Protecting the Checkout Line | Understanding the Top Threats to Retail Cybersecurity

The retail sector, a cornerstone of the global economy, has faced an unprecedented wave of cyberattacks in recent years. Innovations in e-commerce and payment technology have transformed the way consumers shop, but it has also opened up new avenues for cyber threats.

The consequences of these attacks can reach far beyond the immediate financial losses. Customer trust and brand reputation – some of a retailer’s most valuable assets – are on the line to be irrevocably damaged. In an effort to protect customer and payment card data, retailers also have to abide by strict regulatory requirements, which have added another element to managing modern cyber risks.

This blog post explores how cybercriminals target this lucrative sector, the security challenges retailers face, and key strategies businesses can adopt to protect themselves and their customers from advancing threats.

A Decade of Growing Attacks On The Retail Sector

Over the past decade, the nature of cyber threats targeting the retail sector has evolved. What once consisted of relatively simple scams and basic phishing attempts has now grown into a much more sophisticated landscape fraught with ransomware, extortion, and attacks on software supply chains. Cybercriminals have also adapted their strategies to exploit the ever-expanding digital footprint of retailers.

The brief timeline of cyberattacks on global retailers below shows the growing interest cyber threat actors have for this major sector.

  • Target (2013) – Cybercriminals breached Target’s network during the Christmas shopping season, stealing sensitive data from approximately 40 million debit and credit card accounts and personal information of an additional 70 million customers. Attackers gained access through a third-party HVAC vendor’s compromised credentials, highlighting the vulnerability of supply chain connections. Once inside, they installed malware on Target’s point-of-sale systems, allowing them to harvest payment card data as customers made purchases.
  • eBay (2014) – eBay, one of the world’s largest online marketplaces, fell victim to a significant cyberattack that exposed the personal information of approximately 145 million users, making it one of the largest data breaches at the time. Cybercriminals gained access to a small number of eBay employee credentials, which allowed them to infiltrate the company’s corporate network. Once inside, they managed to access a database containing user information, including names, addresses, email addresses, and encrypted passwords.
  • Home Depot (2014) – Known as one of the largest home improvement retailers in North America, Home Depot fell victim to a massive cyberattack that compromised the credit and debit card information of approximately 56 million customers as well as exposing approximately 53 million customer email addresses. The breach occurred when cybercriminals exploited a third-party vendor’s login credentials to gain unauthorized access to the retailer’s network. Once inside, they deployed malware on the retailer’s point-of-sale (POS) systems, enabling them to steal payment card data during transactions.
  • Costco (2015) – The popular wholesale retail giant faced a notable attack wherein threat actors breached Costco’s photo website and compromised the personal information of around 58,000 customers. This breach exposed customer names, addresses, and in some cases, sensitive payment card information.
  • Saks Fifth Avenue / Lord & Taylor (2018) – The two luxury department store chains were hit by a major cyberattack orchestrated by a group of cybercriminals known as JokerStash, or Fin7. The attack exposed sensitive information belonging to nearly 5 million customers. The attackers infiltrated the stores’ payment processing systems through a phishing campaign, allowing them to steal vast amounts of customer payment card data. The breach was extensive, impacting customers who had shopped at these retailers between May 2017 and April 2018.
  • Under Armor (2018) – The sportswear and athletic apparel manufacturer experienced a cyberattack that raised concerns about the protection of customer information. While the breach didn’t expose financial data or payment information, it did affect millions of user accounts on the company’s popular fitness tracking app, MyFitnessPal. The attack resulted in unauthorized access to user data, including usernames, email addresses, and hashed passwords.
  • Ikea (2021) – Globally recognized furniture and home goods retailer faced a cyberattack that targeted one of its subsidiaries, TaskRabbit. TaskRabbit is an online platform that connects customers with freelance labor for various tasks and services. The cyberattack temporarily disrupted TaskRabbit’s operations, impacting its website and mobile app. In response, Ikea promptly shut down the platform while they investigated the breach and took steps to secure customer data.
  • Sobeys (2022) – Sobeys, one of Canada’s largest supermarket chains, fell victim to an attack that disrupted its operations and impacted the company’s ability to process transactions. This led to in-store payment processing issues, causing disruptions for both customers and employees. The total amount of losses from the attack was reportedly $25 million in annual net earnings.
  • Indigo (2023) – One of Canada’s largest book retailers, Indigo, faced a ransomware event that disrupted their operations and booted payment systems offline, including its e-commerce platform and customer databases. The attack has since been claimed by notorious threat group, LockBit, and confirmed the theft of current and former employee data.
  • Hot Topic (2023) – Using credential stuffing tactics, cybercriminals breached the systems of popular alternative fashion retailer, Hot Topic. During the attack, the criminals exploited the reuse of usernames and passwords across different online services, attempting to gain unauthorized access to Hot Topic customer accounts. Any customers who had reused passwords were at risk, as their accounts were vulnerable to unauthorized access.

A Catalog of Cyber Threats Faced by Retailers

Retailers these days grapple with a wide variety of threats, including ransomware, phishing scams, point-of-sale (POS) system breaches, supply chain attacks, and even insider threats.

  • Ransomware with Double & Triple Extortion – Ransomware attacks can disrupt retailer operations due to service outages caused by encrypted data. In double extortion attacks, cybercriminals additionally steal sensitive data before encrypting it. They then threaten to release this stolen data publicly unless a ransom is paid. Triple extortion takes this one step further with threats to launch distributed denial-of-service (DDoS) attacks against the victim if the ransom demand is not met.
  • Supply Chain Attacks – Threat actors target third-party suppliers to infiltrate a retailer’s network, compromising data and operations.
  • Insider Threats – Malicious employees or partners can intentionally harm retailers by leaking sensitive data, sabotaging systems, or assisting external attackers.
  • Bot Attacks – Bot attacks deploy automated software programs to mimic human behavior, overwhelming websites and disrupting online operations. These malicious bots can scrape prices, abuse promotional offers, and complete fraudulent transactions.
  • POS Malware – Point-of-sale (POS) malware compromises POS terminals to steal payment card data during the transaction process.
  • Mobile Purchase, In-Store Payment Scams – Cyber criminals exploit mobile apps for fraudulent in-store purchases, often using stolen payment details to make unauthorized transactions.
  • Buy Online, Pick Up In-Store Scams – Threat actors manipulate the “buy online, pick up in store” system to collect orders without payment, relying on forged confirmations or identity theft.
  • “Add New Payment” Scams – Scammers trick users into adding fraudulent payment methods to online retail accounts, enabling unauthorized transactions.
  • Gift Card Fraud – Cybercriminals exploit vulnerabilities in gift card systems, often through brute force attacks or by compromising legitimate gift cards with stolen funds. These attackers manipulate gift card balances, rendering them worthless or transferring funds to their own accounts.

How PCI-DSS Sets Retailers Up For Success

The Payment Card Industry Data Security Standard (PCI-DSS) is a comprehensive set of security standards designed to safeguard the sensitive payment card data of customers during transactions. Developed by major credit card companies like Visa, MasterCard, American Express, Discover, and JCB, PCI-DSS is crucial for any retailers that handle payment card information. PCI-DSS compliance helps retailers create a secure environment for processing payments. With the right controls in place, it helps reduce the risk of costly data breaches, regulatory penalties, and brand damage.

Some key ways in which PCI-DSS supports retailers’ cybersecurity efforts include:

  • Data Encryption – PCI-DSS mandates the encryption of cardholder data during transmission and when stored on servers or other devices. This encryption ensures that even if cybercriminals breach the system, the stolen data remains unreadable and unusable.
  • Regular Security Assessments – Retailers are required to conduct regular security assessments and vulnerability scans to identify and address potential weaknesses in their payment card systems. This proactive approach helps in detecting and mitigating vulnerabilities before they can be exploited by attackers.
  • Access Control – PCI-DSS emphasizes strict access control measures, ensuring that only authorized personnel have access to sensitive payment card data. This reduces the risk of insider threats and unauthorized access.
  • Network Security – Retailers must maintain robust network security measures, such as firewalls, intrusion detection systems, and regular security testing, to protect their payment card infrastructure from external threats.

Retailers from around the world trust SentinelOne’s Singularity™ platform to help them meet PCI-DSS cybersecurity controls and protect their business and customers from disruptive attacks. Read more about how Singularity measures against PCI-DSS requirements in a report conducted by Tevora, a security and risk management consulting firm, and a reputable PCI Qualified Security Assessor (QSA) and HITRUST Assessor.

SentinelOne Singularity XDR – A Comprehensive Solution for Retailer Protection

SentinelOne Singularity XDR offers a robust, all-encompassing solution that protects organizations from attacks. By extending coverage to all access points – from endpoints and users to cloud workloads and other devices – Singularity XDR delivers unparalleled visibility and security.

Key features of SentinelOne Singularity XDR that help defend against ATO attacks include:

  • Endpoint Protection – Secure endpoints with advanced machine learning algorithms that detect and block malicious activities in real-time.
  • User Behavior Analytics – Analyze user behavior patterns to identify potential account takeover attempts and take immediate action to prevent unauthorized access.
  • Cloud Workload Security – Protect your cloud infrastructure with automated CWPP enforcement, real-time monitoring, and threat detection, ensuring a secure environment for user accounts and sensitive data.
  • Integration with Existing Security Infrastructure – SentinelOne Singularity XDR seamlessly integrates with existing security stack, enhancing the organization’s overall defense against cyber threats.

Conclusion

The ecosystem for attacks on the retail sector has steadily transformed over the past decade. These attacks can have devastating consequences, from disrupting operations and causing financial losses to eroding customer trust and triggering legal consequences.

Robust cybersecurity measures can help retailers defeat cyber attacks. This includes endpoint protection with real-time detection and mitigation, cloud workload security, and compliance with frameworks such as PCI-DSS.

To learn more about how SentinelOne’s Singularity™ XDR platform can help protect your organization, contact us or request a demo.

SentinelOne Singularity XDR
Supercharge. Fortify. Automate. Extend protection with unfettered visibility, proven protection, and unparalleled response. Discover the power of autonomous with Singularity XDR.

Experts Fear Crooks are Cracking Keys Stolen in LastPass Breach

In November 2022, the password manager service LastPass disclosed a breach in which hackers stole password vaults containing both encrypted and plaintext data for more than 25 million users. Since then, a steady trickle of six-figure cryptocurrency heists targeting security-conscious people throughout the tech industry has led some security experts to conclude that crooks likely have succeeded at cracking open some of the stolen LastPass vaults.

Taylor Monahan is founder and CEO of MetaMask, a popular software cryptocurrency wallet used to interact with the Ethereum blockchain. Since late December 2022, Monahan and other researchers have identified a highly reliable set of clues that they say connect recent thefts targeting more than 150 people, Collectively, these individuals have been robbed of more than $35 million worth of crypto.

Monahan said virtually all of the victims she has assisted were longtime cryptocurrency investors, and security-minded individuals. Importantly, none appeared to have suffered the sorts of attacks that typically preface a high-dollar crypto heist, such as the compromise of one’s email and/or mobile phone accounts.

“The victim profile remains the most striking thing,” Monahan wrote. “They truly all are reasonably secure. They are also deeply integrated into this ecosystem, [including] employees of reputable crypto orgs, VCs [venture capitalists], people who built DeFi protocols, deploy contracts, run full nodes.”

Monahan has been documenting the crypto thefts via Twitter/X since March 2023, frequently expressing frustration in the search for a common cause among the victims. Then on Aug. 28, Monahan said she’d concluded that the common thread among nearly every victim was that they’d previously used LastPass to store their “seed phrase,” the private key needed to unlock access to their cryptocurrency investments.

MetaMask owner Taylor Monahan on Twitter. Image: twitter.com/tayvano

Armed with your secret seed phrase, anyone can instantly access all of the cryptocurrency holdings tied to that cryptographic key, and move the funds to anywhere they like.

Which is why the best practice for many cybersecurity enthusiasts has long been to store their seed phrases either in some type of encrypted container — such as a password manager — or else inside an offline, special-purpose hardware encryption device, such as a Trezor or Ledger wallet.

“The seed phrase is literally the money,” said Nick Bax, director of analytics at Unciphered, a cryptocurrency wallet recovery company. “If you have my seed phrase, you can copy and paste that into your wallet, and then you can see all my accounts. And you can transfer my funds.”

Bax said he closely reviewed the massive trove of cryptocurrency theft data that Taylor Monahan and others have collected and linked together.

“It’s one of the broadest and most complex cryptocurrency investigations I’ve ever seen,” Bax said. “I ran my own analysis on top of their data and reached the same conclusion that Taylor reported. The threat actor moved stolen funds from multiple victims to the same blockchain addresses, making it possible to strongly link those victims.”

Bax, Monahan and others interviewed for this story say they’ve identified a unique signature that links the theft of more than $35 million in crypto from more than 150 confirmed victims, with roughly two to five high-dollar heists happening each month since December 2022.

KrebsOnSecurity has reviewed this signature but is not publishing it at the request of Monahan and other researchers, who say doing so could cause the attackers to alter their operations in ways that make their criminal activity more difficult to track.

But the researchers have published findings about the dramatic similarities in the ways that victim funds were stolen and laundered through specific cryptocurrency exchanges. They also learned the attackers frequently grouped together victims by sending their cryptocurrencies to the same destination crypto wallet.

A graphic published by @tayvano on Twitter depicting the movement of stolen cryptocurrencies from victims who used LastPass to store their crypto seed phrases.

By identifying points of overlap in these destination addresses, the researchers were then able to track down and interview new victims. For example, the researchers said their methodology identified a recent multi-million dollar crypto heist victim as an employee at Chainalysis, a blockchain analysis firm that works closely with law enforcement agencies to help track down cybercriminals and money launderers.

Chainalysis confirmed that the employee had suffered a high-dollar cryptocurrency heist late last month, but otherwise declined to comment for this story.

Bax said the only obvious commonality between the victims who agreed to be interviewed was that they had stored the seed phrases for their cryptocurrency wallets in LastPass.

“On top of the overlapping indicators of compromise, there are more circumstantial behavioral patterns and tradecraft which are also consistent between different thefts and support the conclusion,” Bax told KrebsOnSecuirty. “I’m confident enough that this is a real problem that I’ve been urging my friends and family who use LastPass to change all of their passwords and migrate any crypto that may have been exposed, despite knowing full well how tedious that is.”

LastPass declined to answer questions about the research highlighted in this story, citing an ongoing law enforcement investigation and pending litigation against the company in response to its 2022 data breach.

“Last year’s incident remains the subject of an ongoing investigation by law enforcement and is also the subject of pending litigation,” LastPass said in a written statement provided to KrebsOnSecurity. “Since last year’s attack on LastPass, we have remained in contact with law enforcement and continue to do so.”

Their statement continues:

“We have shared various technical information, Indicators of Compromise (IOCs), and threat actor tactics, techniques, and procedures (TTPs) with our law enforcement contacts as well as our internal and external threat intelligence and forensic partners in an effort to try and help identify the parties responsible. In the meantime, we encourage any security researchers to share any useful information they believe they may have with our Threat Intelligence team by contacting securitydisclosure@lastpass.com.”

THE LASTPASS BREACH(ES)

On August 25, 2022, LastPass CEO Karim Toubba wrote to users that the company had detected unusual activity in its software development environment, and that the intruders stole some source code and proprietary LastPass technical information. On Sept. 15, 2022, LastPass said an investigation into the August breach determined the attacker did not access any customer data or password vaults.

But on Nov. 30, 2022, LastPass notified customers about another, far more serious security incident that the company said leveraged data stolen in the August breach. LastPass disclosed that criminal hackers had compromised encrypted copies of some password vaults, as well as other personal information.

In February 2023, LastPass disclosed that the intrusion involved a highly complex, targeted attack against a DevOps engineer who was one of only four LastPass employees with access to the corporate vault.

“This was accomplished by targeting the DevOps engineer’s home computer and exploiting a vulnerable third-party media software package, which enabled remote code execution capability and allowed the threat actor to implant keylogger malware,” LastPass officials wrote. “The threat actor was able to capture the employee’s master password as it was entered, after the employee authenticated with MFA, and gain access to the DevOps engineer’s LastPass corporate vault.”

Dan Goodin at Ars Technica reported and then confirmed that the attackers exploited a known vulnerability in a Plex media server that the employee was running on his home network, and succeeded in installing malicious software that stole passwords and other authentication credentials. The vulnerability exploited by the intruders was patched back in 2020, but the employee never updated his Plex software.

As it happens, Plex announced its own data breach one day before LastPass disclosed its initial August intrusion. On August 24, 2022, Plex’s security team urged users to reset their passwords, saying an intruder had accessed customer emails, usernames and encrypted passwords.

OFFLINE ATTACKS

A basic functionality of LastPass is that it will pick and remember lengthy, complex passwords for each of your websites or online services. To automatically populate the appropriate credentials at any website going forward, you simply authenticate to LastPass using your master password.

LastPass has always emphasized that if you lose this master password, that’s too bad because they don’t store it and their encryption is so strong that even they can’t help you recover it.

But experts say all bets are off when cybercrooks can get their hands on the encrypted vault data itself — as opposed to having to interact with LastPass via its website. These so-called “offline” attacks allow the bad guys to conduct unlimited and unfettered “brute force” password cracking attempts against the encrypted data using powerful computers that can each try millions of password guesses per second.

“It does leave things vulnerable to brute force when the vaults are stolen en masse, especially if info about the vault HOLDER is available,” said Nicholas Weaver, a researcher at University of California, Berkeley’s International Computer Science Institute (ICSI) and lecturer at UC Davis. “So you just crunch and crunch and crunch with GPUs, with a priority list of vaults you target.”

How hard would it be for well-resourced criminals to crack the master passwords securing LastPass user vaults? Perhaps the best answer to this question comes from Wladimir Palant, a security researcher and the original developer behind the Adblock Plus browser plugin.

In a December 2022 blog post, Palant explained that the crackability of the LastPass master passwords depends largely on two things: The complexity of the master password, and the default settings for LastPass users, which appear to have varied quite a bit based on when those users began patronizing the service.

LastPass says that since 2018 it has required a twelve-character minimum for master passwords, which the company said “greatly minimizes the ability for successful brute force password guessing.”

But Palant said while LastPass indeed improved its master password defaults in 2018, it did not force all existing customers who had master passwords of lesser lengths to pick new credentials that would satisfy the 12-character minimum.

“If you are a LastPass customer, chances are that you are completely unaware of this requirement,” Palant wrote. “That’s because LastPass didn’t ask existing customers to change their master password. I had my test account since 2018, and even today I can log in with my eight-character password without any warnings or prompts to change it.”

Palant believes LastPass also failed to upgrade many older, original customers to more secure encryption protections that were offered to newer customers over the years. One important setting in LastPass is the number of “iterations,” or how many times your master password is run through the company’s encryption routines. The more iterations, the longer it takes an offline attacker to crack your master password.

Palant noted last year that for many older LastPass users, the initial default setting for iterations was anywhere from “1” to “500.” By 2013, new LastPass customers were given 5,000 iterations by default. In February 2018, LastPass changed the default to 100,100 iterations. And very recently, it upped that again to 600,000.

Palant said the 2018 change was in response to a security bug report he filed about some users having dangerously low iterations in their LastPass settings.

“Worse yet, for reasons that are beyond me, LastPass didn’t complete this migration,” Palant wrote. “My test account is still at 5,000 iterations, as are the accounts of many other users who checked their LastPass settings. LastPass would know how many users are affected, but they aren’t telling that. In fact, it’s painfully obvious that LastPass never bothered updating users’ security settings. Not when they changed the default from 1 to 500 iterations. Not when they changed it from 500 to 5,000. Only my persistence made them consider it for their latest change. And they still failed implementing it consistently.”

A chart on Palant’s blog post offers an idea of how increasing password iterations dramatically increases the costs and time needed by the attackers to crack someone’s master password. Palant said it would take a single GPU about a year to crack a password of average complexity with 500 iterations, and about 10 years to crack the same password run through 5,000 iterations.

Image: palant.info

However, these numbers radically come down when a determined adversary also has other large-scale computational assets at their disposal, such as a bitcoin mining operation that can coordinate the password-cracking activity across multiple powerful systems simultaneously.

Weaver said a password or passphrase with average complexity — such as “Correct Horse Battery Staple” is only secure against online attacks, and that its roughly 40 bits of randomness or “entropy” means a graphics card can blow through it in no time.

“An Nvidia 3090 can do roughly 4 million [password guesses] per second with 1000 iterations, but that would go down to 8 thousand per second with 500,000 iterations, which is why iteration count matters so much,” Weaver said. “So a combination of ‘not THAT strong of a password’ and ‘old vault’ and ‘low iteration count’ would make it theoretically crackable but real work, but the work is worth it given the targets.”

Reached by KrebsOnSecurity, Palant said he never received a response from LastPass about why the company apparently failed to migrate some number of customers to more secure account settings.

“I know exactly as much as everyone else,” Palant wrote in reply. “LastPass published some additional information in March. This finally answered the questions about the timeline of their breach – meaning which users are affected. It also made obvious that business customers are very much at risk here, Federated Login Services being highly compromised in this breach (LastPass downplaying as usual of course).”

Palant said upon logging into his LastPass account a few days ago, he found his master password was still set at 5,000 iterations.

INTERVIEW WITH A VICTIM

KrebsOnSecurity interviewed one of the victims tracked down by Monahan, a software engineer and startup founder who recently was robbed of approximately $3.4 million worth of different cryptocurrencies. The victim agreed to tell his story in exchange for anonymity because he is still trying to claw back his losses. We’ll refer to him here as “Connor” (not his real name).

Connor said he began using LastPass roughly a decade ago, and that he also stored the seed phrase for his primary cryptocurrency wallet inside of LastPass. Connor chose to protect his LastPass password vault with an eight character master password that included numbers and symbols (~50 bits of entropy).

“I thought at the time that the bigger risk was losing a piece of paper with my seed phrase on it,” Connor said. “I had it in a bank security deposit box before that, but then I started thinking, ‘Hey, the bank might close or burn down and I could lose my seed phrase.’”

Those seed phrases sat in his LastPass vault for years. Then, early on the morning of Sunday, Aug. 27, 2023, Connor was awoken by a service he’d set up to monitor his cryptocurrency addresses for any unusual activity: Someone was draining funds from his accounts, and fast.

Like other victims interviewed for this story, Connor didn’t suffer the usual indignities that typically presage a cryptocurrency robbery, such as account takeovers of his email inbox or mobile phone number.

Connor said he doesn’t know the number of iterations his master password was given originally, or what it was set at when the LastPass user vault data was stolen last year. But he said he recently logged into his LastPass account and the system forced him to upgrade to the new 600,000 iterations setting.

“Because I set up my LastPass account so early, I’m pretty sure I had whatever weak settings or iterations it originally had,” he said.

Connor said he’s kicking himself because he recently started the process of migrating his cryptocurrency to a new wallet protected by a new seed phrase. But he never finished that migration process. And then he got hacked.

“I’d set up a brand new wallet with new keys,” he said. “I had that ready to go two months ago, but have been procrastinating moving things to the new wallet.”

Connor has been exceedingly lucky in regaining access to some of his stolen millions in cryptocurrency. The Internet is swimming with con artists masquerading as legitimate cryptocurrency recovery experts. To make matters worse, because time is so critical in these crypto heists, many victims turn to the first quasi-believable expert who offers help.

Instead, several friends steered Connor to Flashbots.net, a cryptocurrency recovery firm that employs several custom techniques to help clients claw back stolen funds — particularly those on the Ethereum blockchain.

According to Connor, Flashbots helped rescue approximately $1.5 million worth of the $3.4 million in cryptocurrency value that was suddenly swept out of his account roughly a week ago. Lucky for him, Connor had some of his assets tied up in a type of digital loan that allowed him to borrow against his various cryptocurrency assets.

Without giving away too many details about how they clawed back the funds, here’s a high level summary: When the crooks who stole Connor’s seed phrase sought to extract value from these loans, they were borrowing the maximum amount of credit that he hadn’t already used. But Connor said that left open an avenue for some of that value to be recaptured, basically by repaying the loan in many small, rapid chunks.

WHAT SHOULD LASTPASS USERS DO?

According to MetaMask’s Monahan, users who stored any important passwords with LastPass — particularly those related to cryptocurrency accounts — should change those credentials immediately, and migrate any crypto holdings to new offline hardware wallets.

“Really the ONLY thing you need to read is this,” Monahan pleaded to her 70,000 followers on Twitter/X: “PLEASE DON’T KEEP ALL YOUR ASSETS IN A SINGLE KEY OR SECRET PHRASE FOR YEARS. THE END. Split up your assets. Get a hw [hardware] wallet. Migrate. Now.”

If you also had passwords tied to banking or retirement accounts, or even just important email accounts — now would be a good time to change those credentials as well.

I’ve never been comfortable recommending password managers, because I’ve never seriously used them myself. Something about putting all your eggs in one basket. Heck, I’m so old-fashioned that most of my important passwords are written down and tucked away in safe places.

But I recognize this antiquated approach to password management is not for everyone. Connor says he now uses 1Password, a competing password manager that recently earned the best overall marks from Wired and The New York Times.

1Password says that three things are needed to decrypt your information: The encrypted data itself, your account password, and your Secret Key. Only you know your account password, and your Secret Key is generated locally during setup.

“The two are combined on-device to encrypt your vault data and are never sent to 1Password,” explains a 1Password blog post ‘What If 1Password Gets Hacked?‘ “Only the encrypted vault data lives on our servers, so neither 1Password nor an attacker who somehow manages to guess or steal your account password would be able to access your vaults – or what’s inside them.

Weaver said that Secret Key adds an extra level of randomness to all user master passwords that LastPass didn’t have.

“With LastPass, the idea is the user’s password vault is encrypted with a cryptographic hash (H) of the user’s passphrase,” Weaver said. “The problem is a hash of the user’s passphrase is remarkably weak on older LastPass vaults with master passwords that do not have many iterations. 1Password uses H(random-key||password) to generate the password, and it is why you have the QR code business when adding a new device.”

Weaver said LastPass deserves blame for not having upgraded iteration counts for all users a long time ago, and called the latest forced upgrades “a stunning indictment of the negligence on the part of LastPass.”

“That they never even notified all those with iteration counts of less than 100,000 — who are really vulnerable to brute force even with 8-character random passwords or ‘correct horse battery staple’ type passphrases — is outright negligence,” Weaver said. “I would personally advocate that nobody ever uses LastPass again: Not because they were hacked. Not because they had an architecture (unlike 1Password) that makes such hacking a problem. But because of their consistent refusal to address how they screwed up and take proactive efforts to protect their customers.”

Bax and Monahan both acknowledged that their research alone can probably never conclusively tie dozens of high-dollar crypto heists over the past year to the LastPass breach. But Bax says at this point he doesn’t see any other possible explanation.

“Some might say it’s dangerous to assert a strong connection here, but I’d say it’s dangerous to assert there isn’t one,” he said. “I was arguing with my fiance about this last night. She’s waiting for LastPass to tell her to change everything. Meanwhile, I’m telling her to do it now.”

The Good, the Bad and the Ugly in Cybersecurity – Week 35

The Good | International Operation Takes Down Multi-Layered Qakbot Infrastructure

Qakbot, a long-established malware and botnet infrastructure in the cyber threat ecosystem, was toppled this week after a successful global operation led by US authorities.

Dubbed “Operation Duck Hunt”, the joint operation involved redirecting the botnet’s communication to FBI-controlled servers. The FBI seized the botnet’s critical infrastructure along with approximately $8.6 million in cryptocurrency and were able to uninstall the malware from some 700,000 infected devices – 200,000 of which were situated in the US.

In its first form circa 2008, Qakbot (aka Qbot, Quackbot, Pinkslipbot, and TA750) emerged as a banking trojan aimed at pilfering banking credentials, website cookies, and credit card data for financial fraud. Over time, the trojan evolved into a C2-based malware delivery service for other threat actors, providing initial network access for ransomware attacks, data theft, and a diverse range of malicious cyber activities. Qakbot has been observed partnering with various ransomware operators including BlackCat, Black Basta, Conti, REvil, and RansomEXX.

Qakbot’s tiered C2 server infrastructure (Source: CISA)

Qakbot victims span organizations across several sectors including governments and healthcare providers. Propagation of the malware relies on phishing campaigns, incorporating tactics like reply-chain email attacks, where cybercriminals hijack email threads, respond with their own messages, and embed malicious attachments that install the Qakbot malware to the victim’s device.

Major takedowns like this one do much to shake up the cybercrime ecosystem, even though it is expected that threat groups will evolve and regroup. However, the success of Operation Duck Hunt underscores how effective global law enforcement collaboration can be in the ongoing fight against cyber threats.

The Bad | Ransomware Operators Target Critical Citrix NetScaler Vulnerability

Unpatched, Internet-facing Citrix NetScaler systems are under further attack this week by unconfirmed threat actors in what appears to be an ongoing ransomware campaign. The attack chain involves exploiting a critical code injection vulnerability, tracked as CVE-2023-3519 (CVSS score: 9.8), which affects NetScaler ADC and Gateway servers and could enable unauthenticated remote code execution (RCE).

So far, the vulnerability has been used to perform a domain-wide attack where payloads were injected into legitimate executables such as the Windows Update Agent (wuauclt.exe) and the Windows Management Instrumentation Provider Service (wmiprvse.exe). Citrix’s security bulletin recommends customers to install the patched versions of NetScaler ADC and NetScaler Gateway immediately to minimize potential threats.

Alongside the exploit, the attackers have also employed tactics such as distributing obfuscated PowerShell scripts, PHP web shells, and leveraging a malware staging service called BlueVPS. The pattern of these attacks closely resembles a campaign reported in early August, in which around 2,000 Citrix NetScaler systems were backdoored.

According to cybersecurity researchers, the attacks from this week and earlier last month may be tied to the FIN8 hacking group, which specializes in ransomware campaigns targeting retail, food services, and hospitality industries.

Anatomy of a FIN8 cyberattack (Source: Bitdefender)

This surge in ransomware attacks coincides with the trend of cybercriminals exploiting low-hanging security vulnerabilities found in popular software. Ransomware groups such as FIN8 also continue to use customized and/or updated malware strains to refine their attack methodologies and encrypt stolen data faster, highlighting the need for organizations to focus their cybersecurity strategy on real-time detection and response capabilities.

The Ugly | China-Backed Actors Attack Local Government Agencies Using Barracuda Flaw

Chinese threat actors are currently suspected of launching a chain of targeted attacks on local government and government-affiliated organizations globally through a zero-day vulnerability (CVE-2023-2868, CVSS score: 9.8) in the Barracuda Email Security Gateway (ESG).

Security researchers this week revealed that a significant portion of the breached appliances belonged to North American-based agencies from all levels of government including state, provincial, county, tribal, and municipal. While local government targeting makes up about 7% of all affected organizations, this figure rises to nearly 17% within the US alone.

The primary motivation behind the attacks was espionage. The threat actor, tracked as UNC4841, engaged in targeted data exfiltration from systems linked to prominent users in government and high-tech sectors.

The vulnerabilities in the Barracuda ESG were first disclosed on May 20, with the company issuing patches and remote fixes. However, it was later discovered that the zero-day had been exploited since at least October 2022, employing new malware variants like SeaSpy, Saltwater, and SeaSide to gain unauthorized access.

While Barracuda has not found evidence of new ESG appliances being compromised after patching, the law enforcement authorities warn that the patches are insufficient, and the vulnerability continues to be exploited. Barracuda customers are advised to isolate and replace any compromised appliances quickly, check their networks for indications of potential breaches, and rotate all enterprise-privileged credentials to minimize the risk of attacks.

Why is .US Being Used to Phish So Many of Us?

Domain names ending in “.US” — the top-level domain for the United States — are among the most prevalent in phishing scams, new research shows. This is noteworthy because .US is overseen by the U.S. government, which is frequently the target of phishing domains ending in .US. Also, .US domains are only supposed to be available to U.S. citizens and to those who can demonstrate that they have a physical presence in the United States.

.US is the “country code top-level domain” or ccTLD of the United States. Most countries have their own ccTLDs: .MX for Mexico, for example, or .CA for Canada. But few other major countries in the world have anywhere near as many phishing domains each year as .US.

That’s according to The Interisle Consulting Group, which gathers phishing data from multiple industry sources and publishes an annual report on the latest trends. Interisle’s newest study examined six million phishing reports between May 1, 2022 and April 30, 2023, and found 30,000 .US phishing domains.

.US is overseen by the National Telecommunications and Information Administration (NTIA), an executive branch agency of the U.S. Department of Commerce. However, NTIA currently contracts out the management of the .US domain to GoDaddy, by far the world’s largest domain registrar.

Under NTIA regulations, the administrator of the .US registry must take certain steps to verify that their customers actually reside in the United States, or own organizations based in the U.S. But Interisle found that whatever GoDaddy was doing to manage that vetting process wasn’t working.

“The .US ‘nexus’ requirement theoretically limits registrations to parties with a national connection, but .US had very high numbers of phishing domains,” Interisle wrote. “This indicates a possible problem with the administration or application of the nexus requirements.”

Dean Marks is emeritus executive director for a group called the Coalition for Online Accountability, which has been critical of the NTIA’s stewardship of .US. Marks says virtually all European Union member state ccTLDs that enforce nexus restrictions also have massively lower levels of abuse due to their policies and oversight.

“Even very large ccTLDs, like .de for Germany — which has a far larger market share of domain name registrations than .US — have very low levels of abuse, including phishing and malware,” Marks told KrebsOnSecurity. “In my view, this situation with .US should not be acceptable to the U.S. government overall, nor to the US public.”

Marks said there are very few phishing domains ever registered in other ccTLDs that also restrict registrations to their citizens, such as .HU (Hungary), .NZ (New Zealand), and .FI (Finland), where a connection to the country, a proof of identity, or evidence of incorporation are required.

“Or .LK (Sri Lanka), where the acceptable use policy includes a ‘lock and suspend’ if domains are reported for suspicious activity,” Marks said. “These ccTLDs make a strong case for validating domain registrants in the interest of public safety.”

Sadly, .US has been a cesspool of phishing activity for many years. As far back as 2018, Interisle found .US domains were the worst in the world for spam, botnet (attack infrastructure for DDOS etc.) and illicit or harmful content. Back then, .US was being operated by a different contractor.

In response to questions from KrebsOnSecurity, GoDaddy said all .US registrants must certify that they meet the NTIA’s nexus requirements. But this appears to be little more than an affirmative response that is already pre-selected for all new registrants.

Attempting to register a .US domain through GoDaddy, for example, leads to a U.S. Registration Information page that auto-populates the nexus attestation field with the response, “I am a citizen of the United States.” Other options include, “I am a permanent resident of the US,” and “My primary domicile is in the US.” It currently costs just $4.99 to obtain a .US domain through GoDaddy.

GoDaddy said it also conducts a scan of selected registration request information, and conducts “spot checks” on registrant information.

“We conduct regular reviews, per policy, of registration data within the Registry database to determine Nexus compliance with ongoing communications to registrars and registrants,” the company said in a written statement.

GoDaddy says it “is committed to supporting a safer online environment and proactively addressing this issue by assessing it against our own anti-abuse mitigation system.”

“We stand against DNS abuse in any form and maintain multiple systems and protocols to protect all the TLDs we operate,” the statement continued. “We will continue to work with registrars, cybersecurity firms and other stakeholders to make progress with this complex challenge.”

Interisle found significant numbers of .US domains were registered to attack some of the United States’ most prominent companies, including Bank of America, Amazon, AppleAT&T, Citi, Comcast, Microsoft, Meta, and Target.

“Ironically, at least 109 of the .US domains in our data were used to attack the United States government, specifically the United States Postal Service and its customers,” Interisle wrote. “.US domains were also used to attack foreign government operations: six .US domains were used to attack Australian government services, six attacked Great’s Britain’s Royal Mail, one attacked Canada Post, and one attacked the Denmark Tax Authority.”

The NTIA recently published a proposal that would allow GoDaddy to redact registrant data from WHOIS registration records. The current charter for .US specifies that all .US registration records be public.

Interisle argues that without more stringent efforts to verify a United States nexus for new .US domain registrants, the NTIA’s proposal will make it even more difficult to identify phishers and verify registrants’ identities and nexus qualifications.

The NTIA has not yet responded to requests for comment.

Interisle sources its phishing data from several places, including the Anti-Phishing Working Group (APWG), OpenPhish, PhishTank, and Spamhaus. For more phishing facts, see Interisle’s 2023 Phishing Landscape report (PDF).

Endpoint, Identity and Cloud | Top Cyber Attacks of 2023 (So Far)

2023 has been no stranger to cyber threats and both the rates and sophistication of attacks launched have only continued on their upward trajectories. Based on findings from a recent Cyber Threat Intelligence Index report, threats like ransomware, data breaches, and software vulnerabilities have all made major impacts on the landscape this year. As global enterprises have scaled up the amount of data they produce and store, threat actors have kept a watchful eye for new opportunities for attack.

In this post, learn about some of the most pressing cyber threats seen targeting the endpoint, identity, and cloud surfaces from the first three quarters of this year. By dissecting the causes and impacts of these notable attacks, enterprise and security leaders can better secure their data, systems, and networks against advanced threats down the line.

Endpoint-Based Attacks

Endpoint attacks have evolved into a critical concern, posing substantial threats to businesses across all industry verticals. As the amount of endpoints multiply and remote work opportunities continue to be the norm, the endpoint attack surface expands and leaves organizations vulnerable to a range of threats.

Attacks on endpoints exploit vulnerabilities within privileged computers, smartphones, and internet of things (IoT) devices. Major threats that loom over the endpoint attack surface include ransomware, phishing scams, zero-day exploits, fileless malware, and Denial-of-Service (DoS) attacks.

Ransomware Attacks

In the first three quarters of 2023, ransomware has targeted multiple critical infrastructure and major companies, including those listed below:

  • San Francisco’s Bay Area Rapid Transit (Vice Society) – San Francisco’s BART was hit in January by a ransomware attack claimed by the Vice Society group. While no service disruption occurred, stolen data was posted online. BART confirms no impact on services or internal systems, but concerns from the incident have arisen due to potential backdoor access to critical systems.
  • Reddit (BlackCat Ransomware) – ALPHV ransomware group, also known as BlackCat, claimed responsibility for a February cyberattack on Reddit. The attack, initiated through a successful phishing campaign, resulted in the theft of 80GB of data, including internal documents, source code, and employee and advertiser information. The group had announced its intent to leak the stolen data after failed attempts to extort $4.5 million from Reddit for its deletion.
  • Dole Food Company – Dole Food Company confirmed a ransomware attack that occurred in February, which compromised an undisclosed number of employee records. While the impact was limited, production plants in North America were temporarily shut down due to the attack. The incident affected Dole’s workforce data, as reported in their annual filing with the SEC.
  • United States Marshals Service (USMS) – Described as a major incident, the ransomware attack on the US Marshals Service, a federal law enforcement agency within the Department of Justice, compromised sensitive law enforcement data, including legal process returns, administrative data, and personally identifiable information (PII) of subjects associated with USMS investigations, third parties, and certain USMS employees.
  • City of Oregon (Royal Ransomware) – In May, the City of Oregon encountered a ransomware attack when county data was encrypted. Election and 911 dispatch remained under control, but all other government operations were impacted. Restoring systems were calculated at the cost of millions for software reloads and network reconstruction. Claimed by Royal Ransomware, the attackers demanded a ransom for data access, with the specific amount not disclosed by county officials.
  • Enzo Biochem – The New York-based biotech company suffered a ransomware attack in April compromising test data and personal information of approximately 2.5 million individuals. Names, test data, and 600,000 social security numbers were accessed. The attack on Enzo closely followed a separate attack on pharmacy giant, PharMerica, in May that saw the sensitive data of nearly 6 million people exposed.

So far, the FBI, CISA, and NSA, in partnership with other enforcement agencies, have issued the following joint cybersecurity advisories on the following ransomware in the past three quarters:

  • Royal – Cybercriminals have targeted US and international organizations with Royal ransomware since September 2022. After infiltrating networks, they disable antivirus and exfiltrate data before deploying ransomware. Ransom instructions come after encryption via a .onion URL, demanding varied amounts from $1M to $11M in Bitcoin. Royal ransomware has been observed targeting critical sectors like manufacturing, communications, healthcare, and education.
  • LockBit 3.0 – LockBit 3.0 (aka LockBit Black) operations follow a Ransomware-as-a-Service (RaaS) model and is a more evasive and modular continuation of its predecessors LockBit and LockBit 2.0. Affiliates that use LockBit 3.0 have been seen employing a variety of TTPs to attack a wide range of businesses in critical infrastructure sectors.
  • BianLianBianLian is a cybercriminal group conducting ransomware attacks on US and Australian critical infrastructure since June 2022. Known for ransomware development, deployment, and data extortion, they often exploit valid Remote Desktop Protocol (RDP) credentials, utilize open-source tools for reconnaissance, and exfiltrate data using FTP, Rclone, or Mega. In 2023, BianLian shifted from using a double-extortion model to exfiltration-based extortion, threatening to release data if ransom isn’t paid. They have targeted professional services and property development sectors in previous campaigns.
  • Cl0p – Since emerging in February 2019, CL0P ransomware has evolved and now operates as a Ransomware-as-a-Service (RaaS), initial access broker (IAB) selling access to compromised networks, and a large botnet operator targeting the financial sector. Initially known for double extortion, they changed tactics in 2021 to focus on data exfiltration. Cl0p has compromised over 3,000 U.S. and 8,000 global organizations.
  • QakBot – Also known as Qbot, Quackbot, Pinkslipbot, and TA750, Qakbot has caused numerous global malware infections since 2008. Initially a banking trojan, it evolved into a versatile botnet and malware variant used for reconnaissance, data exfiltration, lateral movement, and delivering ransomware. It targets various sectors, including financial and emergency services, commercial facilities, as well as the election infrastructure subsector, selling compromised device access to further affiliate threat actors’ goals.

3CX Supply Chain Attack

In a supply chain attack discovered in March dubbed “SmoothOperator”, actors associated with the North Korean regime compromised the infrastructure of the 3CX Private Automatic Branch Exchange (PABX) platform. The VoIP software development company is used by more than 600,000 globally and has over 12 million daily users including organizations across the automotive, food and beverage, hospitality, managed information technology service provider (MSP), and manufacturing industries.

The actors used this access to insert malicious code into the 3CX endpoint clients, which were downloaded as updates by victims using the software. The backdoored version applied stealthy steganography by encoding a payload stub in an .ico image file hosted on a public code repository hosted at github[.]com/IconStorages/images, which let the malware obtain the active C2 server address. Long-reaching software supply chain attacks like these demonstrate how threat actors work innovatively to exploit network access and distribute malware.

ESXi & Linux Ransomware

Ransomware groups such as AvosLocker, Black Basta, BlackMatter, Hello Kitty, LockBit, RansomEXX, REvil, and the now-defunct Hive have all continued to target VMware ESXi servers throughout 2023. Since 2021, organized ransomware groups have expanded targeting to include Linux systems thanks to the high likelihood of critical services or sensitive data. Disruption of Linux systems can lead to service outages, placing increased pressure on victims to pay a ransom.

These attacks often target the intersection of endpoint and cloud services, including on-premises Linux servers and hypervisors like VMWare ESXi. SentinelLabs’ research found that the availability of Babuk ransomware source code has made an outsized impact on the ESXi threat landscape. Many other Linux families are proliferating, including recent Linux additions by actors behind Abyss, Akira, Monti, and Trigona.

Identity-Based Attacks

Targeting the core of digital trust and authentication, identity-based attacks continue to rise in the cyber threat landscape. These attacks exploit weaknesses in user identities, credentials, and authentication processes and seek to gain unauthorized access to sensitive data and systems.

Enterprises around the world have exponentially grown the number of digital identities used in day-to-day operations, each one widening this attack surface. These identities are most vulnerable to threats such as phishing (and all of its variations), credential stuffing, identity theft, (fueled by social engineering), and attacks on single-sign-on (SSO) systems and multi-factor authentication (MFA) protocols.

Microsoft Exchange Online & Azure AD Vulnerability

This summer, details emerged on attacks against several US government agencies by an actor tracked as STORM-0558, a China-aligned espionage-motivated actor. The attacks abused several components to Microsoft permissions, including broad application scopes and a stolen signing key, which enabled the actors to mint session tokens to affected organizations’ Microsoft services. The original reports suggested only Exchange Online was impacted, though researchers found the flaw impacted other types of Azure Active Directory applications, including all applications that support individual (non-organization) account authentication.

BingBang

BingBang is an issue in Azure Active Directory (AD) application scopes where the default configuration may expose applications to undesired access. Researchers found that the default configuration for many Azure applications meant that any Azure AD user could access applications.

To remediate the issues outlined in BingBang, organizations using Azure AD authentication should verify what levels of access are delegated to applications, focusing first on sensitive and critical applications.

Cloud-Based Attacks

Cloud-based attacks continue to be a prominent and concerning trend, targeting vulnerabilities within cloud technologies and infrastructures. These attacks aim to compromise sensitive data housed by enterprise businesses, disrupt operations, or gain unauthorized access.

Cloud environments are vulnerable to threat actors working to exploit weak access controls to infiltrate cloud repositories. Distributed-Denial-of-Service (DDoS) attacks, capable of overwhelming cloud servers and causing widespread service disruptions, are also a major threat to modern clouds. Most notably in 2023, there has been a significant increase in cloud infostealers where financially motivated tools steal data from vulnerable or misconfigured cloud environments.

Cl0p Ransomware

In May 2023, the Cl0p (aka Clop) ransomware group made waves by exploiting a zero-day vulnerability in the MOVEit file transfer server application, which runs on Windows servers. The exploit chain delivers a Microsoft Internet Information Services (IIS) .aspx webshell to the server’s MOVEitTransferwwwroot directory, which steals files from the server as well as connected Azure Blob Storage. SentinelOne’s report provides queries that organizations can use to identify potential exploitation by the Cl0p group.

The attack demonstrated a significant shift where traditionally endpoint-focused ransomware actors wrote code specifically to target cloud storage services. The impact was massive, with more than 500 organizations and the data of 34 million individuals compromised, making it one of the biggest threat campaigns of 2023.

Cloud Infostealers

Throughout 2023, there has been a consistent rise in prevalence of cloud infostealers, which seek credentials from misconfigured or vulnerable cloud services. Some notable examples include:

  • AlienFox – AlienFox is a comprehensive tool built on Androxgh0st code snippets and sold through Telegram channels. Attackers run the modular, Python-based toolset remotely against exposed cloud services. AlienFox primarily targets credentials that attackers can abuse to conduct spam attacks, API keys, and secrets from popular services including AWS SES and Microsoft Office 365. A comprehensive breakdown of targeted services can be found in SentinelLabs’ full report.
  • Legion – An offshoot from the same code origin as AlienFox, Legion shares much of the same, spam-centric features. Like AlienFox, Legion is distributed to buyers who frequent Telegram channels.
  • TeamTNT Doppelgänger – The infamous TeamTNT seemingly returned in 2023 with a cloud stealer that targets credentials from a variety of popular cloud and development services. While attribution remains difficult with publicly available tools like these, the actor behind recent campaigns has demonstrated active development and adaptation to new attack surfaces, such as Google Cloud and Azure service account credentials. These recent campaigns use dynamic DNS hosting provider AnonDns for command-and-control (C2). Most of the tools are Bash or Shell scripts, though the group occasionally leverages binaries, such as a Golang executable (SHA1: 2ed9517159b89af2518cf65a93f3377dea737138) that enables propagation. The recent campaigns suggest the actor may have different motives. While the original TeamTNT prolifically delivered cryptocurrency mining malware with a minor focus on credential harvesting, the newer campaigns conduct more credential harvesting and environment enumeration than cryptomining.

Conclusion | How SentinelOne Measures Up to 2023 Cyber Attacks

Instability within the geopolitical and economic landscape have all led to significant challenges in securing global enterprises this year. What’s clear from the attacks listed in this blog post is that transnational and organized cyber criminals continue to develop their threat operations to execute high-impact attacks by extorting ransoms, disrupting governments and critical services, and exposing sensitive data. Continuing to share threat intelligence on past and ongoing threats allows security and enterprise leaders to better understand where their gaps and weaknesses are so as to prepare for similar attacks in the future.

Facing these challenges, business leaders this year are much more aware of their organizations’ cyber risks than they were in 2022 and, most importantly, more willing to address them. Leaders are focused on minimizing business disruption and reputational damage and devoting more resources than before to bolstering day-to-day cyber defenses. This encompasses the strengthening of controls around third-party access, establishing cyber risk management and accountability, as well as investing in advanced cybersecurity solutions.

SentinelOne is trusted by enterprises in every industry vertical, providing the protection they need to stay ahead of modern threat actors. In one platform, SentinelOne’s Singularity XDR unites endpoint, identity, and cloud protection into an efficient cybersecurity solution. Request a demo or contact us to learn more about how Singularity leverages the power of AI to detect and respond to today’s threats.

Threat Actor Interplay | Good Day’s Victim Portals and Their Ties to Cloak

Good Day ransomware, a variant within the ARCrypter family, was first observed in-the-wild in May of 2023. Between June and August of 2023, we observed an uptick in Good Day ransomware campaigns and a proliferation of new ransom note samples in public malware repositories. This new wave of Good Day attacks feature individual TOR-based victim portals for each target.

In this post, we expand on several unique Good Day ransom notes and victim portals and share our analysis of a sample associated with a URL leading to a known Cloak extortion site. By tying these recent Good Day campaigns to victims listed on the Cloak site, we can associate the Cloak data sales and leaks with Good Day through publicly viewable chats on the group’s TOR-based victim portals.

The discovery of such connections helps us chart the ever-dynamic relationships between existing and new vulnerabilities and threat actors. The more we can tie together these moving parts, the better chance that security practitioners have of reducing risk within their organizations.

Good Day Victim Portals Linked To Cloak Extortion Site

In July and August of 2023, we observed multiple new TOR-based URLs being staged for use by the Good Day group. Each portal is intended for a corresponding attack and specific victim. Similarly, each Good Day payload points to a specific victim portal.

Good Day (ARCrypter) victims are greeted with a ‘Good day’ welcome message when following the instructions provided in their ransom notes and opening the portal tied to the payload that encrypted their devices.

Standard Good Day victim portal
Standard Good Day victim portal

Some of the portals have been revealed in previous research by Cyble. However, analysis of a series of new ransom notes reveal that Good Day victims are also listed on the Cloak extortion blog site.

In particular, we found a series of ransom notes that all include the email address MikLYmAklY555[@]cock[.]li, which was also previously seen in AstraLocker campaigns.

Example of a Good Day ransom note seen in Aug. 2023
Example of a Good Day ransom note seen in Aug. 2023

At the time of writing, victim chats on the Good Day portals remain publicly accessible. Within these publicly accessible chats, we can see the threat actors communicating data to the victim.

In the case of sample d5fba798bb2a0aaca17f17fa14f2ff240be8d34d (associated ransom note: 7cf3b23cdb8c5fd74b094f76eb4ffc38e18bd58a) the threat actor communicates the URL of the blog where they intend to leak the victim’s data, which turns out to be the URL of the Cloak blog site. They also mention specific company names that can be found on the Cloak blog site.

The Cloak leak site first appeared in August of 2023 and currently lists 23 victims. Many of these victims are marked as “sold” and their respective data is not currently accessible on the surface.

Cloak victim blog
Cloak victim blog
Individual victim listing on Cloak blog
Individual victim listing on Cloak blog

Our analysis shows that Good Day ransomware victims are being threatened with having their data leaked or sold on the Cloak website. This intimidation tactic is amplified by the daunting list of “sold” victim companies that currently appear on the site. The threat actors leverage this and other intimidation tactics to coerce the victim into paying the ransom.

Regarding targeting, we also note that victims listed on the Cloak leak site indicate some amount of geographical focus. The main countries targeted are Germany, Italy, Taiwan, and France.

Good Day Ransomware Sample Analysis

In sample d5fba798bb2a0aaca17f17fa14f2ff240be8d34d, the ransom instructions point to a TOR-based victim portal at

47h4pwve4scndaneljfnxdhzoulgsyfzbgayyonbwztfz74gsdprz5qd[.]onion.

This sample masquerades as a Microsoft Windows Update executable (WindowsUpdate.exe). The ransomware is designed to be launched via a dropper or script, aligning it with past ARCrypter activity. The /START parameter is required to fully launch the ransomware.

Good Day masquerading as a legitimate Microsoft utility
Good Day masquerading as a legitimate Microsoft utility

The identifying strings that we expect to see in the ARCrypter family are also visible in this sample.

ARCrypt’s “tell” strings

This particular payload issues a User Access Control (UAC) prompt in order to elevate privileges when launched.

UAC Prompt from ransomware payload
UAC Prompt from ransomware payload

Once running, the malware will attempt to enumerate all local volumes to encrypt. This includes the use of wNetOpenEnum to identify available shares. In addition, the malware will enumerate all running processes.

Volume enumeration in Good Day
Volume enumeration in Good Day

The ransomware attempts to remove volume shadow copies (VSS) using the following command:

vssadmin.exe delete shadows /all /quiet
Volume Shadow Copy (VSS) Removal in Good Day
Volume Shadow Copy (VSS) Removal in Good Day

Affected files are renamed with the .crYptA or .crYptB extensions post-encryption. This pattern can extend up to .crYptE following the alphabet in series with the final letter in the extension.

Encrypted files with .crYptA extension

The Good Day ransomware then delays execution of the payload via the following hidden command:

¬/c TIMEOUT /T 2>NUL&START /b "" cmd /c DEL "C:Windowsexplorer.exe" &DEL "WindowsUpdate.exe.exe" &EXIT
Storyline™ view of calls to timeout.exe (delayed execution/evasion)
Storyline™ view of calls to timeout.exe (delayed execution/evasion)

The ransomware also attempts to determine whether it is running in a specific debugger. The search list includes S-Ice.exe, ImmunityDebugger.exe, x64dbg.exe and others.

Good Day debugger search list
Good Day debugger search list

The malware contains a hardcoded list of folders and files that are to be excluded from encryption.

Good Day Exclusions list
Good Day Exclusions list

SentinelOne Protects Against Good Day (ARCrypter) Ransomware

The SentinelOne Singularity™ Endpoint platform detects and prevents malicious behaviors and artifacts associated with Good Day/ARCrypter ransomware.

Conclusion

Tracking the inputs and outputs of extortion groups is a significant part of the puzzle as we continue to research the growing web of threat actors. It always helps to be able to tie pieces together where they are not directly apparent.

Observing the URLs found in ransom notes and the existing structure of the victim blog sites, we are able to firmly establish the nature of the tie between Good Day and the Cloak leak site. The latest payloads for Good Day have yet to build on their ARCrypter roots, but we will continue to monitor this group and their payloads.

To learn about how SentinelOne can help protect the devices in your fleet from ransomware and other threats, contact us or request a free demo.

Indicators of Compromise

Payload
d5fba798bb2a0aaca17f17fa14f2ff240be8d34d

Ransom Notes
7cf3b23cdb8c5fd74b094f76eb4ffc38e18bd58a
7ef712604fca6ad5a368745a015354aba74f5f61
a3ff2d575adc8edb088706e1de1a18a2d789cd73
c374252e4cff08e3abcda06503998cd3d3ef8322

URLs

cloak7jpvcb73rtx2ff7kaw2kholu7bdiivxpzbhlny4ybz75dpxckqd[.]onion
dcpuyivlbzx56hqwsvey33bxobxw3timjgljjy3index6qvdls5bjoad[.]onion
wwwieqvblhnel7wsb6jpxeen3dbmsqyozj2gzl2oyn6swrkq27jtusqd[.]onion
47h4pwve4scndaneljfnxdhzoulgsyfzbgayyonbwztfz74gsdprz5qd[.]onion
zxzs677rphmjznqgqzlsmjtqwqlydq47rwjesrt4dkkh6cc2ftlfhuqd[.]onion

U.S. Hacks QakBot, Quietly Removes Botnet Infections

The U.S. government today announced a coordinated crackdown against QakBot, a complex malware family used by multiple cybercrime groups to lay the groundwork for ransomware infections. The international law enforcement operation involved seizing control over the botnet’s online infrastructure, and quietly removing the Qakbot malware from tens of thousands of infected Microsoft Windows computers.

Dutch authorities inside a data center with servers tied to the botnet. Image: Dutch National Police.

In an international operation announced today dubbed “Duck Hunt,” the U.S. Department of Justice (DOJ) and Federal Bureau of Investigation (FBI) said they obtained court orders to remove Qakbot from infected devices, and to seize servers used to control the botnet.

“This is the most significant technological and financial operation ever led by the Department of Justice against a botnet,” said Martin Estrada, the U.S. attorney for the Southern District of California, at a press conference this morning in Los Angeles.

Estrada said Qakbot has been implicated in 40 different ransomware attacks over the past 18 months, intrusions that collectively cost victims more than $58 million in losses.

Emerging in 2007 as a banking trojan, QakBot (a.k.a. Qbot and Pinkslipbot) has morphed into an advanced malware strain now used by multiple cybercriminal groups to prepare newly compromised networks for ransomware infestations. QakBot is most commonly delivered via email phishing lures disguised as something legitimate and time-sensitive, such as invoices or work orders.

Don Alway, assistant director in charge of the FBI’s Los Angeles field office, said federal investigators gained access to an online panel that allowed cybercrooks to monitor and control the actions of the botnet. From there, investigators obtained court-ordered approval to instruct all infected systems to uninstall Qakbot and to disconnect themselves from the botnet, Alway said.

The DOJ says their access to the botnet’s control panel revealed that Qakbot had been used to infect more than 700,000 machines in the past year alone, including 200,000 systems in the United States.

Working with law enforcement partners in France, Germany, Latvia, the Netherlands, Romania and the United Kingdom, the DOJ said it was able to seize more than 50 Internet servers tied to the malware network, and nearly $9 million in ill-gotten cryptocurrency from QakBot’s cybercriminal overlords. The DOJ declined to say whether any suspects were questioned or arrested in connection with Qakbot, citing an ongoing investigation.

According to recent figures from the managed security firm Reliaquest, QakBot is by far the most prevalent malware “loader” — malicious software used to secure access to a hacked network and help drop additional malware payloads. Reliaquest says QakBot infections accounted for nearly one-third of all loaders observed in the wild during the first six months of this year.

Qakbot/Qbot was once again the top malware loader observed in the wild in the first six months of 2023. Source: Reliaquest.com.

Researchers at AT&T Alien Labs say the crooks responsible for maintaining the QakBot botnet have rented their creation to various cybercrime groups over the years. More recently, however, QakBot has been closely associated with ransomware attacks from Black Basta, a prolific Russian-language criminal group that was thought to have spun off from the Conti ransomware gang in early 2022.

Today’s operation is not the first time the U.S. government has used court orders to remotely disinfect systems compromised with malware. In April 2022, the DOJ quietly removed malware from computers around the world infected by the “Snake” malware, an even older malware family that has been tied to the GRU, an intelligence arm of the Russian military.

Documents published by the DOJ in support of today’s takedown state that beginning on Aug. 25, 2023, law enforcement gained access to the Qakbot botnet, redirected botnet traffic to and through servers controlled by law enforcement, and instructed Qakbot-infected computers to download a Qakbot Uninstall file that uninstalled Qakbot malware from the infected computer.

“The Qakbot Uninstall file did not remediate other malware that was already installed on infected computers,” the government explained. “Instead, it was designed to prevent additional Qakbot malware from being installed on the infected computer by untethering the victim computer from the Qakbot botnet.”

The DOJ said it also recovered more than 6.5 million stolen passwords and other credentials, and that it has shared this information with two websites that let users check to see if their credentials were exposed: Have I Been Pwned, and a “Check Your Hack” website erected by the Dutch National Police.

Further reading:

The DOJ’s application for a search warrant application tied to Qakbot uninstall file (PDF)
The search warrant application connected to QakBot server infrastructure in the United States (PDF)
The government’s application for a warrant to seize virtual currency from the QakBot operators (PDF)
A technical breakdown from SecureWorks

Public Sector Cybersecurity | Why State & Local Governments Are at Risk

State and local governments have increasingly fallen prey to cybercriminals seeking to exploit often outdated technology systems and limited cybersecurity resources. Their vital role in delivering essential public services, coupled with the vast amounts of sensitive citizen data they store, makes them attractive targets. Attacks on government institutions not only disrupt crucial services but also compromise the personal information of countless individuals.

As nation-states and cybercriminals increasingly target state and local governments, the need for both practical cybersecurity strategies and collaborative federal and international-level intervention is clear.

This post dives into the driving factors behind the targeting of this sector at state and local-levels, the consequences they pose, and what government entities can do to safeguard themselves from cyber threat actors.

Examining the Risks | Why State & Local Governments Are a Target

Too frequently burdened by limited security budgets, aging technology, and small IT departments, state and local governments have emerged as prime targets for cyberattacks.

From social security numbers to tax information and voting records, state and local entities operate as the storehouses for all sensitive citizen data within their jurisdiction. Since they provide such a wide array of public services, including healthcare, education, transportation, and public safety, they are an essential link between individual citizens and critical infrastructure of the private sector.

To complicate matters, state and local governments often rely on outdated, legacy technology and systems that are often susceptible to exploits of known vulnerabilities. With budget constraints and bureaucratic challenges, the lower branches of government face challenges in managing core cybersecurity tasks such as timely updates and patches. It is also rare for local entities to have a team of cybersecurity specialists managing their systems – small, in-house professionals are tasked with all IT matters. Cyber attackers often see these institutions as soft targets with weaker defenses compared to organizations within the private sector.

Already strapped by a lack of funding and cybersecurity expertise, state and local governments further contend with massive volumes of sensitive data that are incredibly appealing to cyber criminals. Personal information, financial records, and even election data can be used for identity theft, fraud, and espionage.

Disrupting their operations can cause widespread chaos and stolen data of this nature is considered a hot commodity across the dark web. Attacks on government entities not only compromise individual citizens but can also be exploited for larger-scale campaigns, influencing political and economic outcomes in more extensive, future attacks.

The Challenge of Ransomware | How State & Local Governments Are Impacted

Ransomware has been around for three decades, but recent years have changed the public’s perception of how much a successful attack can affect their day-to-day lives. Prominent examples such as the attacks on Colonial Pipeline, JBS Foods, and more recent ones like the disruption of Dallas’s 911 computer system, water systems, and court services put a magnifying glass on just how wide-spread the aftermath can be for citizens. Other than disrupting daily operations, assaults on local government entities can amass recovery expenses reaching millions, regardless of whether  ransoms are paid or not.

A recent study found that ransomware attacks in both state and local-level governing bodies have increased again from 58% in 2022 to 69% in 2023. These numbers top the global cross-sector trend that tracks ransomware attacks at an average of 66%. Now at its highest point in three years, more than three quarters of all ransomware attacks are focused on the lower branches of government with the end goal being data encryption and theft by threat actors.

Taking a closer look, the stats show that the leading causes of these ransomware attacks stem from exploited vulnerabilities (38%), compromised credentials (30%), and business email compromise (BEC) at 25%.

Other Cyber Risks Faced By The Public Sector

Phishing Attacks

Like many other organizations, state and local governments face the daily onslaught of phishing attacks. Cybercriminals craft malicious emails and leverage victims’’ trust in official-like communications. Given the decentralized nature of government structures, security awareness training is typically inconsistent across various entities, making it easier for threat actors to trick privileged users into revealing sensitive information or launching malware.

Business Email Compromise (BEC)

State and local governments’ extensive networks and financial transactions present lucrative opportunities for threat actors running business email compromise (BEC) schemes. Cybercriminals impersonate officials to manipulate employees into transferring funds or sensitive information. The high level of trust among colleagues can make it challenging to detect fraudulent requests, highlighting the need for robust authentication and communication protocols.

Known Vulnerabilities In Unpatched Software & Outdated Code

Limited budgets and bureaucratic red tape often hinder the process for patch management in state and local governments. This results in unpatched and outdated code, creating a fertile ground for cyber vulnerabilities. Attackers exploit known weaknesses to breach networks and compromise data, taking advantage of the interconnected nature of government operations to reach more associated networks.

Building A Stronger Cybersecurity Posture In The Public Sector

For municipal-level governments, constrained financial resources frequently dictate limits on their ability to maintain their cyber defenses. With multiple vendors offering specialist tools to solve specific problems, a limited budget can soon become exhausted as inexperienced teams try to manage both technical debt and the rise in adversary tradecraft.

The public sector can take a leaf out of the private sector’s book to help manage the cybersecurity budget, choosing solutions that both allow integration of existing tools and which offer a platform-approach to securing the entire organization. Alongside delivering more ‘bang for your buck’, a consolidated approach reduces pressure on the IT or security teams as there are fewer tools to learn and administer.

At the same time, leaders in state and government institutions responsible for allocating budgets are now being encouraged to follow the Biden-Harris administration’s lead in prioritizing cybersecurity as an essential service that must be delivered. The cost of failing to do so far outweighs the cost of consolidating multiple tools into a single platform.

It is also important to improve cyber hygiene to build up a stronger security posture. This can be achieved through a combination of up-to-date training, regular review of a security policy, and the use of a shared responsibility model that outlines the importance of security for all roles.

Leaders of state and local governments can action the following to improve their defenses:

  • Create a Security Policy – Cybersecurity needs to be viewed as a shared responsibility rather than being relegated to IT teams. A trickle-down policy communicated by leaders can help employees adopt a digital security mindset.
  • Implement a Patch Management Schedule – Ensure the prompt update of all systems, applications, and platforms to their latest versions on a regular basis. Follow CISA guidelines on known exploited vulnerabilities and leverage existing security technology to ease the pain.
  • Understand the importance of Identity Security – user accounts can provide points of entry for adversaries, and organizations need to think beyond traditional endpoint and network security to include protection of user identities. As a minimum this might include Identity and Access Management but more comprehensive security should include Identity Threat Detection and Response (ITDR).
  • Foster Cybersecurity Training Programs – A well-rounded cybersecurity training program equips employees with the knowledge and skills to identify and mitigate cyber threats such as spoofing, social engineering, malicious links, and more.
  • Design a Cyber Disaster Recovery Plan – Cyber disaster recovery plans ensure quick and effective responses to cyber incidents and minimized downtime. Begin by conducting a thorough risk assessment, identifying critical systems and data. Then, develop a comprehensive plan that outlines roles, responsibilities, communication protocols, and recovery procedures.
  • Establish Routine Data Backups – Having consistent backups helps entities recover more efficiently in the case of a cyber incident. Identify critical datasets, systems, and applications that demand regular backups. Then, select a secure, off-site storage solution and establish a well-defined backup schedule that accommodates any changes and updates to data.

Conclusion | Ongoing Support To Protect State & Local Governments

In 2022, the Biden-Harris Administration committed to directing $1 billion in funding toward state and local cybersecurity initiatives over the next four years. The grant program aims to bolster the establishment of critical governance frameworks that will focus on pinpointing key vulnerabilities, determining mitigation strategies, and addressing cyber workforce recruitment needs, including the placement of qualified individuals like Chief Information Security Officers (CISOs), Chief Information Officers (CIOs), and Chief Technology Officers (CTOs).

This program is the latest example of a unified strategy between the Department of Homeland Security (DHS), the Federal Emergency Management Agency (FEMA), and CISA to provide the resources and cutting-edge technology that state and local governments can deploy to build a proactive defense against evolving threats.

Autonomous detection and response mechanisms play a vital role in this long-term program. Using the power of artificial intelligence and machine learning, advanced solutions like eXtended Detection and Response (XDR) can rapidly identify anomalies, unusual activities, and potential threats across vast networks. XDR solutions also give governments unrestricted visibility into their various systems, allowing for real-time responses to security events before they can lead to data encryption and critical infrastructure downtime.

Learn how SentinelOne’s leading Singularity platform can help state and local governments build cyber resilience. Contact us or book a demo today.

The Good, the Bad and the Ugly in Cybersecurity – Week 34

The Good | Lapsus$ Teen Members Found Responsible for High-Profile Cyber Crime Spree

This week, a London jury found 18 year-old Arion Kurtaj of Oxford, UK to be responsible for a series of cyberattacks against major firms, including Uber, Nvidia, and Rockstar Games. Additional charges include computer intrusion, fraud, and the demand for millions of US dollars in ransom backed by the threat of leaking sensitive information.

Kurtaj holds several online aliases, including teapotuberhacker, White, and Breachbase and is estimated to have made over 300 BTC from various illicit activities. Much of these ill-gotten profits, however, were reportedly lost to rival hackers and gambling. Alongside Kurtaj, a second teenager has been convicted for their association with Lapsus$ and breaching several companies.

Described by the court as a loose and unorganized collective of young “digital bandits”, Lapsus$ is thought to have members operating within the UK and possibly Brazil. Over the years, the group has targeted multiple high-profile organizations such as Microsoft, Okta, Cisco, T-Mobile, and Samsung. Since their emergence in December of 2021, members have been observed attacking government, technology, telecom, media, retail, and healthcare sectors for both notoriety and financial gain.

According to reports, Kurtaj and the unnamed 17 year-old first met online and committed cyber trespassing, sneaking into cellphone network operator servers. This soon escalated to ransoms and the use of swiped data to break into several cryptocurrency wallets. Prosecutors have noted the groups’ juvenile desire to defy and taunt victims, often leaving offensive messages after infiltrating systems. Kurtaj, who is autistic and deemed not fit to stand trial, did not appear in court to give evidence. Jurors were asked to determine whether the teen committed the alleged acts rather than to determine if he did so with criminal intent. These cases have simultaneously highlighted the vulnerability of teenage hackers and the need to enhance cyber defenses across the web.

The Bad | macOS Malware “XLoader” Returns Disguised As Productivity App

A new variant of the macOS malware known as “XLoader” has been discovered, now masquerading as an office productivity app called “OfficeNote”. In findings published this week, SentinelOne found that this version of XLoader is hidden within an Apple disk image named OfficeNote.dmg and signed with the developer signature “MAIT JAKHU (54YDV8NU9C).” Initially identified in 2020, XLoader functions as an information stealer and keylogger, operating under the Malware-as-a-Service (MaaS) model and succeeding the infamous Formbook malware.

XLoader was first seen targeting macOS in 2021, when it was distributed by attackers as a Java program. The new XLoader variant uses the C and Objective C programming languages to avoid the limitations caused by the requirement for Java Runtime Environment, which isn’t installed by default on Mac devices. SentinelOne noted several instances of this artifact on VirusTotal throughout July 2023, suggesting a widespread campaign.

XLoader submissions to VirusTotal July 2023
XLoader submissions to VirusTotal July 2023

The malware pretends to be an office application named OfficeNote but in reality, installs a Launch Agent in the background for persistent execution. Once active, XLoader captures clipboard data and information stored in directories linked to popular web browsers that could be exploited or sold to other threat actors. To evade analysis, XLoader employs evasion techniques against both manual and automated analysis. It also incorporates sleep commands to delay execution in an attempt to avoid detection.

SentinelOne concluded that XLoader remains a threat to macOS users and businesses, emphasizing the need for continued vigilance against such cyber threats. Customers of SentinelOne are automatically protected from this new variant of XLoader.

The Ugly | US & UK Critical Infrastructure Targeted By Lazarus Group’s New RAT

DPRK-backed Lazarus Group has exploited a patched critical security vulnerability in Zoho ManageEngine ServiceDesk Plus with the purpose of distributing a remote access trojan (RAT) named QuiteRAT. The targets of these attacks include internet backbone infrastructure and healthcare organizations in Europe and the US, according to reports by security researchers this week. Additionally, in-depth analysis of the group’s attack infrastructure uncovered a new threat called CollectionRAT.

QuiteRAT, a successor to MagicRAT and TigerRAT, exhibits similar capabilities but with a significantly smaller file size. The malware is built on the Qt framework, which adds complexity to its code and makes analysis more challenging for cyber defenders. The attacks, observed in early 2023, involved exploiting CVE-2022-47966, a vulnerability that emerged just five days before the first attack in a proof-of-concept (PoC) to deploy QuiteRAT from a malicious URL. Unlike MagicRAT, QuiteRAT lacks a built-in persistence mechanism and requires the server to issue commands for ongoing activity on compromised hosts.

The Lazarus Group is also observed incorporating open-source tools and frameworks for initial access in their attacks as opposed to using them solely post-compromise. The reports indicate the use of the open-source DeimosC2 framework and CollectionRAT for various malicious activities, such as gathering metadata, executing commands, managing files, and delivering payloads.

Operational links between the various malware implants (Source: Talos)

Despite the well-documented nature of Lazarus’s tactics, researchers noted that the groups’ continued use of the same infrastructure shows the threat actor has confidence in the continued success of their operations.

Kroll Employee SIM-Swapped for Crypto Investor Data

Security consulting giant Kroll disclosed today that a SIM-swapping attack against one of its employees led to the theft of user information for multiple cryptocurrency platforms that are relying on Kroll services in their ongoing bankruptcy proceedings. And there are indications that fraudsters may already be exploiting the stolen data in phishing attacks.

Cryptocurrency lender BlockFi and the now-collapsed crypto trading platform FTX each disclosed data breaches this week thanks to a recent SIM-swapping attack targeting an employee of Kroll — the company handling both firms’ bankruptcy restructuring.

In a statement released today, New York City-based Kroll said it was informed that on Aug. 19, 2023, someone targeted a T-Mobile phone number belonging to a Kroll employee “in a highly sophisticated ‘SIM swapping’ attack.”

“Specifically, T-Mobile, without any authority from or contact with Kroll or its employees, transferred that employee’s phone number to the threat actor’s phone at their request,” the statement continues. “As a result, it appears the threat actor gained access to certain files containing personal information of bankruptcy claimants in the matters of BlockFi, FTX and Genesis.”

T-Mobile has not yet responded to requests for comment.

Countless websites and online services use SMS text messages for both password resets and multi-factor authentication. This means that stealing someone’s phone number often can let cybercriminals hijack the target’s entire digital life in short order — including access to any financial, email and social media accounts tied to that phone number.

SIM-swapping groups will often call employees on their mobile devices, pretend to be someone from the company’s IT department, and then try to get the employee to visit a phishing website that mimics the company’s login page.

Multiple SIM-swapping gangs have had great success using this method to target T-Mobile employees for the purposes of reselling a cybercrime service that can be hired to divert any T-Mobile user’s text messages and phone calls to another device.

In February 2023, KrebsOnSecurity chronicled SIM-swapping attacks claimed by these groups against T-Mobile employees in more than 100 separate incidents in the second half of 2022. The average cost to SIM swap any T-Mobile phone number was approximately $1,500.

The unfortunate result of the SIM-swap against the Kroll employee is that people who had financial ties to BlockFi, FTX, or Genesis now face increased risk of becoming targets of SIM-swapping and phishing attacks themselves.

And there is some indication this is already happening. Multiple readers who said they got breach notices from Kroll today also shared phishing emails they received this morning that spoofed FTX and claimed, “You have been identified as an eligible client to begin withdrawing digital assets from your FTX account.”

A phishing message targeting FTX users that went out en masse today.

A major portion of Kroll’s business comes from helping organizations manage cyber risk. Kroll is often called in to investigate data breaches, and it also sells identity protection services to companies that recently experienced a breach and are grasping at ways to demonstrate that they doing something to protect their customers from further harm.

Kroll did not respond to questions. But it’s a good bet that BlockFi, FTX and Genesis customers will soon enjoy yet another offering of free credit monitoring as a result of the T-Mobile SIM swap.

Kroll’s website says it employs “elite cyber risk leaders uniquely positioned to deliver end-to-end cyber security services worldwide.” Apparently, these elite cyber risk leaders did not consider the increased attack surface presented by their employees using T-Mobile for wireless service.

The SIM-swapping attack against Kroll is a timely reminder that you should do whatever you can to minimize your reliance on mobile phone companies for your security. For example, many online services require you to provide a phone number upon registering an account, but that number can often be removed from your profile afterwards.

Why do I suggest this? Many online services allow users to reset their passwords just by clicking a link sent via SMS, and this unfortunately widespread practice has turned mobile phone numbers into de facto identity documents. Which means losing control over your phone number thanks to an unauthorized SIM swap or mobile number port-out, divorce, job termination or financial crisis can be devastating.

If you haven’t done so lately, take a moment to inventory your most important online accounts, and see how many of them can still have their password reset by receiving an SMS at the phone number on file. This may require stepping through the website’s account recovery or lost password flow.

If the account that stores your mobile phone number does not allow you to delete your number, check to see whether there is an option to disallow SMS or phone calls for authentication and account recovery. If more secure options are available, such as a security key or a one-time code from a mobile authentication app, please take advantage of those instead. The website 2fa.directory is a good starting point for this analysis.

Now, you might think that the mobile providers would share some culpability when a customer suffers a financial loss because a mobile store employee got tricked into transferring that customer’s phone number to criminals. But earlier this year, a California judge dismissed a lawsuit against AT&T that stemmed from a 2017 SIM-swapping attack which netted the thieves more than $24 million in cryptocurrency.