Crypto-Gram

July 15, 2021

by Bruce Schneier

Fellow and Lecturer, Harvard Kennedy School

schneier@schneier.com

https://www.schneier.com

A free monthly newsletter providing summaries, analyses, insights, and commentaries on security: computer and otherwise.

For back issues, or to subscribe, visit Crypto-Gram’s web page.

These same essays and news items appear in the Schneier on Security blog, along with a lively and intelligent comment section. An RSS feed is available.

In this issue:

1. Andrew Appel on New Hampshire’s Election Audit

2. VPNs and Trust

3. Paul van Oorschot’s Computer Security and the Internet

4. Intentional Flaw in GPRS Encryption Algorithm GEA-1

5. Peloton Vulnerability Found and Fixed

6. The Future of Machine Learning and Cybersecurity

7. Apple Will Offer Onion Routing for iCloud/Safari Users

8. Mollitiam Industries is the Newest Cyberweapons Arms Manufacturer

9. Banning Surveillance-Based Advertising

10. AI-Piloted Fighter Jets

11. NFC Flaws in POS Devices and ATMs

12. Risks of Evidentiary Software

13. Insurance and Ransomware

14. More Russian Hacking

15. Stealing Xbox Codes

16. Vulnerability in the Kaspersky Password Manager

17. Details of the REvil Ransomware Attack

18. Analysis of the FBI’s Anom Phone

19. Iranian State-Sponsored Hacking Attempts

20. China Taking Control of Zero-Day Exploits

21. Upcoming Speaking Engagements

Andrew Appel on New Hampshire’s Election Audit

[2021.06.15] Really interesting two part analysis of the audit conducted after the 2020 election in Windham, New Hampshire.

Based on preliminary reports published by the team of experts that New Hampshire engaged to examine an election discrepancy, it appears that a buildup of dust in the read heads of optical-scan voting machines (possibly over several years of use) can cause paper-fold lines in absentee ballots to be interpreted as votes… New Hampshire (and other states) may need to maintain the accuracy of their optical-scan voting machines by paying attention to three issues:

- Routine risk-limiting audits to detect inaccuracies if/when they occur.

- Clean the dust out of optical-scan read heads regularly; pay attention to the calibration of the optical-scan machines.

- Make sure that the machines that automatically fold absentee ballots (before mailing them to voters) don’t put the fold lines over vote-target ovals. (Same for election workers who fold ballots by hand.)

VPNs and Trust

[2021.06.16] TorrentFreak surveyed nineteen VPN providers, asking them questions about their privacy practices: what data they keep, how they respond to court order, what country they are incorporated in, and so on.

Most interesting to me is the home countries of these companies. Express VPN is incorporated in the British Virgin Islands. NordVPN is incorporated in Panama. There are VPNs from the Seychelles, Malaysia, and Bulgaria. There are VPNs from more Western and democratic countries like the US, Switzerland, Canada, and Sweden. Presumably all of those companies follow the laws of their home country.

And it matters. I’ve been thinking about this since Trojan Shield was made public. This is the joint US/Australia-run encrypted messaging service that lured criminals to use it, and then spied on everything they did. Or, at least, Australian law enforcement spied on everyone. The FBI wasn’t able to because the US has better privacy laws.

We don’t talk about it a lot, but VPNs are entirely based on trust. As a consumer, you have no idea which company will best protect your privacy. You don’t know the data protection laws of the Seychelles or Panama. You don’t know which countries can put extra-legal pressure on companies operating within their jurisdiction. You don’t know who actually owns and runs the VPNs. You don’t even know which foreign companies the NSA has targeted for mass surveillance. All you can do is make your best guess, and hope you guessed well.

Paul van Oorschot’s Computer Security and the Internet

[2021.06.17] Paul van Oorschot’s webpage contains a complete copy of his book: Computer Security and the Internet: Tools and Jewels. It’s worth reading.

Intentional Flaw in GPRS Encryption Algorithm GEA-1

[2021.06.17] General Packet Radio Service (GPRS) is a mobile data standard that was widely used in the early 2000s. The first encryption algorithm for that standard was GEA-1, a stream cipher built on three linear-feedback shift registers and a non-linear combining function. Although the algorithm has a 64-bit key, the effective key length is only 40 bits, due to “an exceptional interaction of the deployed LFSRs and the key initialization, which is highly unlikely to occur by chance.”

GEA-1 was designed by the European Telecommunications Standards Institute in 1998. ETSI was — and maybe still is — under the auspices of SOGIS: the Senior Officials Group, Information Systems Security. That’s basically the intelligence agencies of the EU countries.

Details are in the paper: “Cryptanalysis of the GPRS Encryption Algorithms GEA-1 and GEA-2.” GEA-2 does not have the same flaw, although the researchers found a practical attack with enough keystream.

Hacker News thread.

EDITED TO ADD (6/18): News article.

Peloton Vulnerability Found and Fixed

[2021.06.18] Researchers have discovered a vulnerability in Peloton stationary bicycles, one that would give the attacker complete control over the device.

The attack requires physical access to the Peloton, so it’s not really a practical attack. President Biden’s Peloton was not in danger.

The Future of Machine Learning and Cybersecurity

[2021.06.21] The Center for Security and Emerging Technology has a new report: “Machine Learning and Cybersecurity: Hype and Reality.” Here’s the bottom line:

The report offers four conclusions:

- Machine learning can help defenders more accurately detect and triage potential attacks. However, in many cases these technologies are elaborations on long-standing methods — not fundamentally new approaches — that bring new attack surfaces of their own.

- A wide range of specific tasks could be fully or partially automated with the use of machine learning, including some forms of vulnerability discovery, deception, and attack disruption. But many of the most transformative of these possibilities still require significant machine learning breakthroughs.

- Overall, we anticipate that machine learning will provide incremental advances to cyber defenders, but it is unlikely to fundamentally transform the industry barring additional breakthroughs. Some of the most transformative impacts may come from making previously un- or under-utilized defensive strategies available to more organizations.

- Although machine learning will be neither predominantly offense-biased nor defense-biased, it may subtly alter the threat landscape by making certain types of strategies more appealing to attackers or defenders.

Apple Will Offer Onion Routing for iCloud/Safari Users

[2021.06.22] At this year’s Apple Worldwide Developer Conference, Apple announced something called “iCloud Private Relay.” That’s basically its private version of onion routing, which is what Tor does.

Privacy Relay is built into both the forthcoming iOS and MacOS versions, but it will only work if you’re an iCloud Plus subscriber and you have it enabled from within your iCloud settings.

Once it’s enabled and you open Safari to browse, Private Relay splits up two pieces of information that — when delivered to websites together as normal — could quickly identify you. Those are your IP address (who and exactly where you are) and your DNS request (the address of the website you want, in numeric form).

Once the two pieces of information are split, Private Relay encrypts your DNS request and sends both the IP address and now-encrypted DNS request to an Apple proxy server. This is the first of two stops your traffic will make before you see a website. At this point, Apple has already handed over the encryption keys to the third party running the second of the two stops, so Apple can’t see what website you’re trying to access with your encrypted DNS request. All Apple can see is your IP address.

Although it has received both your IP address and encrypted DNS request, Apple’s server doesn’t send your original IP address to the second stop. Instead, it gives you an anonymous IP address that is approximately associated with your general region or city.

Not available in China, of course — and also Belarus, Colombia, Egypt, Kazakhstan, Saudi Arabia, South Africa, Turkmenistan, Uganda, and the Philippines.

Mollitiam Industries is the Newest Cyberweapons Arms Manufacturer

[2021.06.23] Wired is reporting on a company called Mollitiam Industries:

Marketing materials left exposed online by a third-party claim Mollitiam’s interception products, dubbed “Invisible Man” and “Night Crawler,” are capable of remotely accessing a target’s files, location, and covertly turning on a device’s camera and microphone. Its spyware is also said to be equipped with a keylogger, which means every keystroke made on an infected device — including passwords, search queries and messages sent via encrypted messaging apps — can be tracked and monitored.

To evade detection, the malware makes use of the company’s so-called “invisible low stealth technology” and its Android product is advertised as having “low data and battery consumption” to prevent people from suspecting their phone or tablet has been infected. Mollitiam is also currently marketing a tool that it claims enables “mass surveillance of digital profiles and identities” across social media and the dark web.

Banning Surveillance-Based Advertising

[2021.06.24] The Norwegian Consumer Council just published a fantastic new report: “Time to Ban Surveillance-Based Advertising.” From the Introduction:

The challenges caused and entrenched by surveillance-based advertising include, but are not limited to:

- privacy and data protection infringements

- opaque business models

- manipulation and discrimination at scale

- fraud and other criminal activity

- serious security risks

In the following chapters, we describe various aspects of these challenges and point out how today’s dominant model of online advertising is a threat to consumers, democratic societies, the media, and even to advertisers themselves. These issues are significant and serious enough that we believe that it is time to ban these detrimental practices.

A ban on surveillance-based practices should be complemented by stronger enforcement of existing legislation, including the General Data Protection Regulation, competition regulation, and the Unfair Commercial Practices Directive. However, enforcement currently consumes significant time and resources, and usually happens after the damage has already been done. Banning surveillance-based advertising in general will force structural changes to the advertising industry and alleviate a number of significant harms to consumers and to society at large.

A ban on surveillance-based advertising does not mean that one can no longer finance digital content using advertising. To illustrate this, we describe some possible ways forward for advertising-funded digital content, and point to alternative advertising technologies that may contribute to a safer and healthier digital economy for both consumers and businesses.

Press release. Press coverage.

I signed their open letter.

AI-Piloted Fighter Jets

[2021.06.25] News from Georgetown’s Center for Security and Emerging Technology:

China Claims Its AI Can Beat Human Pilots in Battle: Chinese state media reported that an AI system had successfully defeated human pilots during simulated dogfights. According to the Global Times report, the system had shot down several PLA pilots during a handful of virtual exercises in recent years. Observers outside China noted that while reports coming out of state-controlled media outlets should be taken with a grain of salt, the capabilities described in the report are not outside the realm of possibility. Last year, for example, an AI agent defeated a U.S. Air Force F-16 pilot five times out of five as part of DARPA’s AlphaDogfight Trial (which we covered at the time). While the Global Times report indicated plans to incorporate AI into future fighter planes, it is not clear how far away the system is from real-world testing. At the moment, the system appears to be used only for training human pilots. DARPA, for its part, is aiming to test dogfights with AI-piloted subscale jets later this year and with full-scale jets in 2023 and 2024.

- More: “AI weapons” in China’s military innovation | AI Could Enable ‘Swarm Warfare’ for Tomorrow’s Fighter Jets

NFC Flaws in POS Devices and ATMs

[2021.06.28] It’s a series of vulnerabilities:

Josep Rodriguez, a researcher and consultant at security firm IOActive, has spent the last year digging up and reporting vulnerabilities in the so-called near-field communications reader chips used in millions of ATMs and point-of-sale systems worldwide. NFC systems are what let you wave a credit card over a reader — rather than swipe or insert it — to make a payment or extract money from a cash machine. You can find them on countless retail store and restaurant counters, vending machines, taxis, and parking meters around the globe.

Now Rodriguez has built an Android app that allows his smartphone to mimic those credit card radio communications and exploit flaws in the NFC systems’ firmware. With a wave of his phone, he can exploit a variety of bugs to crash point-of-sale devices, hack them to collect and transmit credit card data, invisibly change the value of transactions, and even lock the devices while displaying a ransomware message. Rodriguez says he can even force at least one brand of ATMs to dispense cashthough that “jackpotting” hack only works in combination with additional bugs he says he’s found in the ATMs’ software. He declined to specify or disclose those flaws publicly due to nondisclosure agreements with the ATM vendors.

Risks of Evidentiary Software

[2021.06.29] Over at Lawfare, Susan Landau has an excellent essay on the risks posed by software used to collect evidence (a Breathalyzer is probably the most obvious example).

Bugs and vulnerabilities can lead to inaccurate evidence, but the proprietary nature of software makes it hard for defendants to examine it.

The software engineers proposed a three-part test. First, the court should have access to the “Known Error Log,” which should be part of any professionally developed software project. Next the court should consider whether the evidence being presented could be materially affected by a software error. Ladkin and his co-authors noted that a chain of emails back and forth are unlikely to have such an error, but the time that a software tool logs when an application was used could easily be incorrect. Finally, the reliability experts recommended seeing whether the code adheres to an industry standard used in an non-computerized version of the task (e.g., bookkeepers always record every transaction, and thus so should bookkeeping software).

[…]

Inanimate objects have long served as evidence in courts of law: the door handle with a fingerprint, the glove found at a murder scene, the Breathalyzer result that shows a blood alcohol level three times the legal limit. But the last of those examples is substantively different from the other two. Data from a Breathalyzer is not the physical entity itself, but rather a software calculation of the level of alcohol in the breath of a potentially drunk driver. As long as the breath sample has been preserved, one can always go back and retest it on a different device.

What happens if the software makes an error and there is no sample to check or if the software itself produces the evidence? At the time of our writing the article on the use of software as evidence, there was no overriding requirement that law enforcement provide a defendant with the code so that they might examine it themselves.

[…]

Given the high rate of bugs in complex software systems, my colleagues and I concluded that when computer programs produce the evidence, courts cannot assume that the evidentiary software is reliable. Instead the prosecution must make the code available for an “adversarial audit” by the defendant’s experts. And to avoid problems in which the government doesn’t have the code, government procurement contracts must include delivery of source code — code that is more-or-less readable by people — for every version of the code or device.

Insurance and Ransomware

[2021.07.01] As ransomware becomes more common, I’m seeing more discussions about the ethics of paying the ransom. Here’s one more contribution to that issue: a research paper that the insurance industry is hurting more than it’s helping.

However, the most pressing challenge currently facing the industry is ransomware. Although it is a societal problem, cyber insurers have received considerable criticism for facilitating ransom payments to cybercriminals. These add fuel to the fire by incentivising cybercriminals’ engagement in ransomware operations and enabling existing operators to invest in and expand their capabilities. Growing losses from ransomware attacks have also emphasised that the current reality is not sustainable for insurers either.

To overcome these challenges and champion the positive effects of cyber insurance, this paper calls for a series of interventions from government and industry. Some in the industry favour allowing the market to mature on its own, but it will not be possible to rely on changing market forces alone. To date, the UK government has taken a light-touch approach to the cyber insurance industry. With the market undergoing changes amid growing losses, more coordinated action by government and regulators is necessary to help the industry reach its full potential.

The interventions recommended here are still relatively light, and reflect the fact that cyber insurance is only a potential incentive for managing societal cyber risk.They include: developing guidance for minimum security standards for underwriting; expanding data collection and data sharing; mandating cyber insurance for government suppliers; and creating a new collaborative approach between insurers and intelligence and law enforcement agencies around ransomware.

Finally, although a well-functioning cyber insurance industry could improve cyber security practices on a societal scale, it is not a silver bullet for the cyber security challenge. It is important to remember that the primary purpose of cyber insurance is not to improve cyber security, but to transfer residual risk. As such, it should be one of many tools that governments and businesses can draw on to manage cyber risk more effectively.

Basically, the insurance industry incents companies to do the cheapest mitigation possible. Often, that’s paying the ransom.

News article.

More Russian Hacking

[2021.07.02] Two reports this week. The first is from Microsoft, which wrote:

As part of our investigation into this ongoing activity, we also detected information-stealing malware on a machine belonging to one of our customer support agents with access to basic account information for a small number of our customers. The actor used this information in some cases to launch highly-targeted attacks as part of their broader campaign.

The second is from the NSA, CISA, FBI, and the UK’s NCSC, which wrote that the GRU is continuing to conduct brute-force password guessing attacks around the world, and is in some cases successful. From the NSA press release:

Once valid credentials were discovered, the GTsSS combined them with various publicly known vulnerabilities to gain further access into victim networks. This, along with various techniques also detailed in the advisory, allowed the actors to evade defenses and collect and exfiltrate various information in the networks, including mailboxes.

News article.

Stealing Xbox Codes

[2021.07.05] Detailed story of Volodymyr Kvashuk, a Microsoft insider who noticed a bug in the company’s internal systems that allowed him to create unlimited Xbox gift cards, and stole $10.1 million before he was caught.

Vulnerability in the Kaspersky Password Manager

[2021.07.06] A vulnerability (just patched) in the random number generator used in the Kaspersky Password Manager resulted in easily guessable passwords:

The password generator included in Kaspersky Password Manager had several problems. The most critical one is that it used a PRNG not suited for cryptographic purposes. Its single source of entropy was the current time. All the passwords it created could be bruteforced in seconds. This article explains how to securely generate passwords, why Kaspersky Password Manager failed, and how to exploit this flaw. It also provides a proof of concept to test if your version is vulnerable.

The product has been updated and its newest versions aren’t affected by this issue.

Stupid programming mistake, or intentional backdoor? We don’t know.

More generally: generating random numbers is hard. I recommend my own algorithm: Fortuna. I also recommend my own password manager: Password Safe.

EDITED TO ADD: Commentary from Matthew Green.

Details of the REvil Ransomware Attack

[2021.07.08] ArsTechnica has a good story on the REvil ransomware attack of last weekend, with technical details:

This weekend’s attack was carried out with almost surgical precision. According to Cybereason, the REvil affiliates first gained access to targeted environments and then used the zero-day in the Kaseya Agent Monitor to gain administrative control over the target’s network. After writing a base-64-encoded payload to a file named agent.crt the dropper executed it.

[…]

The ransomware dropper Agent.exe is signed with a Windows-trusted certificate that uses the registrant name “PB03 TRANSPORT LTD.” By digitally signing their malware, attackers are able to suppress many security warnings that would otherwise appear when it’s being installed. Cybereason said that the certificate appears to have been used exclusively by REvil malware that was deployed during this attack.

To add stealth, the attackers used a technique called DLL Side-Loading, which places a spoofed malicious DLL file in a Windows’ WinSxS directory so that the operating system loads the spoof instead of the legitimate file. In the case here, Agent.exe drops an outdated version that is vulnerable to DLL Side-Loading of “msmpeng.exe,” which is the file for the Windows Defender executable.

Once executed, the malware changes the firewall settings to allow local windows systems to be discovered. Then, it starts to encrypt the files on the system….

REvil is demanding $70 million for a universal decryptor that will recover the data from the 1,500 affected Kaseya customers.

More news.

Note that this is yet another supply-chain attack. Instead of infecting those 1,500 networks directly, REvil infected a single managed service provider. And it leveraged a zero-day vulnerability in that provider.

EDITED TO ADD (7/13): Employees warned Kaseya’s management for years about critical security flaws, but they were ignored.

Analysis of the FBI’s Anom Phone

[2021.07.12] Motherboard got its hands on one of those Anom phones that were really FBI honeypots.

The details are interesting.

Iranian State-Sponsored Hacking Attempts

[2021.07.13] Interesting attack:

Masquerading as UK scholars with the University of London’s School of Oriental and African Studies (SOAS), the threat actor TA453 has been covertly approaching individuals since at least January 2021 to solicit sensitive information. The threat actor, an APT who we assess with high confidence supports Islamic Revolutionary Guard Corps (IRGC) intelligence collection efforts, established backstopping for their credential phishing infrastructure by compromising a legitimate site of a highly regarded academic institution to deliver personalized credential harvesting pages disguised as registration links. Identified targets included experts in Middle Eastern affairs from think tanks, senior professors from well-known academic institutions, and journalists specializing in Middle Eastern coverage.

These connection attempts were detailed and extensive, often including lengthy conversations prior to presenting the next stage in the attack chain. Once the conversation was established, TA453 delivered a “registration link” to a legitimate but compromised website belonging to the University of London’s SOAS radio. The compromised site was configured to capture a variety of credentials. Of note, TA453 also targeted the personal email accounts of at least one of their targets. In subsequent phishing emails, TA453 shifted their tactics and began delivering the registration link earlier in their engagement with the target without requiring extensive conversation. This operation, dubbed SpoofedScholars, represents one of the more sophisticated TA453 campaigns identified by Proofpoint.

The report details the tactics.

News article.

China Taking Control of Zero-Day Exploits

[2021.07.14] China is making sure that all newly discovered zero-day exploits are disclosed to the government.

Under the new rules, anyone in China who finds a vulnerability must tell the government, which will decide what repairs to make. No information can be given to “overseas organizations or individuals” other than the product’s manufacturer.

No one may “collect, sell or publish information on network product security vulnerabilities,” say the rules issued by the Cyberspace Administration of China and the police and industry ministries.

This just blocks the cyber-arms trade. It doesn’t prevent researchers from telling the products’ companies, even if they are outside of China.

Upcoming Speaking Engagements

[2021.07.14] This is a current list of where and when I am scheduled to speak:

- I’m speaking at Norbert Wiener in the 21st Century, a virtual conference hosted by The IEEE Society on Social Implications of Technology (SSIT), July 23-25, 2021.

- I’m speaking at DEFCON 29, August 5-8, 2021.

- I’m speaking (via Internet) at SHIFT Business Festival in Finland, August 25-26, 2021.

- I’ll be speaking at an Informa event on September 14, 2021. Details to come.

- I’m keynoting CIISec Live — an all-online event — September 15-16, 2021.

- I’m speaking at the Cybersecurity and Data Privacy Law Conference in Plano, Texas, USA, September 22-23, 2021.

The list is maintained on this page.

Since 1998, CRYPTO-GRAM has been a free monthly newsletter providing summaries, analyses, insights, and commentaries on security technology. To subscribe, or to read back issues, see Crypto-Gram’s web page.

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Bruce Schneier is an internationally renowned security technologist, called a security guru by the Economist. He is the author of over one dozen books — including his latest, We Have Root — as well as hundreds of articles, essays, and academic papers. His newsletter and blog are read by over 250,000 people. Schneier is a fellow at the Berkman Klein Center for Internet & Society at Harvard University; a Lecturer in Public Policy at the Harvard Kennedy School; a board member of the Electronic Frontier Foundation, AccessNow, and the Tor Project; and an Advisory Board Member of the Electronic Privacy Information Center and VerifiedVoting.org. He is the Chief of Security Architecture at Inrupt, Inc.

Copyright © 2021 by Bruce Schneier.