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Attacks Aimed at Disrupting the Trickbot Botnet

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Over the past 10 days, someone has been launching a series of coordinated attacks designed to disrupt Trickbot, an enormous collection of more than two million malware-infected Windows PCs that are constantly being harvested for financial data and are often used as the entry point for deploying ransomware within compromised organizations.

A text snippet from one of the bogus Trickbot configuration updates. Source: Intel 471

On Sept. 22, someone pushed out a new configuration file to Windows computers currently infected with Trickbot. The crooks running the Trickbot botnet typically use these config files to pass new instructions to their fleet of infected PCs, such as the Internet address where hacked systems should download new updates to the malware.

But the new configuration file pushed on Sept. 22 told all systems infected with Trickbot that their new malware control server had the address 127.0.0.1, which is a “localhost” address that is not reachable over the public Internet, according to an analysis by cyber intelligence firm Intel 471.

It’s not known how many Trickbot-infected systems received the phony update, but it seems clear this wasn’t just a mistake by Trickbot’s overlords. Intel 471 found that it happened yet again on Oct. 1, suggesting someone with access to the inner workings of the botnet was trying to disrupt its operations.

“Shortly after the bogus configs were pushed out, all Trickbot controllers stopped responding correctly to bot requests,” Intel 471 wrote in a note to its customers. “This possibly means central Trickbot controller infrastructure was disrupted. The close timing of both events suggested an intentional disruption of Trickbot botnet operations.”

Intel 471 CEO Mark Arena said it’s anyone’s guess at this point who is responsible.

“Obviously, someone is trying to attack Trickbot,” Arena said. “It could be someone in the security research community, a government, a disgruntled insider, or a rival cybercrime group. We just don’t know at this point.”

Arena said it’s unclear how successful these bogus configuration file updates will be given that the Trickbot authors built a fail-safe recovery system into their malware. Specifically, Trickbot has a backup control mechanism: A domain name registered on EmerDNS, a decentralized domain name system.

“This domain should still be in control of the Trickbot operators and could potentially be used to recover bots,” Intel 471 wrote.

But whoever is screwing with the Trickbot purveyors appears to have adopted a multi-pronged approach: Around the same time as the second bogus configuration file update was pushed on Oct. 1, someone stuffed the control networks that the Trickbot operators use to keep track of data on infected systems with millions of new records.

Alex Holden is chief technology officer and founder of Hold Security, a Milwaukee-based cyber intelligence firm that helps recover stolen data. Holden said at the end of September Trickbot held passwords and financial data stolen from more than 2.7 million Windows PCs.

By October 1, Holden said, that number had magically grown to more than seven million.

“Someone is flooding the Trickbot system with fake data,” Holden said. “Whoever is doing this is generating records that include machine names indicating these are infected systems in a broad range of organizations, including the Department of Defense, U.S. Bank, JP Morgan Chase, PNC and Citigroup, to name a few.”

Holden said the flood of new, apparently bogus, records appears to be an attempt by someone to dilute the Trickbot database and confuse or stymie the Trickbot operators. But so far, Holden said, the impact has been mainly to annoy and aggravate the criminals in charge of Trickbot.

“Our monitoring found at least one statement from one of the ransomware groups that relies on Trickbot saying this pisses them off, and they’re going to double the ransom they’re asking for from a victim,” Holden said. “We haven’t been able to confirm whether they actually followed through with that, but these attacks are definitely interfering with their business.”

Intel 471’s Arena said this could be part of an ongoing campaign to dismantle or wrest control over the Trickbot botnet. Such an effort would hardly be unprecedented. In 2014, for example, U.S. and international law enforcement agencies teamed up with multiple security firms and private researchers to commandeer the Gameover Zeus Botnet, a particularly aggressive and sophisticated malware strain that had enslaved up to 1 million Windows PCs globally.

Trickbot would be an attractive target for such a takeover effort because it is widely viewed as a platform used to find potential ransomware victims. Intel 471 describes Trickbot as “a malware-as-a-service platform that caters to a relatively small number of top-tier cybercriminals.”

One of the top ransomware gangs in operation today — which deploys ransomware strains known variously as “Ryuk” and “Conti,” is known to be closely associated with Trickbot infections. Both ransomware families have been used in some of the most damaging and costly malware incidents to date.

The latest Ryuk victim is Universal Health Services (UHS), a Fortune 500 hospital and healthcare services provider that operates more than 400 facilities in the U.S. and U.K.

On Sunday, Sept. 27, UHS shut down its computer systems at healthcare facilities across the United States in a bid to stop the spread of the malware. The disruption has reportedly caused the affected hospitals to redirect ambulances and relocate patients in need of surgery to other nearby hospitals.

Ransomware Victims That Pay Up Could Incur Steep Fines from Uncle Sam

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Companies victimized by ransomware and firms that facilitate negotiations with ransomware extortionists could face steep fines from the U.S. federal government if the crooks who profit from the attack are already under economic sanctions, the Treasury Department warned today.

Image: Shutterstock

In its advisory (PDF), the Treasury’s Office of Foreign Assets Control (OFAC) said “companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response, not only encourage future ransomware payment demands but also may risk violating OFAC regulations.”

As financial losses from cybercrime activity and ransomware attacks in particular have skyrocketed in recent years, the Treasury Department has imposed economic sanctions on several cybercriminals and cybercrime groups, effectively freezing all property and interests of these persons (subject to U.S. jurisdiction) and making it a crime to transact with them.

A number of those sanctioned have been closely tied with ransomware and malware attacks, including the North Korean Lazarus Group; two Iranians thought to be tied to the SamSam ransomware attacks; Evgeniy Bogachev, the developer of Cryptolocker; and Evil Corp, a Russian cybercriminal syndicate that has used malware to extract more than $100 million from victim businesses.

Those that run afoul of OFAC sanctions without a special dispensation or “license” from Treasury can face several legal repercussions, including fines of up to $20 million.

The Federal Bureau of Investigation (FBI) and other law enforcement agencies have tried to discourage businesses hit by ransomware from paying their extortionists, noting that doing so only helps bankroll further attacks.

But in practice, a fair number of victims find paying up is the fastest way to resume business as usual. In addition, insurance providers often help facilitate the payments because the amount demanded ends up being less than what the insurer might have to pay to cover the cost of the affected business being sidelined for days or weeks at a time.

While it may seem unlikely that companies victimized by ransomware might somehow be able to know whether their extortionists are currently being sanctioned by the U.S. government, they still can be fined either way, said Ginger Faulk, a partner in the Washington, D.C. office of the law firm Eversheds Sutherland.

Faulk said OFAC may impose civil penalties for sanctions violations based on “strict liability,” meaning that a person subject to U.S. jurisdiction may be held civilly liable even if it did not know or have reason to know it was engaging in a transaction with a person that is prohibited under sanctions laws and regulations administered by OFAC.

“In other words, in order to be held liable as a civil (administrative) matter (as opposed to criminal), no mens rea or even ‘reason to know’ that the person is sanctioned is necessary under OFAC regulations,” Faulk said.

But Fabian Wosar, chief technology officer at computer security firm Emsisoft, said Treasury’s policies here are nothing new, and that they mainly constitute a warning for individual victim firms who may not already be working with law enforcement and/or third-party security firms.

Wosar said companies that help ransomware victims negotiate lower payments and facilitate the financial exchange are already aware of the legal risks from OFAC violations, and will generally refuse clients who get hit by certain ransomware strains.

“In my experience, OFAC and cyber insurance with their contracted negotiators are in constant communication,” he said. “There are often even clearing processes in place to ascertain the risk of certain payments violating OFAC.”

Along those lines, OFAC said the degree of a person/company’s awareness of the conduct at issue is a factor the agency may consider in assessing civil penalties. OFAC said it would consider “a company’s self-initiated, timely, and complete report of a ransomware attack to law enforcement to be a significant mitigating factor in determining an appropriate enforcement outcome if the situation is later determined to have a sanctions nexus.”

Negotiating with Ransomware Gangs

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Negotiating with Ransomware Gangs

Really interesting conversation with someone who negotiates with ransomware gangs:

For now, it seems that paying ransomware, while obviously risky and empowering/encouraging ransomware attackers, can perhaps be comported so as not to break any laws (like anti-terrorist laws, FCPA, conspiracy and others) ­ and even if payment is arguably unlawful, seems unlikely to be prosecuted. Thus, the decision whether to pay or ignore a ransomware demand, seems less of a legal, and more of a practical, determination ­ almost like a cost-benefit analysis.

The arguments for rendering a ransomware payment include:

  • Payment is the least costly option;
  • Payment is in the best interest of stakeholders (e.g. a hospital patient in desperate need of an immediate operation whose records are locked up);
  • Payment can avoid being fined for losing important data;
  • Payment means not losing highly confidential information; and
  • Payment may mean not going public with the data breach.

The arguments against rendering a ransomware payment include:

  • Payment does not guarantee that the right encryption keys with the proper decryption algorithms will be provided;
  • Payment further funds additional criminal pursuits of the attacker, enabling a cycle of ransomware crime;
  • Payment can do damage to a corporate brand;
  • Payment may not stop the ransomware attacker from returning;
  • If victims stopped making ransomware payments, the ransomware revenue stream would stop and ransomware attackers would have to move on to perpetrating another scheme; and
  • Using Bitcoin to pay a ransomware attacker can put organizations at risk. Most victims must buy Bitcoin on entirely unregulated and free-wheeling exchanges that can also be hacked, leaving buyers’ bank account information stored on these exchanges vulnerable.

When confronted with a ransomware attack, the options all seem bleak. Pay the hackers ­ and the victim may not only prompt future attacks, but there is also no guarantee that the hackers will restore a victim’s dataset. Ignore the hackers ­ and the victim may incur significant financial damage or even find themselves out of business. The only guarantees during a ransomware attack are the fear, uncertainty and dread inevitably experienced by the victim.

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Sidebar photo of Bruce Schneier by Joe MacInnis.

Govt. Services Firm Tyler Technologies Hit in Apparent Ransomware Attack

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Tyler Technologies, a Texas-based company that bills itself as the largest provider of software and technology services to the United States public sector, is battling a network intrusion that has disrupted its operations. The company declined to discuss the exact cause of the disruption, but their response so far is straight out of the playbook for responding to ransomware incidents.

Plano, Texas-based Tyler Technologies [NYSE:TYL] has some 5,300 employees and brought in revenues of more than $1 billion in 2019. It sells a broad range of services to state and local governments, including appraisal and tax software, integrated software for courts and justice agencies, enterprise financial software systems, public safety software, records/document management software solutions and transportation software solutions for schools.

Earlier today, the normal content on tylertech.com was replaced with a notice saying the site was offline. In a statement provided to KrebsOnSecurity after the markets closed central time, Tyler Tech said early this morning the company became aware that an unauthorized intruder had gained access to its phone and information technology systems.

“Upon discovery and out of an abundance of caution, we shut down points of access to external systems and immediately began investigating and remediating the problem,” Tyler’s Chief Information Officer Matt Bieri said. “We have since engaged outside IT security and forensics experts to conduct a detailed review and help us securely restore affected equipment. We are implementing enhanced monitoring systems, and we have notified law enforcement.”

“At this time and based on the evidence available to us to-date, all indications are that the impact of this incident is limited to our internal network and phone systems,” their statement continues. “We currently have no reason to believe that any client data, client servers, or hosted systems were affected.”

While it may be comforting to hear that last bit, the reality is that it is still early in the company’s investigation. Also, ransomware has moved well past just holding a victim firm’s IT systems hostage in exchange for an extortion payment: These days, ransomware purveyors will offload as much personal and financial data that they can before unleashing their malware, and then often demand a second ransom payment in exchange for a promise to delete the stolen information or to refrain from publishing it online.

Tyler Technologies declined to say how the intrusion is affecting its customers. But several readers who work in IT roles at local government systems that rely on Tyler Tech said the outage had disrupted the ability of people to pay their water bills or court payments.

“Tyler has access to a lot of these servers in cities and counties for remote support, so it was very thoughtful of them to keep everyone in the dark and possibly exposed if the attackers made off with remote support credentials while waiting for the stock market to close,” said one reader who asked to remain anonymous.

Depending on how long it takes for Tyler to recover from this incident, it could have a broad impact on the ability of many states and localities to process payments for services or provide various government resources online.

Tyler Tech has pivoted on the threat of ransomware as a selling point for many of its services, using its presence on social media to promote ransomware survival guides and incident response checklists. With any luck, the company was following some of its own advice and will weather this storm quickly.

Documented Death from a Ransomware Attack

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Documented Death from a Ransomware Attack

A Dusseldorf woman died when a ransomware attack against a hospital forced her to be taken to a different hospital in another city.

I think this is the first documented case of a cyberattack causing a fatality. UK hospitals had to redirect patients during the 2017 WannaCry ransomware attack, but there were no documented fatalities from that event.

The police are treating this as a homicide.

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Sidebar photo of Bruce Schneier by Joe MacInnis.

Medical Debt Collection Firm R1 RCM Hit in Ransomware Attack

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R1 RCM Inc. [NASDAQ:RCM], one of the nation’s largest medical debt collection companies, has been hit in a ransomware attack.

Formerly known as Accretive Health Inc., Chicago-based R1 RCM brought in revenues of $1.18 billion in 2019. The company has more than 19,000 employees and contracts with at least 750 healthcare organizations nationwide.

R1 RCM acknowledged taking down its systems in response to a ransomware attack, but otherwise declined to comment for this story.

The “RCM” portion of its name refers to “revenue cycle management,” an industry which tracks profits throughout the life cycle of each patient, including patient registration, insurance and benefit verification, medical treatment documentation, and bill preparation and collection from patients.

The company has access to a wealth of personal, financial and medical information on tens of millions of patients, including names, dates of birth, Social Security numbers, billing information and medical diagnostic data.

It’s unclear when the intruders first breached R1’s networks, but the ransomware was unleashed more than a week ago, right around the time the company was set to release its 2nd quarter financial results for 2020.

R1 RCM declined to discuss the strain of ransomware it is battling or how it was compromised. Sources close to the investigation tell KrebsOnSecurity the malware is known as Defray.

Defray was first spotted in 2017, and its purveyors have a history of specifically targeting companies in the healthcare space. According to Trend Micro, Defray usually is spread via booby-trapped Microsoft Office documents sent via email.

“The phishing emails the authors use are well-crafted,” Trend Micro wrote. For example, in an attack targeting a hospital, the phishing email was made to look like it came from a hospital IT manager, with the malicious files disguised as patient reports.

Email security company Proofpoint says the Defray ransomware is somewhat unusual in that it is typically deployed in small, targeted attacks as opposed to large-scale “spray and pray” email malware campaigns.

“It appears that Defray may be for the personal use of specific threat actors, making its continued distribution in small, targeted attacks more likely,” Proofpoint observed.

A recent report (PDF) from Corvus Insurance notes that ransomware attacks on companies in the healthcare industry have slowed in recent months, with some malware groups even dubiously pledging they would refrain from targeting these firms during the COVID-19 pandemic. But Corvus says that trend is likely to reverse in the second half of 2020 as the United States moves cautiously toward reopening.

Corvus found that while services that scan and filter incoming email for malicious threats can catch many ransomware lures, an estimated 75 percent of healthcare companies do not use this technology.

Ransomware Gangs Don’t Need PR Help

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We’ve seen an ugly trend recently of tech news stories and cybersecurity firms trumpeting claims of ransomware attacks on companies large and small, apparently based on little more than the say-so of the ransomware gangs themselves. Such coverage is potentially quite harmful and plays deftly into the hands of organized crime.

Often the rationale behind couching these events as newsworthy is that the attacks involve publicly traded companies or recognizable brands, and that investors and the public have a right to know. But absent any additional information from the victim company or their partners who may be affected by the attack, these kinds of stories and blog posts look a great deal like ambulance chasing and sensationalism.

Currently, more than a dozen ransomware crime gangs have erected their own blogs to publish sensitive data from victims. A few of these blogs routinely issue self-serving press releases, some of which gallingly refer to victims as “clients” and cast themselves in a beneficent light. Usually, the blog posts that appear on ransom sites are little more than a teaser — screenshots of claimed access to computers, or a handful of documents that expose proprietary or financial information.

The goal behind the publication of these teasers is clear, and the ransomware gangs make no bones about it: To publicly pressure the victim company into paying up. Those that refuse to be extorted are told to expect that huge amounts of sensitive company data will be published online or sold on the dark web (or both).

Emboldened by their successes, several ransomware gangs recently have started demanding two ransoms: One payment to secure a digital key that can unlock files, folders and directories encrypted by their malware, and a second to avoid having any stolen information published or shared with others.

KrebsOnSecurity has sought to highlight ransomware incidents at companies whose core business involves providing technical services to others — particularly managed service providers that have done an exceptionally poor job communicating about the attack with their customers.

Overall, I’ve tried to use each story to call attention to key failures that frequently give rise to ransomware infections, and to offer information about how other companies can avoid a similar fate.

But simply parroting what professional extortionists have posted on their blog about victims of cybercrime smacks of providing aid and comfort to an enemy that needs and deserves neither.

Maybe you disagree, dear readers? Feel free to sound off in the comments below.

Florence, Ala. Hit By Ransomware 12 Days After Being Alerted by KrebsOnSecurity

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In late May, KrebsOnSecurity alerted numerous officials in Florence, Ala. that their information technology systems had been infiltrated by hackers who specialize in deploying ransomware. Nevertheless, on Friday, June 5, the intruders sprang their attack, deploying ransomware and demanding nearly $300,000 worth of bitcoin. City officials now say they plan to pay the ransom demand, in hopes of keeping the personal data of their citizens off of the Internet.

Nestled in the northwest corner of Alabama, Florence is home to roughly 40,000 residents. It is part of a quad-city metropolitan area perhaps best known for the Muscle Shoals Sound Studio that recorded the dulcet tones of many big-name music acts in the 1960s and 70s.

Image: Florenceal.org

On May 26, acting on a tip from Milwaukee, Wisc.-based cybersecurity firm Hold Security, KrebsOnSecurity contacted the office of Florence’s mayor to alert them that a Windows 10 system in their IT environment had been commandeered by a ransomware gang.

Comparing the information shared by Hold Security dark web specialist Yuliana Bellini with the employee directory on the Florence website indicated the username for the computer that attackers had used to gain a foothold in the network on May 6 belonged to the city’s manager of information systems.

My call was transferred to no fewer than three different people, none of whom seemed eager to act on the information. Eventually, I was routed to the non-emergency line for the Florence police department. When that call went straight to voicemail, I left a message and called the city’s emergency response team.

That last effort prompted a gracious return call the following day from a system administrator for the city, who thanked me for the heads up and said he and his colleagues had isolated the computer and Windows network account Hold Security flagged as hacked.

“I can’t tell you how grateful we are that you helped us dodge this bullet,” the technician said in a voicemail message for this author. “We got everything taken care of now, and some different protocols are in place. Hopefully we won’t have another near scare like we did, and hopefully we won’t have to talk to each other again.”

But on Friday, Florence Mayor Steve Holt confirmed that a cyberattack had shut down the city’s email system. Holt told local news outlets at the time there wasn’t any indication that ransomware was involved.

However, in an interview with KrebsOnSecurity Tuesday, Holt acknowledged the city was being extorted by DoppelPaymer, a ransomware gang with a reputation for negotiating some of the highest extortion payments across dozens of known ransomware families.

The average ransomware payment by ransomware strain. Source: Chainalysis.

Holt said the same gang appears to have simultaneously compromised networks belonging to four other victims within an hour of Florence, including another municipality that he declined to name. Holt said the extortionists initially demanded 39 bitcoin (~USD $378,000), but that an outside security firm hired by the city had negotiated the price down to 30 bitcoin (~USD $291,000).

Like many other cybercrime gangs operating these days, DoppelPaymer will steal reams of data from victims prior to launching the ransomware, and then threaten to publish or sell the data unless a ransom demand is paid.

Holt told KrebsOnSecurity the city can’t afford to see its citizens’ personal and financial data jeopardized by not paying.

“Do they have our stuff? We don’t know, but that’s the roll of the dice,” Holt said.

Steve Price, the Florence IT manager whose Microsoft Windows credentials were stolen on May 6 by a DHL-themed phishing attack and used to further compromise the city’s network, explained that following my notification on May 26 the city immediately took a number of preventative measures to stave off a potential ransomware incident. Price said that when the ransomware hit, they were in the middle of trying to get city leaders to approve funds for a more thorough investigation and remediation.

“We were trying to get another [cybersecurity] response company involved, and that’s what we were trying to get through the city council on Friday when we got hit,” Price said. “We feel like we can build our network back, but we can’t undo things if peoples’ personal information is released.”

A DoppelPaymer ransom note. Image: Crowdstrike.

Fabian Wosar, chief technology officer at Emsisoft, said organizations need to understand that the only step which guarantees a malware infestation won’t turn into a full-on ransomware attack is completely rebuilding the compromised network — including email systems.

“There is a misguided belief that if you were compromised you can get away with anything but a complete rebuild of the affected networks and infrastructure,” Wosar said, noting that it’s not uncommon for threat actors to maintain control even as a ransomware victim organization is restoring their systems from backups.

“They often even demonstrate that they still ‘own’ the network by publishing screenshots of messages talking about the incident,” Wosar said.

Hold Security founder Alex Holden said Florence’s situation is all too common, and that very often ransomware purveyors are inside a victim’s network for weeks or months before launching their malware.

“We often get glimpses of the bad guys beginning their assaults against computer networks and we do our best to let the victims know about the attack,” Holden said. “Since we can’t see every aspect of the attack we advise victims to conduct a full investigation of the events, based on the evidence collected. But when we deal with sensitive situations like ransomware, timing and precision are critical. If the victim will listen and seek out expert opinions, they have a great chance of successfully stopping the breach before it turns into ransom.”