Ukraine software firm says computers compromised after cyber attack

FILE PHOTO - A projection of cyber code on a hooded man is pictured in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

KIEV (Reuters) – The Ukrainian software firm at the center of a cyber attack that spread around the world last week said on Wednesday that computers which use its accounting software are compromised by a so-called “backdoor” installed by hackers during the attack.

The backdoor has been installed in every computer that wasn’t offline during the cyber attack, said Olesya Bilousova, the chief executive of Intellect Service, which developed M.E.Doc, Ukraine’s most popular accounting software.

Last week’s cyber attack spread from Ukraine and knocked out thousands of computers, disrupting shipping and shut down a chocolate factory in Australia as it reached dozens of countries around the world.

Ukrainian politicians were quick to blame Russia for a state-sponsored hack, which Moscow denied, while Ukranian cyber police and some experts say the attack was likely a smokescreen for the hackers to install new malware.

The Ukrainian police have seized M.E.Doc’s servers and taken them offline. On Wednesday morning they advised every computer using M.E.Doc software to be switched off. M.E.Doc is installed in around 1 million computers in Ukraine, Bilousova said.

“… the fact is that this backdoor needs to be closed. There was a hacking of servers,” Bilousova told reporters.

“As of today, every computer which is on the same local network as our product is a threat. We need to pay the most attention to those computers which weren’t affected (by the attack). The virus is on them waiting for a signal. There are fingerprints on computers which didn’t even use our product.”

(Reporting by Jack Stubbs; writing by Matthias Williams; Editing by Toby Chopra)

Family firm in Ukraine says it was not responsible for cyber attack

Sergei Linnik, general director of Ukrainian software development firm Intellect Service, and his daughter Olesya pose for a picture at the company’s offices in Kiev, Ukraine July 3, 2017. REUTERS/Pavel Polityuk

By Jack Stubbs and Pavel Polityuk

KIEV (Reuters) – Ukrainian company Intellect Service was not responsible for last week’s international cyber attack that brought down the computer systems of several major companies, the father and daughter team told Reuters on Monday.

Cyber security investigators are still trying to establish who was behind the attack.

But Ukrainian officials and security firms including Microsoft <MSFT.O>, Cisco’s <CSCO.O> Talos and Symantec <SYMC.O> say they have confirmed that some of the initial infections occurred when malware was transmitted to users of a Ukrainian tax software program called M.E.Doc.

They say the virus, dubbed NotPetya by some experts, was primarily spread via an update issued by M.E.Doc, the accounting software developed by Olesya Linnik and her father Sergei at his company, Intellect Service.

In their first interview with foreign media since the attack, the Linniks said there was no evidence M.E.Doc, which is Ukraine’s most-popular accounting software, was used to spread the virus and they did not understand the charges against them.

“What has been established in these days, when no one slept and only worked? We studied and analysed our product for signs of hacking – it is not infected with a virus and everything is fine, it is safe,” said Olesya, managing partner at Intellect Service.

“The update package, which was sent out long before the virus was spread, we checked it 100 times and everything is fine.”

Little known outside Ukrainian accounting circles, M.E.Doc is an everyday part of life at around 80 percent of companies in Ukraine. The software allows its 400,000 clients to send and discuss financial documents between internal departments, as well as file them with the Ukrainian state tax service.

POLICE INVESTIGATING

Investigators have said M.E.Doc’s expansive reach is what made it a prime target for the unknown hackers, who were looking for a way to infect as many victims as possible.

“These malware families were spread using Ukrainian accounting software called M.E.Doc,” researchers at Slovakian security software firm ESET said in a blog post on Friday.

“M.E.Doc has an internal messaging and document exchange system so attackers could send spearphishing messages to victims.”

Ukrainian police said on Monday the Linniks could now face criminal charges if it is confirmed they knew about the infection but took no action.

“We have issues with the company’s leadership, because they knew there was a virus in their software but didn’t do anything … if this is confirmed, we will bring charges,” Serhiy Demedyuk, the head of Ukraine’s cyber police, told Reuters in a text message.

Speaking before Demedyuk’s comments at the company’s modest offices on an industrial estate in Kiev, Sergei, Intellect Service’s general director, raised his voice in frustration.

“We built this business over 20 years. What is the point of us killing our own business?”

Olesya said the company was cooperating with investigators and the police were yet to reach any conclusions.

“The cyber police are currently bogged down in the investigation, we gave them the logs of all our servers and there are no traces that our servers spread this virus,” she said.

“M.E.Doc is a transportation product, it delivers documents. But is an email program guilty in the distribution of a virus? Hardly.”

(Writing by Jack Stubbs; Editing by Anna Willard)

Global shipping feels fallout from Maersk cyber attack

The Maersk ship Adrian Maersk is seen as it departs from New York Harbor in New York City, U.S., June 27, 2017. REUTERS/Brendan McDermid

By Jonathan Saul

LONDON (Reuters) – Global shipping is still feeling the effects of a cyber attack that hit A.P. Moller-Maersk <MAERSKb.CO> two days ago, showing the scale of the damage a computer virus can unleash on the technology dependent and inter-connected industry.

About 90 percent of world trade is transported by sea, with ships and ports acting as the arteries of the global economy. Ports increasingly rely on communications systems to keep operations running smoothly, and any IT glitches can create major disruptions for complex logistic supply chains.

The cyber attack was among the biggest-ever disruptions to hit global shipping. Several port terminals run by a Maersk division, including in the United States, India, Spain, the Netherlands, were still struggling to revert to normal operations on Thursday after experiencing massive disruptions.

South Florida Container Terminal, for example, said dry cargo could not be delivered and no container would be received. Anil Diggikar, chairman of JNPT port, near the Indian commercial hub of Mumbai, told Reuters that he did not know “when exactly the terminal will be running smoothly”.

His uncertainty was echoed by Maersk itself, which told Reuters that a number of IT systems were still shut down and that it could not say when normal business operations would be resumed.

It said it was not able to comment on specific questions regarding the breach of its IT systems or the state of its cyber security as it had “all available hands focused on practical stuff and getting things back to normal”.

The impact of the attack on the company has reverberated across the industry given its position as the world’s biggest container shipping line and also operator of 76 ports via its APM Terminals division.

Container ships transport much of the world’s consumer goods and food, while dry bulk ships haul commodities including coal and grain and tankers carry vital oil and gas supplies.

“As Maersk is about 18 percent of all container trade, can you imagine the panic this must be causing in the logistic chain of all those cargo owners all over the world?” said Khalid Hashim, managing director of Precious Shipping <PSL.BK>, one of Thailand’s largest dry cargo ship owners.

“Right now none of them know where any of their cargoes (or)containers are. And this ‘black hole’ of lack of knowledge will continue till Maersk are able to bring back their systems on line.”

BACK TO BASICS

The computer virus, which researchers are calling GoldenEye or Petya, began its spread on Tuesday in Ukraine and affected companies in dozens of countries.

Maersk said the attack had caused outages at its computer systems across the world.

In an example of the turmoil that ensued, the unloading of vessels at the group’s Tacoma terminal was severely slowed on Tuesday and Wednesday, said Dean McGrath, president of the International Longshore and Warehouse Union Local 23 there.

The terminal is a key supply line for the delivery of domestic goods such as milk and groceries and construction materials to Anchorage, Alaska.

“They went back to basics and did everything on paper,” McGrath said.

Ong Choo Kiat, President of U-Ming Marine Transport <2606.TW>, Taiwan’s largest dry bulk ship owner, said the fact Maersk had been affected rang alarm bells for the whole shipping industry as the Danish company was regarded as a leader in IT technology.

“But they ended up one of the first few casualties. I therefore conclude that shipping is lacking behind the other industry in term of cyber security,” he said.

“How long would it takes to catch up? I don’t know. But recently all owners and operators are definitely more aware of the risk of cyber security and beginning to pay more attention to it.”

In a leading transport survey by international law firm Norton Rose Fulbright published this week, 87 percent of respondents from the shipping industry believed cyber attacks would increase over the next five years – a level that was higher than counterparts in the aviation, rail and logistics industries.

VULNERABLE

Apart from the reliance on computer systems, ships themselves are increasingly exposed to interference through electronic navigation devices such as the Global Positioning System (GPS) and lack the backup systems airliners have to prevent crashes, according to cyber security experts.

There were no indications that GPS and other electronic navigation aids were affected by this week’s attack, but security specialists say such systems are vulnerable to signal loss from deliberate jamming by hackers.

Last year, South Korea said hundreds of fishing vessels had returned early to port after its GPS signals were jammed by North Korea, which denied responsibility.

“The Maersk attack raises our awareness of the vulnerability of shipping and ports to technological failure,” said Professor David Last, a previous president of Britain’s Royal Institute of Navigation.

“When GPS fails, ships’ captains lose their principal means of navigation and much of their communications and computer links. They have to slow down and miss port schedules,” said Last, who is also a strategic advisor to the General Lighthouse Authorities of the UK and Ireland.

A number of countries including the UK and the United States are looking into deploying a radar based back up navigation system for ships called eLoran, but this will take time to develop.

David Nordell, head of strategy and policy for London-based think tank, the Centre for Strategic Cyberspace and Security Science, said the global shipping and port industries were vulnerable to cyber attack, because their operating technologies tend to be old.

“It’s certainly possible to imagine that two container ships, or, even worse, oil or gas tankers, could be hacked into colliding, resulting in loss of life and cargo, and perhaps total loss of the vessels,” Nordell said.

“Carried out in a strategically sensitive location such as the Malacca Straits or the Bosphorus, a collision like this could block shipping for enough time to cause serious dislocations to trade.”

SECRETIVE INDUSTRY

Cyber risks also pose challenges for insurance cover.

In a particularly secretive industry, information about the nature of cyber attacks is still scarce, which insurance and shipping officials say is an obstacle to mitigating the risk, which means there are gaps in insurance cover available.

“There has been a lot of non-reporting (of breaches) on ships, and we’re trying efforts where even if there could be anonymous reporting on a platform so we can start to get the information and the data,” said Andrew Kinsey, senior marine consultant at insurer Allianz Global Corporate & Specialty.

There is also a gap in provision, because most existing cyber or hull insurance policies – which insure the ship itself – will not cover the risk of a navigation system being jammed or physical damage to the ship caused by a hacking attack.

“The industry is just waking up to its vulnerability,” said Colin Gillespie, deputy director of loss prevention with ship insurer North.

“Perhaps it is time for insurers, reinsurers, ship operators and port operators to sit down together and consider these risks in detail. A collective response is needed – we are all under attack.”

(Additional reporting by Jacob Gronholt-Pedersen in Copenhagen, Keith Wallis and Carolyn Cohn in London, Euan Rocha in Mumbai, Miyoung Kim in Singapore, Alexander Cornwell in Dubai, Michael Hirtzer in Chicago, Noor Zainab Hussain in Bangalore, Adam Jourdan and Shanghai newsroom; Editing by Pravin Char)

Global business reels from second major cyber attack in two months

Customers queue in 'Rost' supermarket in Kharkiv, Ukraine June 27, 2017 in this picture obtained from social media. MIKHAIL GOLUB via REUTERS

By Eric Auchard and Jack Stubbs

FRANKFURT/MOSCOW (Reuters) – A major cyber attack, believed to have first struck Ukraine, caused havoc around the world on Wednesday, crippling computers or halting operations at port operator Maersk, a Cadbury chocolate plant in Australia and the property arm of French bank BNP Paribas.

Russia’s biggest oil company, Ukrainian banks and multinational firms were among those hit on Tuesday by the cyber extortion campaign, which has underscored growing concerns that businesses have failed to secure their networks from increasingly aggressive hackers.

The rapidly spreading computer worm appeared to be a variant of an existing ransomware family known as Petya which also has borrowed key features from last month’s ransomware attack, named “WannaCry”.

ESET, an anti-virus vendor based in Bratislava, said 80 percent of all infections from the new attack detected among its global customer base were in Ukraine, with Italy second hardest hit at around 10 percent. Several of the international firms hit had operations in Ukraine.

Shipping giant A.P. Moller-Maersk <MAERSKb.CO>, which handles one in seven containers shipped worldwide and has a logistics unit in Ukraine, is not able to process new orders after being hit by the attack on Tuesday, it told Reuters.

“Right now, at this hour, we’re not able to take new orders,” Maersk Line Chief Commercial Officer Vincent Clerc said in a telephone interview on Wednesday.

BNP Paribas Real Estate <BNPP.PA>, which provides property and investment management services, confirmed it had been hit but declined to specify how widely it had affected its business. It employed nearly 3,500 staff in 16 countries as of last year.

“The international cyber attack hit our non-bank subsidiary, Real Estate. The necessary measures have been taken to rapidly contain the attack,” the bank told Reuters on Wednesday, after a person familiar with the matter had said that some staff computers were blocked on Tuesday due to the incident.

Production at the Cadbury <MDLZ.O> factory on the island state of Tasmania ground to a halt late on Tuesday after computer systems went down, said Australian Manufacturing and Workers Union state secretary John Short.

Russia’s Rosneft <ROSN.MM>, one of the world’s biggest crude producers by volume, said on Tuesday its systems had suffered “serious consequences” but said oil production had not been affected because it switched over to backup systems.

The virus crippled computers running Microsoft Corp’s <MSFT.O> Windows by encrypting hard drives and overwriting files, then demanded $300 in bitcoin payments to restore access.

Several security experts questioned whether the effort to extort victims with computers hit by the virus was the main goal, or whether the unknown hackers behind the attack could have other motives.

(Reporting by Eric Auchard; Editing by Adrian Croft)

Symantec says ‘highly likely’ North Korea group behind ransomware attacks

A screenshot shows a WannaCry ransomware demand, provided by cyber security firm Symantec, in Mountain View, California, U.S. May 15, 2017. Courtesy of Symantec/Handout via REUTERS

By Joseph Menn

SAN FRANCISCO (Reuters) – Cyber security firm Symantec Corp <SYMC.O> said on Monday it was “highly likely” a hacking group affiliated with North Korea was behind the WannaCry cyber attack this month that infected more than 300,000 computers worldwide and disrupted hospitals, banks and schools across the globe.

Symantec researchers said they had found multiple instances of code that had been used both in the North Korea-linked group’s previous activity and in early versions of WannaCry.

In addition, the same Internet connection was used to install an early version of WannaCry on two computers and to communicate with a tool that destroyed files at Sony Pictures Entertainment. The U.S. government and private companies have accused North Korea in the 2014 Sony attack.

North Korea has routinely denied any such role. On Monday, it called earlier reports that it might have been behind the WannaCry attack “a dirty and despicable smear campaign.”

Lazarus is the name many security companies have given to the hacking group behind the Sony attack and others. By custom, Symantec does not attribute cyber campaigns directly to governments, but its researchers did not dispute the common belief that Lazarus works for North Korea.

In a blog post, Symantec listed numerous links between Lazarus and software the group had left behind after launching an earlier, less virulent, version of the malware in February. One was a variant of software used to wipe disks during the Sony Pictures attack, while another tool used the same internet addresses as two other pieces of malware linked to Lazarus.

At the same time, flaws in the WannaCry code, its wide spread, and its demands for payment in the electronic bitcoin before files are decrypted suggest that the hackers were not working for North Korean government objectives in this case, said Vikram Thakur, Symantec’s security response technical director.

“Our confidence is very high that this is the work of people associated with the Lazarus Group, because they had to have source code access,” Thakur said in an interview.

But he added: “We don’t think that this is an operation run by a nation-state.”

With WannaCry, Thakur said, Lazarus Group members could have been moonlighting to make extra money, or they could have left government service, or they could have been contractors without direct obligations to serve only the government.

The most effective version of WannaCry spread by using a flaw in Microsoft’s Windows and a program that took advantage of it that had been used by the U.S. National Security Agency, officials said privately.

That program was among a batch leaked or stolen and then dumped online by a group calling itself The Shadow Brokers, who some in U.S. intelligence believe to be affiliated with Russia.

Analysts have been weighing in with various theories on the identity of those behind WannaCry, and some early evidence had pointed to North Korea. The Shadow Brokers endorsed that theory, perhaps to take heat off their own government backers for the disaster.

Cybersecurity company Kaspersky has said it had found several similarities between the WannaCry malware from the earlier attack and those used by Lazarus. But in an interview last week, its Asia research director, Vitaly Kamluk, said it was not conclusive evidence. “It’s unusual,” he said.

Beau Woods, deputy director of the Cyber Statecraft Initiative at the Atlantic Council, said that the Korean language used in some versions of the WannaCry ransom note was not that of a native speaker, making a Lazarus connection unlikely.

But Thakur said that some hackers deliberately obfuscate their language to make tracing them harder. It is also possible that the writer in question was a contractor in another country, he said.

Thakur said a less likely scenario is that Lazarus’ main aim was to create chaos by distributing WannaCry.

If the hackers’ main objective was to earn money on the side, that would suggest an undisciplined hacking operation run by North Korea, one that could be exploited and weakened by the country’s many foes.

“The intelligence community will probably take away from this that there is a possibility of splinters in the Lazarus Group, or members who are interested in filling their own pockets, and that could help,” Thakur said.

Lazarus has also been linked to attacks on banks using their SWIFT messaging network. Last year, hackers stole $81 million from Bangladesh’s central bank. Symantec said malware used in that attack was linked to Lazarus.

(Reporting by Joseph Menn, Dustin Volz, Jeremy Wagstaff and Ju-Min Park; Editing by Chris Reese, Mary Milliken and Raju Gopalakrishnan)

Newly discovered vulnerability raises fears of another WannaCry

FILE PHOTO: A hooded man holds a laptop computer as blue screen with an exclamation mark is projected on him in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

SINGAPORE (Reuters) – A newly found flaw in widely used networking software leaves tens of thousands of computers potentially vulnerable to an attack similar to that caused by WannaCry, which infected more than 300,000 computers worldwide, cybersecurity researchers said on Thursday.

The U.S. Department of Homeland Security on Wednesday announced the vulnerability, which could be exploited to take control of an affected computer, and urged users and administrators to apply a patch.

Rebekah Brown of Rapid7, a cybersecurity company, told Reuters that there were no signs yet of attackers exploiting the vulnerability in the 12 hours since its discovery was announced.

But she said it had taken researchers only 15 minutes to develop malware that made use of the hole. “This one seems to be very, very easy to exploit,” she said.

Rapid7 said it had found more than 100,000 computers running vulnerable versions of the software, Samba, free networking software developed for Linux and Unix computers. There are likely to be many more, it said in response to emailed questions.

Most of the computers found are running older versions of the software and cannot be patched, said Brown.

Some of the computers appear to belong to organizations and companies, she said, but most were home users.

The vulnerability could potentially be used to create a worm like the one which allowed WannaCry to spread so quickly, Brown said, but that would require an extra step for the attacker.

Cybersecurity researchers have said they believe North Korean hackers were behind the WannaCry malware, which encrypted data on victims’ computers and demanded bitcoin in return for a decryption key.

(Reporting and writing By Jeremy Wagstaff; Editing by Michael Perry)

Security experts find clues to ransomware worm’s lingering risks

FILE PHOTO: A man types on a computer keyboard in front of the displayed cyber code in this illustration picture taken March 1, 2017. REUTERS/Kacper Pempel/Illustration/File Photo

(Corrects spelling of first name in paragraph 22 of this May 18 story to Salim from Samil)

By Eric Auchard

FRANKFURT (Reuters) – Two-thirds of those caught up in the past week’s global ransomware attack were running Microsoft’s Windows 7 operating system without the latest security updates, a survey for Reuters by security ratings firm BitSight found.

Researchers are struggling to try to find early traces of WannaCry, which remains an active threat in hardest-hit China and Russia, believing that identifying “patient zero” could help catch its criminal authors.

They are having more luck dissecting flaws that limited its spread.

Security experts warn that while computers at more than 300,000 internet addresses were hit by the ransomware strain, further attacks that fix weaknesses in WannaCry will follow that hit larger numbers of users, with more devastating consequences.

“Some organizations just aren’t aware of the risks; some don’t want to risk interrupting important business processes; sometimes they are short-staffed,” said Ziv Mador, vice president of security research at Trustwave’s Israeli SpiderLabs unit.

“There are plenty of reasons people wait to patch and none of them are good,” said Mador, a former long-time security researcher for Microsoft.

WannaCry’s worm-like capacity to infect other computers on the same network with no human intervention appear tailored to Windows 7, said Paul Pratley, head of investigations & incident response at UK consulting firm MWR InfoSecurity.

Data from BitSight covering 160,000 internet-connected computers hit by WannaCry, shows that Windows 7 accounts for 67 percent of infections, although it represents less than half of the global distribution of Windows PC users.

Computers running older versions, such as Windows XP used in Britain’s NHS health system, while individually vulnerable to attack, appear incapable of spreading infections and played a far smaller role in the global attack than initially reported.

In laboratory testing, researchers at MWR and Kyptos say they have found Windows XP crashes before the virus can spread.

Windows 10, the latest version of Microsoft’s flagship operating system franchise, accounts for another 15 percent, while older versions of Windows including 8.1, 8, XP and Vista, account for the remainder, BitSight estimated.

COMPUTER BASICS

Any organization which heeded strongly worded warnings from Microsoft to urgently install a security patch it labeled “critical” when it was released on March 14 on all computers on their networks are immune, experts agree.

Those hit by WannaCry also failed to heed warnings last year from Microsoft to disable a file sharing feature in Windows known as SMB, which a covert hacker group calling itself Shadow Brokers had claimed was used by NSA intelligence operatives to sneak into Windows PCs.

“Clearly people who run supported versions of Windows and patched quickly were not affected”, Trustwave’s Mador said.

Microsoft has faced criticism since 2014 for withdrawing support for older versions of Windows software such as 16-year-old Windows XP and requiring users to pay hefty annual fees instead. The British government canceled a nationwide NHS support contract with Microsoft after a year, leaving upgrades to local trusts.

Seeking to head off further criticism in the wake of the WannaCry outbreak, the U.S. software giant last weekend released a free patch for Windows XP and other older Windows versions that it previously only offered to paying customers.(http://reut.rs/2qvSPUR)

Microsoft declined to comment for this story.

On Sunday, the U.S. software giant called on intelligence services to strike a better balance between their desire to keep software flaws secret – in order to conduct espionage and cyber warfare – and sharing those flaws with technology companies to better secure the internet (http://reut.rs/2qAOdLm).

Half of all internet addresses corrupted globally by WannaCry are located in China and Russia, with 30 and 20 percent respectively. Infection levels spiked again in both countries this week and remained high through Thursday, according to data supplied to Reuters by threat intelligence firm Kryptos Logic.

By contrast, the United States accounts for 7 percent of WannaCry infections while Britain, France and Germany each represent just 2 percent of worldwide attacks, Kryptos said.(http://tmsnrt.rs/2qIUckv)

DUMB AND SOPHISTICATED

The ransomware mixes copycat software loaded with amateur coding mistakes and recently leaked spy tools widely believed to have been stolen from the U.S. National Security Agency, creating a vastly potent class of crimeware.

“What really makes the magnitude of this attack so much greater than any other is that the intent has changed from information stealing to business disruption”, said Samil Neino, 32, chief executive of Los Angeles-based Kryptos Logic.

Last Friday, the company’s British-based 22-year-old data breach research chief, Marcus Hutchins, created a “kill-switch”, which security experts have widely hailed as the decisive step in halting the ransomware’s rapid spread around the globe.

WannaCry appears to target mainly enterprises rather than consumers: Once it infects one machine, it silently proliferates across internal networks which can connect hundreds or thousands of machines in large firms, unlike individual consumers at home.

An unknown number of computers sit behind the 300,000 infected internet connections identified by Kryptos.

Because of the way WannaCry spreads sneakily inside organization networks, a far larger total of ransomed computers sitting behind company firewalls may be hit, possibly numbering upward of a million machines. The company is crunching data to arrive at a firmer estimate it aims to release later Thursday.

Liran Eshel, chief executive of cloud storage provider CTERA Networks, said: “The attack shows how sophisticated ransomware has become, forcing even unaffected organizations to rethink strategies.”

ESCAPE ROUTE

Researchers from a variety of security firms say they have so far failed to find a way to decrypt files locked up by WannaCry and say chances are low anyone will succeed.

However, a bug in WannaCry code means the attackers cannot use unique bitcoin addresses to track payments, security researchers at Symantec found this week. The result: “Users unlikely to get files restored”, the company’s Security Response team tweeted.

The rapid recovery by many organizations with unpatched computers caught out by the attack may largely be attributed to back-up and retrieval procedures they had in place, enabling technicians to re-image infected machines, experts said.

While encrypting individual computers it infects, WannaCry code does not attack network data-backup systems, as more sophisticated ransomware packages typically do, security experts who have studied WannaCry code agree.

These factors help explain the mystery of why such a tiny number of victims appear to have paid ransoms into the three bitcoin accounts to which WannaCry directs victims.

Less than 300 payments worth around $83,000 had been paid into WannaCry blackmail accounts by Thursday (1800 GMT), six days after the attack began and one day before the ransomware threatens to start locking up victim computers forever. (Reuters graphic: [http://tmsnrt.rs/2rqaLyz)

The Verizon 2017 Data Breach Investigations Report, the most comprehensive annual survey of security breakdowns, found that it takes three months before at least half of organizations install major new software security patches.

WannaCry landed nine weeks after Microsoft’s patch arrived.

“The same things are causing the same problems. That’s what the data shows,” MWR research head Pratley said.

“We haven’t seen many organizations fall over and that’s because they did some of the security basics,” he said.

For a graphic on WannaCry worm, click http://fingfx.thomsonreuters.com/gfx/rngs/CYBER-ATTACK/010041552FY/index.html

(Editing by Philippa Fletcher)

Symantec says ‘highly likely’ North Korea group behind ransomware attacks

A screenshot shows a WannaCry ransomware demand, provided by cyber security firm Symantec, in Mountain View, California, U.S. May 15, 2017. Courtesy of Symantec/Handout via REUTERS

By Joseph Menn

SAN FRANCISCO (Reuters) – Cyber security firm Symantec Corp <SYMC.O> said on Monday it was “highly likely” a hacking group affiliated with North Korea was behind the WannaCry cyber attack this month that infected more than 300,000 computers worldwide and disrupted hospitals, banks and schools across the globe.

Symantec researchers said they had found multiple instances of code that had been used both in the North Korea-linked group’s previous activity and in early versions of WannaCry.

In addition, the same Internet connection was used to install an early version of WannaCry on two computers and to communicate with a tool that destroyed files at Sony Pictures Entertainment. The U.S. government and private companies have accused North Korea in the 2014 Sony attack.

North Korea has routinely denied any such role. On Monday, it called earlier reports that it might have been behind the WannaCry attack “a dirty and despicable smear campaign.”

Lazarus is the name many security companies have given to the hacking group behind the Sony attack and others. By custom, Symantec does not attribute cyber campaigns directly to governments, but its researchers did not dispute the common belief that Lazarus works for North Korea.

In a blog post, Symantec listed numerous links between Lazarus and software the group had left behind after launching an earlier, less virulent, version of the malware in February. One was a variant of software used to wipe disks during the Sony Pictures attack, while another tool used the same internet addresses as two other pieces of malware linked to Lazarus.

At the same time, flaws in the WannaCry code, its wide spread, and its demands for payment in the electronic bitcoin before files are decrypted suggest that the hackers were not working for North Korean government objectives in this case, said Vikram Thakur, Symantec’s security response technical director.

“Our confidence is very high that this is the work of people associated with the Lazarus Group, because they had to have source code access,” Thakur said in an interview.

But he added: “We don’t think that this is an operation run by a nation-state.”

With WannaCry, Thakur said, Lazarus Group members could have been moonlighting to make extra money, or they could have left government service, or they could have been contractors without direct obligations to serve only the government.

The most effective version of WannaCry spread by using a flaw in Microsoft’s Windows and a program that took advantage of it that had been used by the U.S. National Security Agency, officials said privately.

That program was among a batch leaked or stolen and then dumped online by a group calling itself The Shadow Brokers, who some in U.S. intelligence believe to be affiliated with Russia.

Analysts have been weighing in with various theories on the identity of those behind WannaCry, and some early evidence had pointed to North Korea. The Shadow Brokers endorsed that theory, perhaps to take heat off their own government backers for the disaster.

Cybersecurity company Kaspersky has said it had found several similarities between the WannaCry malware from the earlier attack and those used by Lazarus. But in an interview last week, its Asia research director, Vitaly Kamluk, said it was not conclusive evidence. “It’s unusual,” he said.

Beau Woods, deputy director of the Cyber Statecraft Initiative at the Atlantic Council, said that the Korean language used in some versions of the WannaCry ransom note was not that of a native speaker, making a Lazarus connection unlikely.

But Thakur said that some hackers deliberately obfuscate their language to make tracing them harder. It is also possible that the writer in question was a contractor in another country, he said.

Thakur said a less likely scenario is that Lazarus’ main aim was to create chaos by distributing WannaCry.

If the hackers’ main objective was to earn money on the side, that would suggest an undisciplined hacking operation run by North Korea, one that could be exploited and weakened by the country’s many foes.

“The intelligence community will probably take away from this that there is a possibility of splinters in the Lazarus Group, or members who are interested in filling their own pockets, and that could help,” Thakur said.

Lazarus has also been linked to attacks on banks using their SWIFT messaging network. Last year, hackers stole $81 million from Bangladesh’s central bank. Symantec said malware used in that attack was linked to Lazarus.

(Reporting by Joseph Menn, Dustin Volz, Jeremy Wagstaff and Ju-Min Park; Editing by Chris Reese, Mary Milliken and Raju Gopalakrishnan)

North Korea says linking cyber attacks to Pyongyang is ‘ridiculous’

A screenshot shows a WannaCry ransomware demand, provided by cyber security firm Symantec, in Mountain View, California, U.S. May 15, 2017. Courtesy of Symantec/Handout via REUTERS

By Michelle Nichols

UNITED NATIONS (Reuters) – North Korea’s deputy United Nations envoy said on Friday “it is ridiculous” to link Pyongyang with the WannaCry “ransomware” cyber attack that started to sweep around the globe a week ago or the hacking of a U.N. expert monitoring sanctions violations.

WannaCry has infected more than 300,000 computers in 150 nations. It threatens to lock out victims who have not paid a ransom within one week of infection. French researchers said on Friday they had found a last-chance way to save encrypted files.

“Relating to the cyber attack, linking to the DPRK, it is ridiculous,” North Korea’s Deputy U.N. Ambassador Kim In Ryong told a news conference when asked if Pyongyang was involved in the global WannaCry attack or the U.N. hack.

North Korea is also known as the Democratic People’s Republic of Korea (DPRK).

“Whenever something strange happens, it is the stereotype way of the United States and the hostile forces that kick off noisy anti-DPRK campaign deliberately linking with DPRK,” Kim said.

Symantec <SYMC.O> and Kaspersky Lab said on Monday that some code in an earlier version of the WannaCry software had also appeared in programs used by the Lazarus Group, which researchers from many companies have identified as a North Korea-run hacking operation.

A spokesman for the Italian mission to the United Nations, which chairs the U.N. Security Council North Korea sanctions committee, said on Friday that a member of the U.N. panel of experts who monitor sanctions violations had been hacked.

No further details on the extent of the hack or who might be responsible were immediately available.

The U.N. Security Council first imposed sanctions on North Korea in 2006 and has strengthened the measures in response to the country’s five nuclear tests and two long-range rocket launches. Pyongyang is threatening a sixth nuclear test.

(Reporting by Michelle Nichols; Editing by Jonathan Oatis and Grant McCool)

WannaCry attack is good business for cyber security firms

FILE PHOTO: A hooded man holds a laptop computer as cyber code is projected on him in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

By Joseph Menn

SAN FRANCISCO (Reuters) – For Kris Hagerman, chief executive of UK-based cyber security firm Sophos Group Plc <SOPH.L>, the past week could have been bad. The WannaCry “ransomware” attack hobbled some of its hospital customers in Britain’s National Health Service, forcing them to turn away ambulances and cancel surgeries.

The company quickly removed a boast on its website that “The NHS is totally protected with Sophos.” In many industries, that sort of stumble would likely hit a company’s reputation hard.

Yet on Monday, three days after the global malware attack was first detected, Sophos stock jumped more than 7 percent to set a record high and climbed further on Wednesday after the company raised its financial forecasts.

As for most other cyber security firms, highly publicized cyber attacks are good for business, even though experts say such attacks underscore the industry’s failings.

“We are making good progress and are doing a good job,” Hagerman said in an interview this week. “People ask ‘How come you haven’t solved the cyber crime problem?’ and it’s a little like saying ‘You human beings have been around for hundreds of thousands of years, how come you haven’t solved the crime problem?'”

Hagerman pointed out that his company only claimed to protect 60 percent of NHS affiliates and that other factors contributed to the disaster at the hospitals.

“They have their own budgets. They have their own approach to IT generally and IT security,” Hagerman said of individual hospitals, which pick their own operating systems, patching cycles and network setups. Microsoft Corp <MSFT.O> had issued a patch in March for the flaw WannaCry exploited in Windows operating systems.

Yet Hagerman acknowledged that Sophos did not update its basic antivirus software to block WannaCry until hours after it hit customers.

HIGH STAKES

Security experts say hospitals, where the stakes are especially high, represent a case study in how legacy industries need to up their cyber security game.

“We’ve tolerated a pretty poor level of effectiveness, because so far the consequences of failure have been acceptable,” said Josh Corman, a cyber security industry veteran now working on related issues at the Atlantic Council and a member of a healthcare security task force established by the U.S. Congress.

“We are going to see failure measured in loss of life and a hit to GDP, and people will be very surprised.”

Some long-lived medical devices have more than a thousand vulnerabilities, Corman said, and perhaps 85 percent of U.S. medical institutions have no staff qualified for basic cyber security tasks such as patching software, monitoring threat advisories and separating networks from one another.

Increasingly serious cyber security problems are partly an inevitable consequence of the growing complexity of digital technology.

But there are other causes too, including a lack of accountability that stems from the wide range of technology handlers: computer software vendors, antivirus suppliers, in-house professionals, consultants and various regulators.

Ultimately, Corman said, hospitals need to hire solid cyber security people instead of another nurse or two.

GOOD FOR BUSINESS

“What’s needed is punishment of the negligent,” said Ross Anderson, a University of Cambridge pioneer in studying the economics of information security, referring to the hospitals that did not stop WannaCry.

“This is not about technology. This is about people fouling up in ways people would get a pink slip for” in less-insulated environments, he said, meaning they would lose their jobs.

For now, though, there are few signs of any revamp in large institutions’ approach to cyber security – and little incentive for contractors in the cyber security industry to change.

Sophos was not the only company whose stock rose on Monday, as the global scale of WannaCry became apparent. Shares of U.S.-based FireEye Inc <FEYE.O> and Qualys Inc <QLYS.O> both rose more than 5 percent.

But Sophos stood out, aided by higher expectations for a product the company introduced last year to fend off ransomware – so called because the authors of the malware demand a ‘ransom’ to restore a user’s infected computer – which worked at the hospitals that had installed it.

“It’s good news for our business,” one Sophos employee, who asked not to be named, told Reuters this week. “We were so inundated with people calling us.”

(Reporting by Joseph Menn; Editing by Jonathan Weber and Bill Rigby)