Eight Tips to Detect Crypto Mining Scams

Whether it’s Power Mining Pool today or Bitconnect yesterday, the crypto space is festering with parasitic scams and opportunistic swindlers. The conditions are ripe for them and there’s money to be made.

Fig. 1. BTCProMiner Free Scam research, 2018.
BTCProminer.png

Among the dangers, Bitcoin mining scams are a tough one to identify and parting the good from the nasty can be tricky. Mining scams are wrapped up in an already technically demanding task of Bitcoin mining. They are billed as a consumer-friendly method for building exposure to Bitcoin mining, and when run like this, they really do provide value for investors looking to diversify.

Legit Bitcoin cloud mining pools are too often buried in search results and outranked by throngs of fly-by-night operations. Finding the legit pools can be a tall order and require sifting through Reddit posts and Bitcointalk forum entries. With that said, there are legit mining operations out there. As always, do your own research and stay skeptical as we settle and develop this wild frontier. For now, let’s take a look at what a crypto mining scam looks like to hopefully better prepare us to identify the key red flags.

What’s a Cloud Mining Pool?

A cloud mining pool is the most hands-off version of crypto mining you can get. They allow a participant to rent or lease hashing power not directly owned by themselves. The rented hashing power is then pooled and paid out proportionally to the members (after fees and operational costs).

A traditional mining pool instead requires participants to supply their own hashing power and pool it with other miners. The participant owns and operates their own hardware and contributes to the pool’s overall hashing power. The critical difference between a cloud mining pool and a traditional mining pool is the ownership of the hardware.

Cloud mining: you don’t own the hardware (hashing power).
Traditional mining: you own hardware (hashing power).

Why pool at all? In short, block rewards become more difficult to obtain as overall hashing power of a particular blockchain increase. Take Bitcoin as an example. There was a time in Bitcoin mining when a standard CPU could mine whole blocks itself. Gone are those days. Bitcoin mining is now big business with plenty of stakeholders leveraging their resources into the security of the blockchain. Miners with serious hashing power make it improbable for small miners to reasonably expect block rewards. Their hashing power is just not enough to compete.

The solution: gather together all these smaller players and pool their hashing power. Miners in a pool no longer compete for blocks of their own, instead, they work together and proportionally share the booty.

What’s a Ponzi Scheme?

It’s theft, let’s just clear that up. If you’re in a Ponzi scheme you are either being robbed or doing the robbing yourself. A typical Ponzi scheme involves enticing participants to invest their money into a fund or investment strategy that has seemingly guaranteed returns. In reality, and with variation, the returns are not gained by real-world trading or superior business acumen. Conversely, new investments to the funds are distributed around existing investors and represented as market returns.

Fig 2. General Ponzi Scheme Principles, 2018.
bitcoin-ponzi-games.jpgPonzi schemes require a constant flow of new investment to keep the machine moving. Once things fall apart or new investment slows, the scheme is often revealed for what it is. In the world of crypto Ponzi schemes, a collapsing Ponzi scheme is followed by a hasty exit scam.

Case in point; “A New York federal court has ordered cryptocurrency hedge fund Gelfman Blueprint, Inc. (GBI) and its CEO Nicholas Gelfman to pay over $2.5 million for operating a fraudulent Ponzi scheme, according to an official announcement published Oct. 18. GBI is a New York-based corporation and denominated Bitcoin (BTC) hedge fund incorporated in 2014. As stated on the company’s website, by 2015 it had 85 customers and 2,367 BTC under management. The order is the continuation of the initial anti-fraud enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) against GBI in September 2017. The CFTC charged GBI for allegedly running a Ponzi scheme from 2014 to 2016, telling investors that it had developed a computer algorithm called “Jigsaw” which allowed for substantial returns through a commodity fund. In reality, the entire scheme was a fraud” (, Cointelegraph.com, 10/19/18).

Keep in mind that Ponzi schemes thrive in times of economic expansion and speculative bubbles. Capturing collective optimism is pivotal to its success. Bitconnect is a choice example of the market fervor getting the best of investors.

Identifying the Red Flags of a Cloud Mining Ponzi Scheme

Firstly, the duck test. If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck. The duck test isn’t scientific by any standard but can be used to leverage your gut feeling to identify early warning signs. Ponzi schemes, whether in Wall Street, Main Street or Bitcoin mining pools, all share very common characteristics. If the opportunity you’re looking at is checking off the same boxes that previous Ponzi schemes had, it’s probably a duck.

Let’s take a look at some criteria or common characteristics of Bitcoin cloud mining Ponzi schemes.

**Much appreciation to Puppet on the BitcoinTalk forum for their work on this template to review Bitcoin cloud mining operations. Until this type of vetting is part of the investor process, crowd-sourced community led investigation is paramount.**

Red flags of a cloud mining Ponzi scheme (adapted from Puppet’s Criteria)

  1. No public mining address / Users unable to select own pools
    When you rent hashing power from a cloud miner, you are only renting hashing power. This means that the pool you contribute to should be your own choice. The cloud mining operator you rent from may also have a pool for convenience but should not require you to use it. There is no reason for a mining pool to hide their public mining address, it just doesn’t make sense.
  2. No endorsement from hardware/ASIC provider
    With the overwhelming amount of cloud mining operations being Ponzi schemes, the industry virtually requires a shout-out from their hardware provider to ensure customers that there really are miners buzzing away on their behalf. If your cloud mining company can’t prove they own their hardware (without raising more questions) then you should reconsider.
  3. No pictures or recordings of their hardware or datacenter
    It is common practice for miners to be closed lipped about where their data centers are located. So, don’t expect to get robust images or recordings that dox the facility or owners. However, some evidence should exist and beyond their location, the pictures or video shouldn’t look to be hiding anything.
  4. No limits on how much hashing power you can lease
    Cloud mining providers will have a limited inventory of hashing power on hand at any time. Furthermore, expanding an operation’s inventory takes time and can be limited by the market supply of ASIC’s and other factors. It’s questionable for a cloud miner to not share their inventory supply with their customers. Most concerning, offenders will promise you instant and limitless scalability.
  5. Referral payouts schemes
    Often, mining Ponzi schemes will also feature a form of multi-level marketing to encourage members to bring on new investments. Members are incentivized to grow their own teams, and each new member they bring in increases their rewards.
  6. Anon operators
    If the owners are anonymous, move on. There is little-to-no reason to be an anonymous operator of a cloud mining service. If they provide identification, double check it, ask around, and do some due diligence. Is the owner hidden behind private registration? Has the domain been registered for less than six months? (You can find this information by searching for the platform’s URL registration details on a site like WHOis.net). The more information you can find about the people/company behind a website, the better.
  7. No clear path for divesting
    There should be well-defined methods for withdrawing funds or closing rental contracts.
  8. Guaranteed profits
    Quack, quack, quack!

If any of these red flags are present in the cloud mining business than take a moment and consider why.

Power Mining Pool: A Case Study for Cloud Mining Ponzi Schemes

Power Mining Pool was a typical Bitcoin mining pool Ponzi scheme and even included a multi-level marketing (MLM) styled referral system. Looking back it is a lot easier now to see the red flags that were present then. Hindsight is twenty-twenty. When a company expects you to send them money, but refuses to disclose any information about itself, you’re almost certainly being scammed. A WHOIS checkup shows that PowerMiningPool.com domain was registered on June 27, and the mining pool website launched online on September 4, 2017.

BitCoin Mining Scam

Red Flag #1 Power Mining Pool didn’t have a public mining address and didn’t allow for mining outside their own pool.

Red Flag #2 No endorsement or sign of approval from hardware suppliers. Nothing to be found on Reddit, Telegram, BitcoinTalk, and so on.

Red Flag #3 A serious lack of informative images. An archive of the Power Mining Pool shows a website riddled with stock images and vague copywriting. In addition to the generic images, there is a video that provides no additional insight into the company.

Red Flag #4 No limits to how much you can invest. Power Mining Pool sold hashing power in the form of shares, which any investor could purchase without limit. Shares would not only be your claim to the guaranteed returns but also provide you with more ability to climb the ranks of the MLM reward system.

Red Flag #5 From Associate to President Millionaire, members could climb the ranks by both acquiring new shares in the pool and successfully referring new members. At each new rank in membership, you received bonuses and higher returns. For you to move up in ranks, however, your referrals also needed to move up. Not only do you need to bring in new successful members, but your referrals do too. Sound familiar?

Red Flag #6 The founders of Power Mining Pool are brothers and live in central Europe. And that’s all the information available. Searching their names, Andrew and Mike Conti, is about as helpful as the caricatures of themselves on their about page. Additionally, a WHOIS search of the company’s domain shows the admin contacts hidden behind a domain name privacy service.

Red Flag #7 After the cease and desist, Power Mining Pool has up and left with members’ principal investments. Initially, there were accounts of members receiving their daily mining profits as promised. However, it’s common for early adopters of Ponzi schemes to see earnings while their principal investments are siphoned off.

Red Flag #8 “Every share you purchase will earn you €70.” That’s a promise plucked directly from the former subpage subtly titled opportunities. Each share costs members €50 which means Power Mining Pool is guaranteeing 40 percent returns.

Power Mining Pool is only one example of a Bitcoin cloud mining service riddled with red flags and warning signs. In fact, there are breadcrumbs of evidence linking Power Mining Pool to other operational Bitcoin cloud mining scams. Battling these schemes is a game of whack-a-mole: closing down one just creates three more.

Conclusion

The code is what makes the cryptocurrency work, and most legitimate cryptocurrency teams will make their codes ‘open source’. This means it is published openly, so anyone can read it, edit it, and check it is what the founders say it is. Of course, just because you can’t read the code yourself doesn’t mean not being able to see it is OK. If a cryptocurrency team is keeping their code secret, it should set off alarm bells.  Unless they have validated I.P., what are they trying to hide, but even then they would have long legal paperwork and patient documents they could show…..

Just because red flags are present doesn’t always mean you have identified a scam. They are early warning signs and alarms telling us to look a little deeper, investigate further, and remain skeptical. Questions and suspicions are not inherently dangerous themselves but ignoring them is. Power Mining Pool was peppered with reasons to raise concern and seek clarity. The answers provided to these questions should support unique technological offerings, business savvy, and this should all be logically connected. If operators don’t directly answer most of these questions see if they have other commonalities with know crypto scams as it may be another example in a long line of Bitcoin cloud mining Ponzi schemes. BitClub Network, HashOcean, Coinmulitplier Club, MinersLab, and Bitcoin Cloud Services are just a handful of other examples. Unscrupulous operators are swindling and cheating people out of their money. If you see reasons to be concerned, then share it with the community, ask the operators for clarity, and be cautious. Don’t keep it a secret.

Editor Jeremy Swenson
Writer Marshall Taylor

Top 12 Ways Small To Med Businesses Can Reduce Cyber Risk

1) Use the Free DHS Developed CSET (Cybersecurity Evaluation Tool) To Assess Your Security Posture: High, Med, or Low.

Figure 1. (DHS, 2018).
CSET Process.PNG

2) Educate Employees About Cyber Threats and Hold Them Accountable. 

Educate your employees about online threats and how to protect your business’s data, including safe use of social networking sites. Depending on the nature of your business, employees might be introducing competitors to sensitive details about your firm’s internal business. Employees should be informed about how to post online in a way that does not reveal any trade secrets to the public or competing businesses. Use games with training and hold everyone accountable to security policies and procedures.

3) Protect Against Viruses, Spyware, and Other Malicious Code.

Make sure each of your business’s computers are equipped with antivirus software and anti-spyware and updated regularly. Such software is readily available online from a variety of vendors. All software vendors regularly provide patches and updates to their products to correct security problems and improve functionality. Configure all software to install updates automatically. Especially watch freeware which contains malvertising.

4) Secure Your Networks.

Safeguard your Internet connection by using a firewall and encrypting information. If you have a Wi-Fi network, make sure it is secure and hidden. To hide your Wi-Fi network, set up your wireless access point or router so it does not broadcast the network name, known as the Service Set Identifier (SSID). Have a secure strong password such as (xeyg1845%RELIGO) to protect access to the router.

5) Base Your Security Strategy Significantly on the NIST Cybersecurity Framework 1.1: Identity, Detect Defend, Respond, and Recover.

Fig. 2. (NIST, 2018).
NIST

6) Establish Security Practices and Policies to Protect Sensitive Information.

Establish policies on how employees should handle and protect personally identifiable information and other sensitive data. Clearly outline the consequences of violating your business’s cybersecurity policies and who is accountable.

7) Require Employees to Use Strong Passwords and to Change Them Often.

Consider implementing multi-factor authentication that requires additional information beyond a password to gain entry. Check with your vendors that handle sensitive data, especially financial institutions, to see if they offer multi-factor authentication for your account. Smart card plus pass-code for example.

8) Employ Best Practices on Payment Cards. 

Work with your banks or card processors to ensure the most trusted and validated tools and anti-fraud services are being used. You may also have additional security obligations related to agreements with your bank or processor. Isolate payment systems from other, less secure programs and do not use the same computer to process payments and surf the Internet.

9) Make Backup Copies of Important Business Data and Use Encryption When Possible.

Regularly backup the data on all computers. Critical data includes word processing documents, electronic spreadsheets, databases, financial files, human resources files, and accounts receivable/payable files. Backup data automatically if possible, or at least weekly, and store the copies either offsite or on the cloud.

10) Control Physical Access to Computers and Network Components.

Prevent access or use of business computers by unauthorized individuals. Laptops can be particularly easy targets for theft or can be lost, so lock them up when unattended. Make sure a separate user account is created for each employee and require strong passwords. Administrative privileges should only be given to trusted IT staff and key personnel.

11) Create A Mobile Device Protection Plan.

Require users to password protect their devices, encrypt their data, and install security apps to prevent criminals from stealing information while the phone is on public networks. Use a containerization application to separate personal data from company data. Be sure to set reporting procedures for lost or stolen equipment.

12) Protect All Pages on Your Public-Facing Web-pages, Not Just the Checkout and Sign-Up Pages.

Make sure submission forms can block spam and can block code execution (cross side scripting attacks).

Contact Abstract Forward here for more info.

U.S. Healthcare Orgs and the GDPR: A New Wave of Privacy Is Blowing In From Europe

4131.jpgIn the United States (US), healthcare organizations and providers have much experience with the Health Insurance Portability Accountability Act (HIPAA), and other pertinent federal laws and regulations. Now, with the new European privacy regulations, the General Data Protection Regulation (GDPR), Europe’s new framework for data protection laws, should cause many U.S. healthcare organizations to think well beyond information security and patient privacy.

Keith-Daniels.jpgNow, important considerations will also include data flows, handling data, cross-border data transfer, data privacy, security monitoring and overall policy compliance for international patients. For those healthcare organizations that offer services in the European Union (EU) or service European Union citizens, then the GDPR, which took effect on May 25, 2018, is a new burden.

The GDPR is designed to standardize data privacy and protection laws across Europe, but it will impact processes, technology, relationships and communication internationally. The new obligations pertain to any organization that handles EU data, whether that organization is in the EU or not. U.S. healthcare organizations will need to safeguard EU patients’ data based on the GDPR in addition to HIPAA and other U.S. regulations. The GDPR fundamentally changes how personal and sensitive data can be used, processed, managed, stored, deleted and disclosed and applies whether an organization is a data controller or data processor.

Healthcare organizations with operations in the EU or who collect personal data in Europe on EU citizens (even such things as collecting business cards at a conference in the EU) will clearly be within the GDPR regime.

The GDPR rules now in force could see a great increase in the penalties slapped on firms for past data breaches, with fines levied at a maximum of 4% of global revenues – which seems excessive, but is intended to be scary.  One major change from most US laws on data breach reporting is that the regulations requires organizations notify authorities of a data breach within 72 hours and, if the breached data is of a serious personal nature, that those individuals whose data has been breached also be notified within 72 hours.

Now, those healthcare organizations subject to GDPR will need to prove that they have adequate processes in place to manage and protect EU residents’ “personal data.” The regulator who manages GDPR in each country may request written documentation in support of GDPR compliance.  Key requirements of the GDPR include:

1)     Appoint a Data Protection Officer (DPO) responsible for data processing.

2)     Document privacy and security policies and procedures.

3)     Implement GDPR special codes of conduct.

4)     Measure effectiveness of privacy and security compliance controls.

5)     Implement risk-based approach for data processing.

6)     Define risks presented by data processing activities.

7)     Implement Data Protection Impact Assessment (Article 35).

8)     Define implement controls and processes related to potential security threats, vulnerabilities and breaches.

9)     Utilize pseudonymization and encryption as controls – a data management and de-identification procedure by which personally identifiable information fields within a data record are replaced by one or more artificial identifiers.

10)  Regulate controls to ensure the ongoing confidentiality, integrity, availability (CIA), and resilience of systems and services

11)  Enable restoration of availability and access to data and services, in a timely manner, in the event of a security incident.

12)  Implement process for regularly testing, assessing, and evaluating the effectiveness of technical and organizational measures.

13)  Right to erasure (‘right to be forgotten’).

In conclusion, an organization’s CEO and Board of Directors are responsible for GDPR compliance as well as complying with American laws. They must ensure that practices are balanced with all cybersecurity and data privacy regulations that apply to their organization. If not done properly, organizations will leave themselves vulnerable to huge fines and criminal consequences under the GDPR, damage to their public reputations, the possibility of additional penalties in the U.S. and securities lawsuits. Multinationals and their US business partners can expect to have to answer underwriters’ queries as to their compliance with GDPR when they are buying or renewing their cyber liability and management liability policies for the next several years.

As the number and breadth of massive data breaches increase, pressure will build on politicians to enact new statutes and regulations with a focus on making corporate management and boards responsible parties for protecting personal information. GDPR is going to be an important “test case” that other countries and jurisdictions will watch closely. New regulations and statutes such as GDPR are mandating that boards and individual directors become focused and engaged on cybersecurity issues. Now, individual directors may be personally responsible for cybersecurity-related issues. There is currently a lack of cyber knowledge on boards of directors in general.

It is unlikely that the threat of holding individual directors responsible for cybersecurity will abate. Data breaches which are reported almost daily have raised the general level of distrust of “big business”, such as the recent criticism of the officers of Experian and Uber and many others before them, and a corresponding increase in the desire to hold top executives personally responsible. In response to these trends, directors must increase their cybersecurity skills, engagement and awareness to comply with the GDPR and the likely next wave of cyber laws and regulations.

Cyber and D&O underwriters will also be closely monitoring these developments and we can expect changes in policy forms to occur as the risks evolve and any negative loss trends become apparent.

For U.S. healthcare organizations subject to GDPR, a demonstrable effort to comply is mandatory, and time is critical.  It seems that the regulators are not requiring immediate and total compliance. Rather, they are looking for entities to be able to show that they are making steps towards compliance and are moving forward with what yet needs to be done. Almost all healthcare organizations, whether now subject to the GDPR or not, will soon also face new laws, such as have just been passed in California (and due to be in effect in 2020), which will bring GDPR-type regulations to the USA itself.

Writer Keith Daniels, JD, CIPP/US[1]
Editor Jeremy Swenson, MBA, MSST

[1] Keith Daniels, JD, CIPP/US is a graduate of the University of Wisconsin – Eau Claire and the University of Wisconsin Law School. He has practiced law in Wisconsin and Illinois and has been involved in cyber liability insurance since its inception around the year 2000. Keith is a Sr independent cyber privacy, compliance, data protection, and risk liability consultant who partners with Abstract Forward Consulting. He is located in Minneapolis, MN and can be reached on LinkedIn here.

Abstract Forward Podcast #4: Network Scanning Tips With Chip Harris.

Chip Harris.jpgIn this episode, we have a deep conversation with CISO Consultant Chip Harris. We start with an overview of network scanning, both free open source tools like OpenVAS and other more costly options like Tenable. We then talk about red teaming, issues with data security lakes, the Equifax data breach, how leadership impacts security, and how threat actors are better at innovating than defenders typically are. We also cover the evolution of messaging, mobile device application hype and exploits, mobile application containerization, how the cyber kill chain came about, and a few things about the future of incident response.

Harris has an extensive background in government and business InfoSec engineering and red team planning and operations  — with over 25 years of experience designing and managing IT systems. His expertise is in identifying and solving problems by delivering projects and solutions. His experience includes serving as the IT lead and project manager within the business unit, evaluating system performance, helping business leaders and non-technical clients understand how technology can improve workflow, developing and enforcing standard IT practices, and ensuring IT compliance with regulations such as NERC CIP, PCI, GDPR, HIPAA, and SOX.

He has a Ph.D. in Cyber Security and Cyber Operations from the United States War College, a Masters in Cyber Security and Cyber Crime from the United States War College, and a Bachelors in Computer Science and Animation from Memphis College of Art. He has the following certifications: MCE, MCSE, NCE, MCSA, MCM, MCT, Security +, SUSE Novell Linux, Open SUSE Enterprise, Ubuntu Server Admin, PICK WMS, Backtrack 5, Netools 5, Dell Kace 3000 and 1000, IBM Q-Radar, Carbon Black, Tenable Security Suite, Dark Trace, Q-Radar, IBM Guardium, OWASP, Check Point, RHL, Kali Linux Certified, C|EH, C|PT, C|HFI, CCE, GIAC Rated, Barracuda, and he is even Tripwire Certified.

Fig 1. (OpenVAS Greenbone Scan Demo, 2018).
OpenVAS.png

Listen to the podcast here.


Learn more about Abstract Forward Consulting here.

Disclaimer:  This podcast does not represent the views of former or current employers and / or clients. This podcast will make every reasonable effort to verify facts and inferences therefrom. However, this podcast is intended to entertain and significantly inform its audience based on subjective reason based opinions. Non-public information will not be disclosed. Information obtained in this podcast may be materially out of date at or after the time of the podcast. This podcast is not legal, accounting, audit, health, technical, or financial advice. © Abstract Forward Consulting, LLC.

What is Crypto-Currency Malware And How Do You Prevent It?

As crypto-currency enters the mainstream cyber-criminals are using crypto-mining malware (Fig. 1) to infect websites and devices ranging from smartphones to servers. All of this is dependent on a strong understanding of bitcoin mining in the blockchain as described below.

Fig. 1. Bitcoin Crypto-Jacking Threat Actor.
bigstock-221140084-940x500

Every ten to fifteen minutes mining computers collect hundreds of waiting bitcoin transactions (a block) and then convert them into mathematical puzzles. The first miner to find the puzzle solution shares it with others on the network. Then other miners check whether the sender of the funds has the right to spend the money and if the solution to the puzzle is correct. If enough of them grant their approval, the block is crypto-graphically added to the ledger and the miners move on to the next set of transactions (hence the term “blockchain”). The miner who found the solution gets 12.5 bitcoins as a reward (presently), but only after another 99 blocks have been added to the ledger. This is the incentive to participate in the system and validate these transactions (L.S., The Economist, 2015).

Clever as it may be, this system has weaknesses. One is rapid consolidation. Most mining power today is provided by pools—big groups of miners who combine their computing power to increase the chance of winning the coin reward. As mining pools have gotten bigger, it no longer seems inconceivable that one of them might amass enough capacity to mount a 51% attack—whereby an organization is somehow able to control most of the network mining power (hashrate). Bitcoin is secured by having all miners (computers processing the networks transactions). Indeed, in June 2014 one pool, GHash.IO, had the bitcoin community running scared by briefly touching that level before some users voluntarily switched to other pools.

As the bitcoin price continues to fall, consolidation could become more of a problem. Some miners are giving up because the rewards of mining no longer cover the costs. Some worry that mining will become concentrated in a few countries where electricity is cheap, like China, thus allowing a hostile government to seize control of bitcoin. Others predict that mining will end up as a monopoly—the exact opposite of the decentralized system that the elusive Bitcoin founder Mr. Nakamoto set out to create.

Fig. 2.  General Crypto-Jacking Attack Flow. (Sugata Ghosh, ET Bureau, 05/11/2018).

Cryptojacking
With a strong understanding of blockchain technology, crypto-mining malware attacks and infects websites and devices ranging from smartphones to servers in one of these three common but not exhaustive ways.

1) Sneaking dedicated crypto-mining software into your network via unpatched and out of date server vulnerabilities. Servers are especially at risk here: the crooks love them because they’re usually more powerful than desktops and laptops, and they’re usually running 24/7. Old mid-sized data centers are at high risk because they often have minimal defenses.

2) Sneaking JavaScript crypto-mining software into hacked web pages via cross side scripting (forms and comment fields) and WordPress plug-in vulnerabilities—hard to keep track of because there are so many. Then your browser mines for currency as you surf the web. The crooks get much less out of each victim – as soon as you leave the poisoned website, the mining stops – but a single hacked site could end up crypto-jacking millions of visitors each day, whatever operating system they’re using.

3) Mobile application exploits—twenty-four Android apps recently (Sept 2018) made it into the Google Play store with code that turns users’ phones into crypto-currency mining workers. Some of them targeted users in the U.S. by using the guise of educational tools—they have been download around 120,000 times (Bleeping Computer, Ionut Ilascu, 09/28/18).

Crypto-jacking malware on enterprises running thousands of computers can disturb the daily operations of the business and even damage the hardware. In February 2018, Crypto-currency mining malware CoinHive was found on more than 5,000 government websites (Fig 3.) in the U.K., U.S., and Australia (Patrick Greenfield, The Guardian, 02/11/18).

Fig. 3. CoinHive JavaScript Crypto-jacking Malware (GitHub).
CoinHive Cryptojacking
At present, CoinHive is easy to deploy and generated hundreds of thousands of dollars in its first month, so its arguably easy money for the attacker. In support of this conclusion RWTH Aachen University in Germany added: “embedded crypto-currency miner CoinHive is generating $250 thousand worth of Monero every month – most of it going to just 10 individuals. Moreover, they found that Monero accounts for 75 percent (Fig 3.) of all browser-based crypto-currency mining (David Canellis, TNW, 08/14/2018).

Once infected, the crypto-mining malware uses hosts CPU / GPU power to mine coins thus allowing cyber-criminals to grow their personal wallets. According to McAfee Labs crypto-mining malware attacks increased by 1,189% in Q1 2018. Attackers are getting smarter, instead of a one-time payment from ransomware, they prefer the long game and a steady revenue stream from infected devices (McAfee Labs Threats Report, June 2018). Crypto-mining is in its infancy and thus there’s a lot of room for growth and evolution over the next few years.

Oftentimes crypto-jacking goes undetected as attackers find new ways to infect the devices.

Yet here are the top three indicators that a machine is infected with crypto-malware:

1.    The device is acting unusually slow.

2.    Smartphone or personal computer constantly overheats.

3.    The battery on laptop or phone dies unreasonably fast.

In today’s threat landscape here are the top five things you can do to prevent crypto-jacking:

1.    Run the most up-to-date anti-malware and antivirus programs. Ideally a strong one like Avast.

2.    If your device significantly slows down when you’re on a certain site close it and check it again. It may be an infected website especially if you get a bunch on pop-ups.

3.    Install web browser anti-crypto-mining extensions.

4.    Use AI driven network monitoring software (SecBl, Darktrace, etc). Mostly for servers not so much individual PCs.

5.    Disable JavaScript to prevent in-browser crypto-jacking. On side effect is that you will not be able to view all sites in an optimal way.

By Jeremy Swenson & Andrew Erkomaishvili

Top Ten Ways Companies Can Reduce Cyber Risk

cost-of-cyber-attacks-to-business-mq593szq6dt3vzuawhu5qtm2upt66jfkqpxzl18l8sMid-sized businesses are defined from about $50 million to $800 million in revenue. A 2017 report published by Keeper Security and the Ponemon Institute found more than 50% of small and medium business had been breached in the past 12 months, but only 14% of them rated their ability to defend against cyber-threats as “highly effective” (Keeper / Ponemon, 2017). According to the 2017 Verizon Data Breach Investigations Report, 75% of the breaches were caused by outsiders with 51% involving organized criminal groups and the remaining involved internal actors. Not surprising, malware installed via malicious email attachments was present in 50% of the breaches involving hacking(Verizon, 2017). Here are ten steps (applicable to any size business) you can take to shield your mid-sized business from cyber-attacks:

10) Train Staff Often:

Most cyber-attacks take the form of phishing and spear phishing which is hackers targeting individuals rather than computer systems – typically with the help of good social engineering (IT Governance Blog, 2017). Therefore, employees need to be educated to roll back what they share on social media and to opt out of data harvesting when they can. Training needs to be ongoing because the threat landscape and technology change so fast. For example, ransomware was not a serious attack vector 6 years ago, but it is front and center today. Additionally, crypto-currency mining networks is an exploit vector that is arguably less than 2 years old and growing rapidly. Lastly, training more often improves the company security culture and that is directly related to keeping a good business reputation and core customer base. Here are a few more training necessities:

1. Follow cyber security best practices and conduct audits on a regular basis – based on your selected one or two frameworks (Cobit 5, ISO 2700, etc)

2. Use games contest and prizes to teach cyber safety – leadership must do this as well.

3. Notify and educate staff of any current cyber-attacks – have a newsletter.

4. Teach them how to handle and protect sensitive data – do lunch and learns.

9) Secure Wireless Networks:

Wireless networks can be easily exploited by cyber attackers, unknowing guests, and even angry customers. Your network is not like a coffee shop community room but rather it’s like a bank vault with many segmented areas – map the segments and know their rank order value. To harden your wireless network, avoid WEP (Wired Equivalent Privacy) encryption (which can be cracked in minutes) and use only WPA2, which uses AES-based encryption and provides better security than WPA.

Fig 1. (WPA2 Selection Screen Clip).

wpa_top

If you have a Wi-Fi network, be sure access to the router is secured by a password and hidden so that it does not broadcast the network name. To hide your Wi-Fi network, set up your wireless access point or router so it does not broadcast the network name, known as the Service Set Identifier (SSID). Also, remember to password-protect access to the router. Additionally, for protection against brute-force attacks, protect your network with a complex passphrase containing at least 25 characters and including a mix of letters, upper and lower case and numerals and symbols. Use a firewall and encryption to safeguard your internet connection.

8) Physically Secure Your Environment:

Focusing on web tools and monitoring is needed, but it’s also important to remember there are physical concerns about securing your network as well. To a threat actor overcoming all of your security measures may be as easy as walking up to your router and pressing the reset button. Make sure that your key pieces of in-office infrastructure are secure, and that you’re monitoring them with video, sensors or other physical security controls. Make sure to be creative and thorough about how you define a physical security connection point including: doors, public lobbies, windows, air vents, turnstiles, roofs, printer room, network closet, and USB ports on machines, etc. Lastly, employees should keep their devices near them at all times.

7) Double Down on Firewalls:

While most routers have a firewall built in that can protect your internal network against outside attacks, you should know that it may not be automatically activated. It’s generally called something like SPI (stateful packet inspection) or NAT (network address translation). Either way, turn it on (Chelsea Segal, Cox Blue, 09/16/18).

It’s also important to ensure that your own software isn’t sending information out over the network or the internet without your permission. For that, you’ll want to install firewall software on your PC as well. PC Magazine’s top pick is Check Point ZoneAlarm Pro, but the default firewall that comes with Windows 8 and 10 is also a good start.

6) Evaluate Your Operational Resilience and Cyber-Security Practices Quarterly: 

A good start is the US-CERT’s Cyber Resilience Review (CRR), which helps organizations assess enterprise programs and practices across 10 domains including risk management, incident management, service continuity, and more (SBA, 2018). They can also use the CSET (Cyber Security Evaluation Tool), which is a free customizable multi-framework DHS created general cyber security assessment.

5) Review Control Access / IAM and Audit Access Regularly:

Administrative access to your systems should only be granted on a need-to-know basis – least privilege principle. The correct job roles should be in the correct windows access groups. Keep sensitive data – such as payroll – out of the hands of anyone who doesn’t need it to do their job, marketing for example. Remove unused, stale, or unnecessary IAM users/credentials. Also, consider decommissioning old systems for risk reduction and cost savings – with the appropriate project analysis done. Use a secure strong password especially for single sign on interfaces – two factor authentication. Organizations should audit their IAM user activity to see which users haven’t logged into AWS for at least 90 days and revoke their permissions. Monitor user activity in all cloud services (including IAM user activity) to identify abnormal activity indicative of threats arising from a compromised account, or malicious/negligent internal employee – when corroborated with event logs and related intelligence.

4) Back up and Secure Your Systems and Data but Don’t Over Retain:

Ransomware, or viruses used by hackers to encrypt an organization’s computer files and detain them until a ransom is paid, has emerged as a serious and growing threat to businesses worldwide, according to the FBI (FBI CISO Report 2018). Whether data is stored in the cloud, on-premises, or in a hybrid data center, businesses should back up all files to hard drives stored in a safe place outside the reach of cyberthieves. These are some key data backup subpoints.

1. Limit access to sensitive data to only a few authorized employees.

2. Encrypt all your sensitive data – do not over-classify.

3. Backup your data periodically and store it in an offsite location.

4. Protect all devices with access to your data – third party vendor implications.

5. If you accept credit cards transactions, secure each point of sale.

3) Create a Guidebook for Mobile Security:

While mobile devices allow for work anywhere, anytime, they create significant security challenges. The FCC suggests requiring users to password-protect their devices, encrypt data, and install security apps to prevent criminals from stealing information while the phone is on public networks (FCC, Feb 2018). Plus, set reporting procedures for lost or stolen mobile devices. Draft a BYOD policy that separates personal vs. corporate data and covers the below points.

1. Ensure your equipment has the latest security software and run anti-virus/malware scans regularly. If you don’t have good anti-virus software installed, buy and install it.

2. Install all software updates as soon as they are available, including all web browsers.

3. Have the latest operating systems on your devices with access to regular updates.

4. Make sure your internet connect is protected with firewall security.

5. Make sure your Wi-Fi network is encrypted, hidden, and password protected.

2) Use Encrypted Websites for E-commerce Via Strong Third-Party Risk Management Policies:

Only buy from encrypted websites by looking for https on every page. Don’t’ be teased in by super low prices or the like, it may be a drive by download set-up. Ensure that the owner of the website is reputable and is who they say they are. This kind of gets at third party and supply chain risk management, which should be based on some applicable security framework for your industry, etc.

1) Avoid When Possible and Rigorously Evaluate Freeware:

There are a lot of free options for software including anti-virus (AVG), graphic design (GIMP), marketing and sales applications, some of which are quite reliable. However, many are not reliable and pose risk because they often come with malvertising, utility ad ons that slow things down, or direct malware. All of this complicates cyber risk and blurs sight lines into the infrastructure stack. Cyber security isn’t a good place to cut costs so pay for a good antivirus and firewall tool-set. If you are going to use a robust free graphic design tool like GIMP make sure it is documented, always updated, and that it is run in a limited area.

Bonus) Have a Sound Way To Prioritize Patching.

Establish a process to risk-rate vulnerabilities based on: ease of exploit and potential impact of the vulnerability (reference the CVE scores), if other working defenses are in place, and lastly by grouping the assets they may impact.

Reach out to me here for questions.

British Airways Data Breach Likely The First GDPR Rollback Test.

On 08/21/18 British Airways (BA) suffered the start of a data breach which ended on or about 09/05/18. A UPS (uninterruptible power supply) failure and subsequent power surge was partly how the breach was exacerbated. It was also indicated that a third party (vendor) was involved in some way which complicates liability and brings supply chain security more into scope.

The breach allowed cyber criminals to steal personal and financial information from about 380,000 customers who booked directly with the airline in the preceding two weeks (Ivana Kottasová, CNN, 09/07/18). When a passenger makes a booking through the BA website, they must submit their name, e-mail address, address, and credit or debit card details including: the number, expiration date, date, and the security code or “Card Verification Value” (CVV) — all of this was compromised.

BA Breach
Photo: Steve Parsons/PA.

Yet most interestingly, this is one of the first major data breaches since GDPR came into effect in May this year, Walters said (Samuel Gibbs, the Guardian, 09/07/18). “It appears that the company notified the Information Commissioner’s Office and customers within the GDPR’s mandatory 72 hours but the breach will now be investigated and the company could be penalized if it did not take all the necessary measures to protect customer data” (Samuel Gibbs, the Guardian, 09/07/18).

The GDPR rules now in force could see a great increase in the penalties slapped on firms for past data breaches, with fines levied at a maximum of 4% of global revenues. For British Airways’ this amounts to about $630 million dollars based on last years revenue (Gwyn Topham, the Guardian, 09/06/18).

Yet many observers see fines this hefty as counterproductive and the catalyst to push business outside of the EU. Moreover, many international law firms and economists have doubts about the applicability of the GDRP outside of the EU, citing state sovereignty, and free enterprise protection in the United States, etc. The courts will likely further define the context of GRPRs applicability and may roll its reach back some. It is way to early to know what GDPR means in practicality but pushback is coming from well funded, well organized, well researched powerful law and business interest groups. GDPR is dangerously overbroad and ambiguous as echoed in this law firm newsletter (Wendy Butler Curtis and Jeffrey McKenn, Orrick, Herrington & Sutcliffe LLP, 09/09/18). We welcome the debate for a better more modern GDPR.

Thousands of MikroTik Routers Hacked to Spy On Network Traffic

router-hacking.pngAt present more than 7,500 Mikrotik routers have been compromised with malware when attackers configured the devices to forward network traffic to a handful of IP addresses under their control (Shaun Nichols, The Register, 09/04/18). According to Chinese cyber research firm 360 Netlab the attackers obtained access to the devices by exploiting CVE (Common Vulnerabilities and Exposures) 2018-14847. Ironically this vulnerability had a patch available since April 2018.

This vulnerability is associated with Any Directory File Read (CVE-2018-14847) in MikroTik routers which was found as exploitable by the CIA Vault 7 hacking tool identified as Chimay Red, along with another MikroTik’s Webfig remote code execution vulnerability.

Since 08/24/18 the 360 Netlab honeypot network had picked up on more than 5 million devices with an open TCP/8291 port worldwide, of which 1.2 million are MikroTik devices. Out of those, about 31 percent, or 370,000, are vulnerable to the flaw (Tara Seals, Threatpost, 09/04/18).

The infection does not appear to be targeting any country, as the hacked devices reside across five different continents with Russia, Iran, Brazil, and India being the most commonly impacted. The top 10 countries with compromised MickroTik routers are (Ms. Smith, CSO Online, 09/04/18).

  1. 1,628 in Russia
  2. 637 in Iran
  3. 615 in Brazil
  4. 594 in India
  5. 544 in Ukraine
  6. 375 in Bangladesh
  7. 364 in Indonesia
  8. 218 in Ecuador
  9. 191 in the US
  10. 189 in Argentina

The researchers noted that the malware is also resilient to reboots, leaving a firmware update as the only permanent solution to the problem (Shaun Nichols, The Register, 09/04/18). “In order for the attacker to gain control even after device reboot (IP change), the device is configured to run a scheduled task to periodically report its latest IP address by accessing a specific attacker’s URL,” Netlab writes.

Also, the attackers seek to infect victims with the browser-based Coinhive cryptomining script (Fig. 1). They achieve this by redirecting the HTTP proxy settings to an error page they created, where they placed the mining script. “By doing this, the attacker hopes to perform web mining for all the proxy traffic on the users’ devices,” 360 Netlab researchers indicated.

Hive

However, the attackers made a mistake when they set up proxy access control lists that block all external web resources, including those required for the mining operation (Fig. 1).

360 Netlab says it does not know what the ultimate goal of the attacker will be. Their analysis shows that the attacker is particularly interested in ports 20, 21, 25, 110, and 144, which are for FTP-data, FTP, SMTP, POP3, and IMAP traffic. An unusual interest is in traffic from SNMP (Simple Network Management Protocol) ports 161 and 162, which researchers cannot explain at the moment (Shaun Nichols, The Register, 09/04/18).

“This deserves some questions, why the attacker is paying attention to the network management protocol regular users barely use? Are they trying to monitor and capture some special users’ network SNPM community strings?” 360 Netlab asks.

Bleeping computers research recommends that MikroTik users install the latest firmware version on the device. Based on the information provided by 360 Netlab users can check if HTTP proxy, Socks4 proxy, and network traffic capture features are active and exploited by a malicious actor (Ionut Ilascu, Bleeping Computer, 09/04/18).

Reach out to my company Abstract Forward Consulting if you have questions.

In Cybersecurity There Are Two Kinds Of People: Those With Certs And Those Who Are Creative.

In cybersecurity there are two kinds of people, those with certifications and those who have proved they don’t need them. Just like degrees, certifications are only as good as the person holding them. If a person has a CISSP, a CISA, or another related certification, but does no more that attend the minimum continuing education to keep their certs in good standing, they will have little relevant security competence. Additionally, these certifications can not be compared to a CPA where the math and rules are clear and do not change at the speed of technology.

A person can show real world cybersecurity competency by building and defending websites and applications, by attending many top cybersecurity conferences and leaving some, by accurately following and blogging about threat actors (Brian Krebs), and by frequently speaking at security conferences – but more importantly their content needs to be validated by other thought leaders.

 

This is not at all to say that degrees and certifications have no value, but it is to say they are hyped up and not for everyone, especially those like Steve Jobs, Bill Gates, Larry Ellison, Mark Zuckerberg, and about 95% (est) of real hackers and technology security makers. These people are too focused on the synergies of the technology and threats “in the now” that they do not focus on memorizing things for tests that will likely become obsolete in 2-4 years anyway.

The problem with standardized tests is that they teach conformity in a limited non-real-world context based on limited information with no accurate knowledge of the future. A standardized test cannot teach or confirm creativity, quality character, incident response savvy, backwards engineering, your ability to actually build and defend an application, your ability to lead and inspire people in the right direction, stress management, and most importantly that you understand the threat actor profile and landscape and can adapt on your feet.

Many people who study for a security certification realize it’s a memorization and buzz word test. Yes, it will prove you are not a “complete moron” in security, but it will prove no more, and it has nothing to do with creativity. Yet the best security protections must be creative because the enemy is. Hackers use creativity and new technology models to break into systems in ways not thought of before. Yet before they break into these systems they have to learn and backwards engineer them. They do this with a type of intelligence and experience-based creativity that is too high for any standardized test to confirm.

If you survey all the major data breaches and hacks to find out what caused them and what could have prevented them, it is never because an organization “needed more people with standardized security certifications”. Rather, it is usually due to: lack of creativity, corporate silos, office bureaucracy, turfs wars (think why the FBI and CIA missed 9/11) poor communication, not enough real world red teaming, failure to patch, poor internet hygiene education, failure to measure and prioritize risk, and incompetent security leaders who only hire their friends or people who conform to their biases.

If you really want to learn and stay updated about cybersecurity, grab your laptop or tablet and blog real time at the Cybersecurity Summit in MN 10/22/18 to 10/24/18 – register here. Blogging is important because it makes you write down what you are learning, and your followers will force you to talk more about what your posting, so you will learn more by defended or changing it. You must be an active learner by creating and supporting the web technology behind your web-site – 100%.

Also, when attending these events don’t be like most people and hang only with your “established click”. Meet new people and be open to diverse viewpoints even ones that are hard to swallow – you grow more from that. Leave your assumptions at the door. Do not boast about the fact that you have an advanced degree or certification to someone else. You never know what the other person is capable of or has achieved. Remember most hackers and the best technology people are unorthodox.

Here is a run down of the amazing Cybersecurity Summit speakers.

  • Bruce Schneier, who will be signing copies of his forthcoming book “Click Here To Kill Everybody”
  • Chris Roberts, one of the world’s foremost experts on counter threat intelligence
  • Tony Sager, who leads the development of the CIS Critical Security Controls for the Center for Internet Security
  • Peter Brecl, Director of Managed Security Services at CenturyLink
  • Scott Borg, Director and Chief Economist at the U.S. Cyber Consequences Unit
  • Brian L. Levine, who recently engaged in the first criminal trial of a Chinese entity for trade secret theft that cost a U.S. company more than $1 billion
  • Tim Crothers, who built and leads the Cyber Fusion Center at Target

And many others!

To learn more and register for the event, go to www.cybersecuritysummit.org Register now now because prices will increase after Aug. 30. Came say hi to me at the event and reach out to my company Abstract Forward Consulting if you have questions.

Abstract Forward Podcast #1: Data Classification With Jim Danburg.

data_classification_2.jpgIn this episode, renowned governance, risk and compliance critical infrastructure security and resiliency expert Jim Danburg joins us for a candid and thought-provoking conversation on data classification, including a funny story doing a project for a CISO (chief information security officer).  More specifically, we discuss the four types of data classification vs. only three, data over-classification, data mis-classification, governance risk and compliance, data security, role based access control (RBAC), need to know policy, litigation discovery risk, the declining cost of data storage: disk vs. solid state, outsourcing data and PCI risk, mapping dependencies, the relationship between executives and data policy compliance, insider threat, bring your own device (BYOD) containerization: corporate vs. personal data with privacy implications, the secure destruction of data and hardware – and what it takes to improve all this!

Contact Abstract Forward Consulting here.

Disclaimer: This podcast does not represent the views of former or current employers and / or clients. This podcast will make every reasonable effort to verify facts and inferences therefrom. However, this podcast is intended to entertain and significantly inform its audience based on subjective reason based opinions. Non-public information will not be disclosed. Information obtained in this podcast may be materially out of date at or after the time of the podcast. This podcast is not legal, accounting, audit, health, technical, or financial advice. © Abstract Forward Consulting, LLC.