Monday, October 05, 2015

For the PLA, Cyber War is the Battle of Triangle Hill

In June 2011 I wrote a blog post with the ever polite title China's View Is More Important Than Yours. I was frustrated with the Western-centric, inward-focused view of many commentators, which put themselves at the center of debates over digital conflict, neglecting the possibility that other parties could perceive the situation differently. I remain concerned that while Western thinkers debate war using Western, especially Clausewitzian, models, Eastern adversaries, including hybrid Eastern-Western cultures, perceive war in their own terms.

I wrote in June 2011:

The Chinese military sees Western culture, particularly American culture, as an assault on China, saying "the West uses a system of values (democracy, freedom, human rights, etc.) in a long-term attack on socialist countries...

Marxist theory opposes peaceful evolution, which... is the basic Western tactic for subverting socialist countries" (pp 102-3). They believe the US is conducting psychological warfare operations against socialism and consider culture as a "frontier" that has extended beyond American shores into the Chinese mainland.

The Chinese therefore consider control of information to be paramount, since they do not trust their population to "correctly" interpret American messaging (hence the "Great Firewall of China"). In this sense, China may consider the US as the aggressor in an ongoing cyberwar.

Today thanks to a Tweet by Jennifer McArdle I noticed a May 2015 story featuring a translation of a People's Daily article. The English translation is posted as Cybersovereignty Symbolizes National Sovereignty.

I recommend reading the whole article, but the following captures the spirit of the message:

Western hostile forces and a small number of “ideological traitors” in our country use the network, and relying on computers, mobile phones and other such information terminals, maliciously attack our Party, blacken the leaders who founded the New China, vilify our heroes, and arouse mistaken thinking trends of historical nihilism, with the ultimate goal of using “universal values” to mislead us, using “constitutional democracy” to throw us into turmoil, use “colour revolutions” to overthrow us, use negative public opinion and rumours to oppose us, and use “de-partification and depoliticization of the military” to upset us.

This article demonstrates that, four years after my first post, there are still elements, at least in the PLA, who believe that China is fighting a cyber war, and that the US started it.

I thought the last line from the PLA Daily article was especially revealing:

Only if we act as we did at the time of the Battle of Triangle Hill, are riveted to the most forward position of the battlefield and the fight in this ideological struggle, are online “seed machines and propaganda teams”, and arouse hundreds and thousands in the “Red Army”, will we be able to be good shock troops and fresh troops in the construction of the “Online Great Wall”, and will we be able to endure and vanquish in this protracted, smokeless war.

The Battle of Triangle Hill was an engagement during the Korean War, with Chinese forces fighting American, South Korean, Ethiopian, and Colombian forces. Both sides suffered heavy losses over a protracted engagement, although the Chinese appear to have lost more and viewed their attrition strategy as worthwhile. It's ominous this PLA editorial writer decided to cite a battle between US and Chinese forces to communicate his point about online conflict, but it should make it easier for American readers to grasp the seriousness of the issue in Chinese minds.

Saturday, October 03, 2015

Personal Info Stolen? Seven Response Steps

Yesterday on Bloomberg West, host Emily Chang reported on a breach that affected her personally identifiable information (PII). She asked what she should do now that she is a victim of data theft. This is my answer.

First, I recommend changing passwords for any accounts associated with the breached entities.

Second, if you used the same passwords from the breached entities at unrelated sites, change passwords at those other sites.

Third, if any of those entities offer two factor authentication, enable it. This likely involves getting a code via text message or using an app that generates codes.

Fourth, read Brian Krebs' post How I Learned to Stop Worrying and Embrace the Security Freeze. It's a personal decision to go all the way to enable a security freeze. I recommend everyone who has been a PII or credit data theft victim, at the minimum, to enable a "fraud alert." Why? It's free, and you can sign up online with one credit bureau and the others will enable it as well. The downside is that it expires 90 days later, unless you re-enable it. So, set a reminder in your calendar app to renew before the 90 days expire.

Fifth, create a schedule to periodically check your credit reports. Theft victims usually get credit monitoring for free, but everyone should take advantage of, the FTC-authorized place to order credit reports, once per year, for free. For example, get one bureau's report in January, a second in May, the third in September, and repeat with the first the next January.

Sixth, visit your credit, investing, and bank Web sites, and enable every kind of monitoring and alerting you can handle. I like to know about every purchase, withdrawal, deposit, etc. via email. Also keep a close eye on your statements for odd purchases.

Last, secure your email. Email is the key to your online existence. Use a provider that takes security seriously and provides two factor authentication.

Good luck!

Tuesday, September 29, 2015

Attribution: OPM vs Sony

I read Top U.S. spy skeptical about U.S.-China cyber agreement based on today's Senate Armed Services Committee hearing titled United States Cybersecurity Policy and Threats. It contained this statement:

U.S. officials have linked the OPM breach to China, but have not said whether they believe its government was responsible.

[Director of National Intelligence] Clapper said no definite statement had been made about the origin of the OPM hack since officials were not fully confident about the three types of evidence that were needed to link an attack to a given country: the geographic point of origin, the identity of the "actual perpetrator doing the keystrokes," and who was responsible for directing the act.

I thought this was interesting for several reasons. First, does DNI Clapper mean that the US government has not made an official statement regarding attribution for China and OPM because all "three types of evidence" are missing, or do we have one, or perhaps two? If that is the case, which elements do we have, and not have?

Second, how specific is the "actual perpetrator doing the keystrokes"? Did DNI Clapper mean he requires the Intelligence Community to identify a named person, such that the IC knows the responsible team?

Third, and perhaps most importantly, contrast the OPM case with the DPRK hack against Sony Pictures Entertainment. Assuming that DNI Clapper and the IC applied these "three types of evidence" for SPE, that means the attribution included the geographic point of origin, the identity of the "actual perpetrator doing the keystrokes," and the identity of the party directing the attack, which was the DPRK. The DNI mentioned "broad consensus across the IC regarding attribution," which enabled the administration to apply sanctions in response.

For those wondering if the DNI is signalling a degradation in attribution capabilities, I direct you to his statement, which says in the attribution section:

Although cyber operations can infiltrate or disrupt targeted ICT networks, most can no longer assume their activities will remain undetected indefinitely. Nor can they assume that if detected, they will be able to conceal their identities. Governmental and private sector security professionals have made significant advances in detecting and attributing cyber intrusions.

I was pleased to see the DNI refer to the revolution in private sector and security intelligence capabilities.

Sunday, September 13, 2015

Good Morning Karen. Cool or Scary?

Last month I spoke at a telecommunications industry event. The briefer before me showed a video by the Hypervoice Consortium, titled Introducing Human Technology: Communications 2025. It consists of a voiceover by a 2025-era Siri-like assistant, speaking to her owner, "Karen." The assistant describes what's happening with Karen's household. 15 seconds into the video, the assistant says:

The report is due today. I've cleared your schedule so you can focus. Any attempt to override me will be politely rebuffed.

I was already feeling uncomfortable with the scenario, but that is the point at which I really started to squirm. I'll leave it to you to watch the rest of the video and report how you feel about it.

My general conclusion was that I'm wary of putting so much trust in a platform that is likely to be targeted by intruders, such that they can manipulate so many aspects of a person's life. What do you think?

By the way, the briefer before me noted that every vision of the future appears to involve solving the "low on milk problem."

Monday, September 07, 2015

Are Self-Driving Cars Fatally Flawed?

I read the following in the Guardian story Hackers can trick self-driving cars into taking evasive action.

Hackers can easily trick self-driving cars into thinking that another car, a wall or a person is in front of them, potentially paralysing it or forcing it to take evasive action.

Automated cars use laser ranging systems, known as lidar, to image the world around them and allow their computer systems to identify and track objects. But a tool similar to a laser pointer and costing less than $60 can be used to confuse lidar...

The following appeared in the IEEE Spectrum story Researcher Hacks Self-driving Car Sensors.

Using such a system, attackers could trick a self-driving car into thinking something is directly ahead of it, thus forcing it to slow down. Or they could overwhelm it with so many spurious signals that the car would not move at all for fear of hitting phantom obstacles...

Petit acknowledges that his attacks are currently limited to one specific unit but says, “The point of my work is not to say that IBEO has a poor product. I don’t think any of the lidar manufacturers have thought about this or tried this.” 

I had the following reactions to these stories.

First, it's entirely possible that self-driving car manufacturers know about this attack model. They might have decided that it's worth producing cars despite the technical vulnerability. For example, there is no defense in WiFi for jamming the RF spectrum. There are also non-RF jamming methods to disrupt WiFi, as detailed here. Nevertheless, WiFi is everywhere, but lives usually don't depend on it.

Second, researcher Jonathan Petit appears to have tested an IBEO Lux lidar unit and not a real self-driving car. We don't know, from the Guardian or IEEE Spectrum articles at least, how a Google self-driving car would handle this attack. Perhaps the vendors have already compensated for it.

Third, these articles may undermine one of the presumed benefits of self-driving cars: that they are supposed to be safer than human drivers. If self-driving car technology is vulnerable to an attack not found in driver-controlled cars, that is a problem.

Fourth, does this attack mean that driver-controlled cars with similar technology are also vulnerable, or will be? Are there corresponding attacks for systems that detect obstacles on the road and trigger the brakes before the driver can physically respond?

Last, these articles demonstrate the differences between safety and security. Safety, in general, is a discipline designed to improve the well-being of people facing natural, environmental, mindless threats. Security, in contrast, is designed to counter intelligent, adaptive adversaries. I am predisposed to believe that self-driving car manufacturers have focused on the safety aspects of their products far more than the security aspects. It's time to address that imbalance.

Friday, August 14, 2015

Top Ten Books Policymakers Should Read on Cyber Security

I've been meeting with policymakers of all ages and levels of responsibility during the last few months. Frequently they ask "what can I read to better understand cyber security?" I decided to answer them collectively in this quick blog post.

By posting these, I am not endorsing everything they say (with the exception of the last book). On balance, however, I think they provide a great introduction to current topics in digital security.

  1. Cybersecurity and Cyberwar: What Everyone Needs to Know by Peter W. Singer and Allan Friedman
  2. Countdown to Zero Day: Stuxnet and the Launch of the World's First Digital Weapon by Kim Zetter
  3. @War: The Rise of the Military-Internet Complex by Shane Harris
  4. China and Cybersecurity: Espionage, Strategy, and Politics in the Digital Domain by  Jon R. Lindsay, Tai Ming Cheung, and Derek S. Reveron
  5. Data and Goliath: The Hidden Battles to Collect Your Data and Control Your World by Bruce Schneier
  6. Spam Nation: The Inside Story of Organized Cybercrime-from Global Epidemic to Your Front Door by Brian Krebs
  7. Future Crimes: Everything Is Connected, Everyone Is Vulnerable and What We Can Do About It by Marc Goodman
  8. Chinese Industrial Espionage: Technology Acquisition and Military Modernisation by William C. Hannas, James Mulvenon, and Anna B. Puglisi 
  9. Cyber War Will Not Take Place by Thomas Rid
  10. The Practice of Network Security Monitoring: Understanding Incident Detection and Response by Richard Bejtlich (use code NSM101 to save 30%; I prefer the print copy!)


Friday, August 07, 2015

Effect of Hacking on Stock Price, Or Not?

I read Brian Krebs story Tech Firm Ubiquiti Suffers $46M Cyberheist just now. He writes:

Ubiquiti, a San Jose based maker of networking technology for service providers and enterprises, disclosed the attack in a quarterly financial report filed this week [6 August; RMB] with the U.S. Securities and Exchange Commission (SEC). The company said it discovered the fraud on June 5, 2015, and that the incident involved employee impersonation and fraudulent requests from an outside entity targeting the company’s finance department.

“This fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties,” Ubiquiti wrote. “As soon as the Company became aware of this fraudulent activity it initiated contact with its Hong Kong subsidiary’s bank and promptly initiated legal proceedings in various foreign jurisdictions. As a result of these efforts, the Company has recovered $8.1 million of the amounts transferred.”

Brian credits Brian Honan at CSO Online, with noticing the disclosure yesterday.

This is a terrible crime that I would not wish upon anyone. My interest in this issue has nothing to do with Ubiquiti as a company, nor is it intended as a criticism of the company. The ultimate fault lies with the criminals who perpetrated this fraud. The purpose of this post is to capture some details for the benefit of analysis, history, and discussion.

The first question I had was: did this event have an effect on the Ubiquiti stock price? The FY fourth quarter results were released at 4:05 pm ET on Thursday 6 August 2015, after the market closed.

The "Fourth Quarter Financial Summary: listed this as the last bullet:

"GAAP net income and diluted EPS include a $39.1 million business e-mail compromise ("BEC") fraud loss as disclosed in the Form 8-K filed on August 6, 2015"

I assume the Form 8-K was published simultaneously, with earnings.

Next I found the following in this five day stock chart.

5 day UBNT Chart (3-7 August 2015)

You can see the gap down from Thursday's closing price, on the right side of the chart. Was that caused by the fraud charge?

I looked to see what the financial press had to say. I found this Motley Fool article titled Why Ubiquiti Networks, Inc. Briefly Fell 11% on Friday, posted at 12:39 PM (presumably ET). However, this article had nothing to say about the fraud.

Doing a little more digging, I saw Seeking Alpha caught the fraud immediately, posting Ubiquiti discloses $39.1M fraud loss; shares -2.9% post-earnings at 4:24 PM (presumably ET).  They noted that "accounting chief Rohit Chakravarthy has resigned." I learned that the company was already lacking a chief financial officer, so Mr. Chakravarthy was filling the role temporarily. Perhaps that contributed to the company falling victim to the ruse. Could Ubiquiti have been targeted for that reason?

I did some more digging, but it looks like the popular press didn't catch the issue until Brian Honan and Brian Krebs brought attention to the fraud angle of the earnings release, early today.

Next I listened to the archive of the earnings call. The call was a question-and-answer session, rather than a statement by management followed by Q and A. I listened to analysts ask about head count, South American sales, trademark names, shipping new products, and voice and video. Not until the 17 1/2 minute mark did an analyst ask about the fraud.

CEO Robert J. Pera said he was surprised no one had asked until that point in the call. He said he was embarrassed by the incident and it reflected "incredibly poor judgement and incompetence" by a few people in the accounting department.

Finally, returning to the stock chart, you see a gap down, but recovery later in the session. The market seems to view this fraud as a one-time event that will not seriously affect future performance. That is my interpretation, anyway. I wish Ubiquiti well, and I hope others can learn from their misfortune.

Update: I forgot to add this before hitting "post":

Ubiquiti had FY fourth quarter revenues of $145.3 million. The fraud is a serious portion of that number. If Ubiquiti had earned ten times that in revenue, or more, would the fraud have required disclosure?

The disclosure noted:

"As a result of this investigation, the Company, its Audit Committee and advisors have concluded that the Company’s internal control over financial reporting is ineffective due to one or more material weaknesses."

That sounds like code for a Sarbanes-Oxley issue, so I believe they would have reported anyway, regardless of revenue-to-fraud proportions.