks on DNS infrastructure Executable code attacks (against browsers) Automated widespread attacks GUI intruder tools Hijacking sessions Internet social engineering attacks Widespread denial-of-service attacks

1990

Packet spoofing Automated probes/scans Techniques to analyze code for vulnerabilities without source code Source: SE/CERT CC Property of Argo Pacific Pty Ltd DDoS attacks Increase in worms Sophisticated command and control

2008

Anti-forensic techniques Home users targeted Distributed attack tools Increase in wide-scale Trojan horse distribution Windows-based remote controllable Trojans (Back Orifice) 19

Recent Incidents: Rise of the Professionals

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Recent Incidents: Rise of the Professionals

• • • •

F-35 :

WSJ article:

“

Computer spies have broken into the Pentagon's $300 billion Joint Strike Fighter project -- the Defense Department's costliest weapons program ever -- according to current and former government officials familiar with the attacks” ... China suspected

Google

: Internet search company reveals existence of large-scale computer intrusions, apparently coming from China with some support from the state

US Electrical System

: WSJ article: “Cyberspies have penetrated the U.S. electrical grid and left behind software programs that could be used to disrupt the system” … Russia and China suspected

Optus

: In April 2010, customers of Optus, its partner internet service providers, and a number of major corporate customers suffered traffic degradation as a result of a distributed denial of service attack sourced from China and aimed at a large, unnamed Optus financial services customer.

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Recent Incidents: Rise of the Professionals

• • •

Estonia

: As part of unrest and pro-Russian riots in Tallinn, the Internet-embracing nation undergoes massive online attacks from ethnic Russians

Zeus Trojan

: Zeus Trojan, capable of defeating the one-time password systems used in the finance sector, targets commercial bank accounts and has gained control of more than 3 million computers, just in the US

Mariposa

: "botnet" of infected computers included PCs inside more than half of the Fortune 1,000 companies and more than 40 major banks 22 Property of Argo Pacific Pty Ltd

Mass-scale hacking

• • • • •

It's ROI focused.

.

It's not personal.

Automated attacks against mass targets, not specific individuals.

It's multilayer.

Each party involved in the hacking process has a unique role and uses a different financial model.

It's automated.

Botnets exploit vulnerabilities and extract valuable data, conduct brute force password attacks, disseminate spam, distribute malware and manipulate search engine results.

• • • Common attack types include:

Data theft or SQL injections.

Business logic attacks.

Denial of service attacks.

Source: Amichai Shulman 23 Property of Argo Pacific Pty Ltd

Advanced Persistent Threats

• • • • •

It's very personal.

The attacking party carefully selects targets based on political, commercial and security interests. Social engineering is often employed.

It's persistent.

If the target shows resistance, the attacker will not leave, but rather change strategy and deploy a new type of attack against the same target.

Control focused.

APTs are focused on gaining control of crucial infrastructure, such as power grids and communication systems. APTs also target data comprised of intellectual property and sensitive national security information.

It's automated, but on a small scale.

Automation is used to enhance the power of an attack against a single target, not to launch broader multi-target attacks.

It's one layer.

One party owns and controls all hacking roles and responsibilities. Source: Amichai Shulman 24 Property of Argo Pacific Pty Ltd

Cyber warfare?: Estonia cyber attacks

•

Started on April 27, 2007 3 weeks .

and this attacks last about

•

Series of attacks targeting government portals, parliament portal, banks, ministries, newspapers and broadcasters of Estonia.

•

Estonians claimed this attacks as a political attack or revenge from Russians for the moving of a WWII memorial.

Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

How the attacks took place

• • • • Weeks of cyber attacks followed, targeting government and banks, ministries, newspapers and broadcasters Web sites of Estonia.

• Some attacks took the form of distributed denial of service (DDoS) attacks (using ping floods to expensive rentals of botnets).

128 unique DDOS attacks (115 ICMP floods, 4 TCP SYN floods and 9 generic traffic floods).

Used hundreds or thousands of "zombie" computers and pelted Estonian Web sites with thousands of requests a second, boosting traffic far beyond normal levels.

Attacker commanding other computers to bombard a web site with requests for data, causing the site to stop working. Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

How the attack took place …

• The attack heavily affected infrastructures of all network:  Routers damaged.

 Routing tables changed.

 DNS servers overloaded.

 Email servers mainframes failure, and etc. Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

Impact

• Inoperability of the following state and commercial bodies:  The Estonian presidency and its parliament.

 Almost all of the country’s government ministries.

 Political parties.

 Three news organizations.

 Two biggest banks and communication’s firms.

 Governmental ISP.

 Telecom companies. Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

How did Estonia respond?

• • • • Estonia's Computer Emergency Response Team (CERT) acted as a coordinating unit, concentrating its efforts on protecting the most vital resources.

• Closing down the sites under attacked to foreign internet addresses and keep the sites only accessible to domestic users.

Cutting 99% of bogus traffic which was originated outside Estonia.

Implemented an online "diversion" strategy that made attackers hack sites that had already been destroyed.

Implemented advanced filters to the traffic, then Cisco Guard was installed to lower malicious traffic.

Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

Response included much help from others

• • • • Identification and further blockade of bots from root DNS servers. CERT persuaded ISPs around the world to blacklist attacking computers which overwhelm Estonia’s bandwidth. • Germany, Slovakia, Latvia, Lithuania, Italy and Spain supported and funded CERT the hub in the Estonian capital Tallinn to protect the security.

Block all .ru domain.

The president gave up his own website and let them continue to attack it so that they would not be able to destroying more critical things.

Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

International impact

• • • • The Estonian CERT analyze server logs and data to find out who is behind the attacks.

NATO assisted Estonia in combating the cyber attacks and has voted to work with member governments to improve cyber security.

NATO's new cyber-warfare center will be based in Tallinn.

Estonia called in July 2008 for an international convention on combating computer-based attacks.

Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009 Property of Argo Pacific Pty Ltd

So who can do this?

State Actors Definition:

Nation States who engage in one or more types of cyber operations Property of Argo Pacific Pty Ltd Russian Federation Ukraine Georgia Peoples Republic of China Israel Palestinian National Authority (Hamas) U.S.

Pakistan Zimbabwe Kyrgyzstan Estonia Ingushetia Taiwan Iran Myanmar (Burma) Turkey Germany Australia Source Jeffrey Carr, GreyLogic

State-Sponsored Actors Definition:

Non-state actors who are engaged by States to perform one or more types of cyber operations. Partial list of States known to or suspected of sponsoring Actors Russian Federation Peoples Republic of China Turkey Iran United States Myanmar Israel Source Jeffrey Carr, GreyLogic Property of Argo Pacific Pty Ltd

Non-State Actors Definition:

Non-state actors who engage in cyber crime and/or patriotic hacking (aka hacktivists)

Too numerous too list

Property of Argo Pacific Pty Ltd Source Jeffrey Carr, GreyLogic

War by proxy?

Kremlin Kids: We Launched the Estonian Cyber War

By Noah Shachtman March 11, 2009 | Wired.com

Like the online strikes against Georgia , the origins of the 2007 cyber attacks on Estonia remain hazy. Everybody suspects the Russian government was somehow behind the assaults; no one has been able to prove it. At least so far. A pro-Kremlin youth group has taken responsibility for the network attacks. And that group has a track record of conducting operations on Moscow’s behalf.

Nashi ("Ours") is the "largest of a handful of youth movements created by Mr. Putin’s Kremlin to fight for the hearts and minds of Russia’s young people in schools, on the airwaves and, if necessary, on the streets," according to the

New York Times

.

Yesterday, one of the group’s "commissars," Konstantin Goloskokov (pictured), told the

Financial Times

that he and some associates had launched the strikes . "I wouldn’t have called it a cyber attack; it was cyber defense," he said. "We taught the Estonian regime the lesson that if they act illegally, we will respond in an adequate way." He made similar claims , in 2007.

If true, it would be only one in a long string of propaganda drives the group has waged in support of the Kremlin. Not only has Nashi waged intimidation campaigns against the British and Estonian ambassadors to Moscow, and staged big pro-Putin protests. Not only has been it been accused of launching denial-of-service attacks against unfriendly newspapers. Last month, Nashi activist Anna Bukovskaya acknowledged that the group was paid by Moscow to spy on other youth movements . The project, for which she was paid about $1100 per month, included obtaining "videos and photos to compromise the opposition, data from their computers; and, as a separate track, the dispatch of provocateurs," she told a Russian television channel.

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The proliferation of capability into the hacker/criminal world has enabled a blurring of actors and motivations – a major challenge for any future international regime for controlling national state cyber competition

Cyber Warfare Cyber Espionage Cyber Crime Property of Argo Pacific Pty Ltd 36

Strategic implications

• • Nation-states lose some control over conflict Geopolitical analysis required –Cyber conflict mirrors fighting on ground • • Attribution and the false flag –Concept: People’sWar Is national security at risk? –As with WMD, defense strategies unclear –As with terrorism, success in media hype Source: Cyberspace and the Changing Nature of Warfare Kenneth Geers Nato Cooperative Cyber Defence Centre of Excellence Property of Argo Pacific Pty Ltd 37

The old rules collide with cyber reality

• Foreign Relations Law(U.S.): “It is universally recognized, as a corollary of state sovereignty, that officials in one state may not exercise their functions in the territory of another state without the latter's consent.” Property of Argo Pacific Pty Ltd Source: Cyberspace and the Changing Nature of Warfare Kenneth Geers Nato Cooperative Cyber Defence Centre of Excellence 38

Australian Federal government response since 2009

Defence Signals Directorate

Reveal Their Secrets – Protect Our Own

Attorney General’s Department

Cyber Security Operations Centre

(CSOC) • DSD capability that serves all government agencies.

• Provides government with a comprehensive understanding of cyber threats against Australian interests; • coordinates operational responses to cyber events of national importance across government and critical infrastructure.

•embedded representation from a number of other agencies involved in assessing the threat to, and the protection of, Australian interests from sophisticated threat actors. •The CSOC will also assist CERT Australia

ASIO CERT Australia

•work with the private sector in identifying critical infrastructure and systems that are important to Australia’s national interest, based on an assessment of risk, and to provide these organisations with information and assistance to help them protect their information and communication technology infrastructure from cyber threats and vulnerabilities.

•Sector Progams: •banking and finance, •control systems •telecommunications Property of Argo Pacific Pty Ltd 39

Up to the early 1990s in Australia

• Government ran government networks. The government ran military networks. The government owned Telecom Australia and OTC.

• To expect DSD and/or ASIO to play the primary protection role was quite valid. Property of Argo Pacific Pty Ltd 40

But today

• Every business is connected to the Internet. Every business’s network is part of the internet. • The capacity to interact with each other is a key part of their risk environment. Telcos, businesses, universities, and households are all connected in different ways. • • The government now owns a tiny minority of these networks.

If there were negligence causing damage, who would be liable? In the 1970s, 80s and even the early 1990s you could make a case that somehow or other the government would end up being the defendant. Today it would be the companies. • The big change for boards in Australia is that if somebody wants to bring a negligence action for something that went bad on the network they are more likely to to be liable. • Cyber crime and cyber espionage pose increasing risk to the 41 Property of Argo Pacific Pty Ltd

Cyber crime and cyber espionage pose increasing risk to

• • • • Operations Reputation Financial performance Competitive position in the market • And managing risk is a Board responsibility Property of Argo Pacific Pty Ltd 42

THANK YOU

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