Cyber Security Threats: DR Paul Twomey

Cyber Security Threats
Dr Paul Twomey
The Lowy Institute for International Policy
8 September 2010
Property of Argo Pacific Pty Ltd 0

What is the Internet?
• Three layers
• All have vulnerabilities

The Transit Layer

The Application Layer

And while we have been going from this…

Business has been aggregating data and risk at an
unprecedented rate…
5. Fully Integrated
information based
Business
4. Technology Integration
Degree of Data Digitization
3. Transactional systems
2. Storing Information
1.Messaging
Spectrum of Risk
And our physical infrastructure has become
intertwined and reliant on our cyber infrastructure
Source: DHS, "Securing the Nation’s Critical Cyber Infrastructure
Property of Argo Pacific Pty Ltd

We have developed the myth that technology can be an
effective fortress – we can have security
Traditional focus on:

• Better Firewalls
• Boundary Intrusion Detection
• Critical Offsite Capacity
• Compliance Certification
False myths:
• IT staff = security staff
• Compliance failure is the main
source of risk
• Being compliant = being safe

But this concept of security is false – the Internet is
fundamentally open
Facts:
• We don’t know what’s on our own nets
• What’s on our nets is bad, and existing
practices aren’t finding everything
• Threat is in the “interior”
• Threat is faster than the response
• “Boundaries” are irrelevant
• We don’t know what is on our partner’s
nets nor on the points of intersection
• Compromises occur despite defenses Global Internet
• Depending on the motivation behind
any particular threat, it can be a
nuisance, costly or mission threatening
The critical capability it do develop real time response

and resiliency
Some types of Cyber Threats
Type Motivation Target Method
Information Military or political Critical Attack, corrupt,
Warfare dominance infrastructure, exploit, deny,
political and conjoint with
military assets physical attack
Cyber Espionage Gain of intellectual Governments, Advanced
Property and companies, Persistent Threats
Secrets individuals
Cyber Crime Economic gain Individuals, Fraud, ID theft,
companies, extortion, Attack,
governments Exploit
Cracking Ego, personal Individuals, Attack, Exploit
enmity companies,
governments
Hactivism Political change Governments, Attack, defacing
Companeis
Cyber Terror Political change Innocent victims, Marketing,
recruiting command and
control, computer
Source:
Property analysis,
of Argo DrLtd
Pacific Pty Irv Lachov based voilence 11
Cyber crime and cyber espionage are having real
impacts
• Estimated $1 Trillion of intellectual property stolen each year (Gartner & McAfee, Jan 20
09)
• Cybercrime up 53% in 2008 (McAfee)
• Topped $20 Billion at financial institutions
• Reported cyber attacks on U.S. government computer networks climbed 40% in 2008
• Sensitive records of 45,000 FAA workers breached (Feb 09)
• Chinese stole design secrets of all U.S. nuclear weapons (Michelle Van Cleave)
• U.S. nuclear weapons lab is missing 69 computers (Feb 09)
• Cost to repair average 2008 data breach = $6.6 Million
Source: Report of the CSIS Commission on Cybersecurity for the 44th Presidency

Critical infrastructure and cyber attack
• Infrastructure vulnerable to cyber

attack
– Power grid
– Water
– Communications
– Banking, etc.
• Little barrier to skilled attackers
• Software protections not current with
today’s threats
• Coordinated physical and
cyber attack strategies could cripple
critical infrastructure
Source: Brenton Greene, Northrop Grumman

Corporate Brands Under Attack
• U.S. companies have lost billions

in intellectual property to cyber
• A third of companies surveyed said
a major security breach could put
them out of business
• Terrorists finance their operations
• Heartland Payment Systems (HPY)

suffered an intrusion that
compromised at least 130 million
consumer cards
Source: Brenton Greene, Northrop Grumman

The total cost of a data breach continues to rise.
Direct and Indirect data breach costs
US$ costs per record
Direct Cost: e.g. engaging forensic experts, outsourced hotline support, free credit
monitoring subscriptions, and discounts for future products and services.
Indirect Costs: e.g. in-house investigations and communication, and the value of customer
loss resulting from churn or diminished acquisition rates.
Source: The Ponemon Institute 15
The biggest cost growth is the churn of customers
affected or influenced by the breach
Component of Cost of data breach on a per victim basis
US$
• Over the past four years lost business costs, created by abnormal churn or turnover of
customers, grew by more than $64 on a per victim basis, or a 38% overall percentage
increase.
• Organizations in highly trusted industries such as banking, pharmaceuticals and
healthcare are more likely to experience high abnormal churn rates following a data
breach compared to retailers and companies with less direct consumer contact.

This is an international problem

Cyber risks are an increasing threat to sources of
enterprise capability and brand competitiveness
Extortion • Phishing and pharming driving increased Now

customer costs, especially for financial
services sector
• DDOS extortion attacks
Loss of intellectual • National security information/export controlled Now

property/data information
• Sensitive competitive data
• Sensitive personal/customer data
Potential for disruption • eBusiness and internal administration Emerging

• As part of cyber conflict • Connections with partners
(i.e. Estonia) • Ability to operate and deliver core services
• As target of cyber protest
(i.e. anti-globalization)
Potential accountability for • Reputational hits; legal accountability Now

misuse (i.e. botnets)
Potential for data corruption • Impact operations or customers through data Future
Terrorism • DDOS and poisoning attacks Emerging

• Focused attacks coordinated with physical
attacks
Drivers: fear and impact
Attacks are increasingly easy to conduct
Email propagation of malicious code
Skill level needed by attackers

DDoS attacks
“Stealth”/advanced scanning techniques Increase in worms
Sophisticated command
Widespread attacks using NNTP to distribute attack and control
2008
Widespread attacks on DNS infrastructure
Executable code attacks (against browsers) Anti-forensic techniques
Automated widespread attacks Home users targeted

GUI intruder tools
Attack sophistication
Distributed attack tools
Hijacking sessions
Increase in wide-scale
Trojan horse distribution
Internet social Widespread
engineering attacks denial-of-service
attacks Windows-based
1990 remote controllable
Techniques to analyze
code for vulnerabilities Trojans (Back Orifice)
Automated probes/scans
Packet spoofing without source code
Source: SE/CERT CC

Recent Incidents: Rise of the Professionals

• F-35: WSJ article: “Computer spies have broken into the

Pentagon's $300 billion Joint Strike Fighter project -- the Defense
Department's costliest weapons program ever -- according to
current and former government officials familiar with the attacks” ...
China suspected
• Google: Internet search company reveals existence of large-scale
computer intrusions, apparently coming from China with some
support from the state
• US Electrical System: WSJ article: “Cyberspies have penetrated
the U.S. electrical grid and left behind software programs that could
be used to disrupt the system” … Russia and China suspected
• Optus: In April 2010, customers of Optus, its partner internet
service providers, and a number of major corporate customers
suffered traffic degradation as a result of a distributed denial of
service attack sourced from China and aimed at a large,
unnamed Optus financial services customer.

• Estonia: As part of unrest and pro-Russian riots in Tallinn, the

Internet-embracing nation undergoes massive online attacks from
ethnic Russians
• Zeus Trojan: Zeus Trojan, capable of defeating the one-time
password systems used in the finance sector, targets commercial
bank accounts and has gained control of more than 3 million
computers, just in the US
• Mariposa: "botnet" of infected computers included PCs inside more
than half of the Fortune 1,000 companies and more than 40 major
banks

Mass-scale hacking
• It's ROI focused..

• It's not personal. Automated attacks against mass targets, not specific individuals.
• It's multilayer. Each party involved in the hacking process has a unique role and uses a
different financial model.
• It's automated. Botnets exploit vulnerabilities and extract valuable data, conduct brute
force password attacks, disseminate spam, distribute malware and manipulate search
engine results.
• Common attack types include:
• Data theft or SQL injections.
• Business logic attacks.
• Denial of service attacks.
Source: Amichai Shulman

Advanced Persistent Threats
• It's very personal. The attacking party carefully selects targets based on political,
commercial and security interests. Social engineering is often employed.
• It's persistent. If the target shows resistance, the attacker will not leave, but rather
change strategy and deploy a new type of attack against the same target.
• Control focused. APTs are focused on gaining control of crucial infrastructure, such as
power grids and communication systems. APTs also target data comprised of intellectual
property and sensitive national security information.
• It's automated, but on a small scale. Automation is used to enhance the power of an
attack against a single target, not to launch broader multi-target attacks.
• It's one layer. One party owns and controls all hacking roles and responsibilities.
Source: Amichai Shulman

Cyber warfare?: Estonia cyber attacks
• Started on April 27, 2007 and this attacks last about

3 weeks.
• Series of attacks targeting government portals,
parliament portal, banks, ministries, newspapers and
broadcasters of Estonia.
• Estonians claimed this attacks as a political attack
or revenge from Russians for the moving of a WWII
memorial.
Source: Presentation to Africa Asia Forum on Network Research & Engineering workshop, Dakar, Senegal, 23 November 2009

How the attacks took place
• Weeks of cyber attacks followed, targeting government and banks,

ministries, newspapers and broadcasters Web sites of Estonia.
• Some attacks took the form of distributed denial of service (DDoS)

attacks (using ping floods to expensive rentals of botnets).
• 128 unique DDOS attacks (115 ICMP floods, 4 TCP SYN floods and
9 generic traffic floods).
• Used hundreds or thousands of "zombie" computers and pelted

Estonian Web sites with thousands of requests a second, boosting
traffic far beyond normal levels.
• Attacker commanding other computers to bombard a web site with

requests for data, causing the site to stop working.

How the attack took place …
• The attack heavily affected infrastructures of all network:
 Routers damaged.
 Routing tables changed.
 DNS servers overloaded.
 Email servers mainframes failure, and etc.

Impact
• Inoperability of the following state and commercial bodies:

 The Estonian presidency and its parliament.
 Almost all of the country’s government ministries.
 Political parties.
 Three news organizations.
 Two biggest banks and communication’s firms.
 Governmental ISP.
 Telecom companies.

How did Estonia respond?
• Estonia's Computer Emergency Response Team (CERT) acted as a

coordinating unit, concentrating its efforts on protecting the most vital resources.
• Closing down the sites under attacked to foreign internet addresses and
keep the sites only accessible to domestic users.
• Cutting 99% of bogus traffic which was originated outside Estonia.
• Implemented an online "diversion" strategy that made attackers hack sites that
had already been destroyed.
• Implemented advanced filters to the traffic, then Cisco Guard was installed
to lower malicious traffic.

Response included much help from others
• Identification and further blockade of bots from root DNS servers.
• CERT persuaded ISPs around the world to blacklist attacking computers which
overwhelm Estonia’s bandwidth.
• Germany, Slovakia, Latvia, Lithuania, Italy and Spain supported and funded
CERT the hub in the Estonian capital Tallinn to protect the security.
• Block all .ru domain.
• The president gave up his own website and let them continue to attack it so
that they would not be able to destroying more critical things.

International impact
• The Estonian CERT analyze server logs and data to find out who is
behind the attacks.
• NATO assisted Estonia in combating the cyber attacks and has voted to
work with member governments to improve cyber security.
• NATO's new cyber-warfare center will be based in Tallinn.
• Estonia called in July 2008 for an international convention on combating
computer-based attacks.

So who can do this?
State Actors
Definition: Nation States who engage in one or more types of cyber operations
Russian Federation Kyrgyzstan

Ukraine Estonia
Georgia Ingushetia
Peoples Republic of Taiwan
China
Israel Iran
Palestinian National Myanmar (Burma)
Authority (Hamas)
U.S. Turkey
Pakistan Germany
Zimbabwe Australia
Source Jeffrey Carr, GreyLogic

State-Sponsored Actors
Definition: Non-state actors who are engaged by States to perform one or more
types of cyber operations.
Partial list of States known to or suspected of

sponsoring Actors
Russian Federation
Peoples Republic of China
Turkey
Iran
United States
Myanmar
Israel

Non-State Actors
Definition: Non-state actors who engage in cyber crime and/or patriotic hacking
(aka hacktivists)
Too numerous too list

War by proxy?
Kremlin Kids: We Launched the Estonian Cyber War
By Noah Shachtman
March 11, 2009 |
Wired.com
Like the online strikes against Georgia, the origins of the 2007 cyber
attacks on Estonia remain hazy. Everybody suspects the Russian
government was somehow behind the assaults; no one has been able
to prove it. At least so far. A pro-Kremlin youth group has taken
responsibility for the network attacks. And that group has a track record
of conducting operations on Moscow’s behalf.
Nashi ("Ours") is the "largest of a handful of youth movements created
by Mr. Putin’s Kremlin to fight for the hearts and minds of Russia’s
young people in schools, on the airwaves and, if necessary, on the
streets," according to the New York Times.
Yesterday, one of the group’s "commissars," Konstantin Goloskokov
(pictured), told the Financial Times that he and some associates had
launched the strikes. "I wouldn’t have called it a cyber attack; it was
cyber defense," he said. "We taught the Estonian regime the lesson that
if they act illegally, we will respond in an adequate way." He made
similar claims, in 2007.
If true, it would be only one in a long string of propaganda drives the
group has waged in support of the Kremlin. Not only has Nashi waged
intimidation campaigns against the British and Estonian ambassadors to
Moscow, and staged big pro-Putin protests. Not only has been it been
accused of launching denial-of-service attacks against unfriendly
newspapers. Last month, Nashi activist Anna Bukovskaya
acknowledged that the group was paid by Moscow to spy on other
youth movements. The project, for which she was paid about $1100 per
month, included obtaining "videos and photos to compromise the
opposition, data from their computers; and, as a separate track, the
dispatch of provocateurs," she told a Russian television channel.
The proliferation of capability into the hacker/criminal
world has enabled a blurring of actors and motivations
– a major challenge for any future international regime
for controlling national state cyber competition
Cyber
Warfare
Cyber Cyber
Espionage Crime

Strategic implications
• Nation-states lose some control over conflict
• Geopolitical analysis required

–Cyber conflict mirrors fighting on ground
• Attribution and the false flag

–Concept: People’sWar
• Is national security at risk?

–As with WMD, defense strategies unclear
–As with terrorism, success in media hype
Source: Cyberspace and the Changing Nature of Warfare

Kenneth Geers Nato Cooperative Cyber Defence Centre of
Excellence

The old rules collide with cyber reality
• Foreign Relations Law(U.S.): “It is universally recognized, as a corollary of state

sovereignty, that officials in one state may not exercise their functions in the territory of
another state without the latter's consent.”
Source: Cyberspace and the Changing Nature of Warfare

Kenneth Geers Nato Cooperative Cyber Defence Centre of
Excellence

Australian Federal government response since 2009
Defence Signals Directorate Attorney General’s Department

Reveal Their Secrets – Protect Our Own
Cyber Security Operations Centre (CSOC) ASIO CERT Australia

• DSD capability that serves all government •work with the private sector in
agencies. identifying critical infrastructure
• Provides government with a comprehensive and systems that are important to
understanding of cyber threats against Australia’s national interest,
Australian interests; based on an assessment of risk,
• coordinates operational responses to cyber and to provide these
events of national importance across organisations with information
government and critical infrastructure. and assistance to help them
•embedded representation from a number of protect their information and
other agencies involved in assessing the threat communication technology
to, and the protection of, Australian interests infrastructure from cyber threats
from sophisticated threat actors. and vulnerabilities.
•The CSOC will also assist CERT Australia
•Sector Progams:
•banking and finance,
•control systems
•telecommunications
Up to the early 1990s in Australia
• Government ran government networks. The government ran military networks. The
government owned Telecom Australia and OTC.
• To expect DSD and/or ASIO to play the primary protection role was quite valid.

But today
• Every business is connected to the Internet. Every business’s network is part of the
internet.
• The capacity to interact with each other is a key part of their risk environment. Telcos,
businesses, universities, and households are all connected in different ways.
• The government now owns a tiny minority of these networks.
• If there were negligence causing damage, who would be liable? In the 1970s, 80s and
even the early 1990s you could make a case that somehow or other the government
would end up being the defendant. Today it would be the companies.
• The big change for boards in Australia is that if somebody wants to bring a negligence
action for something that went bad on the network they are more likely to to be liable.
• Cyber crime and cyber espionage pose increasing risk to the

Cyber crime and cyber espionage pose increasing risk
to
• Operations
• Reputation
• Financial performance
• Competitive position in the market
• And managing risk is a Board responsibility

THANK YOU

Cyber Security Threats: DR Paul Twomey

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Cyber Security Threats

The Lowy Institute for International Policy

Property of Argo Pacific Pty Ltd 0

• All have vulnerabilities

Property of Argo Pacific Pty Ltd 1

Property of Argo Pacific Pty Ltd 2

Property of Argo Pacific Pty Ltd 4

Property of Argo Pacific Pty Ltd 5

Source: DHS, "Securing the Nation’s Critical Cyber Infrastructure

Property of Argo Pacific Pty Ltd

Traditional focus on:

Property of Argo Pacific Pty Ltd 9

The critical capability it do develop real time response

Property of Argo Pacific Pty Ltd 12

• Infrastructure vulnerable to cyber

Source: Brenton Greene, Northrop Grumman

Property of Argo Pacific Pty Ltd 13

• U.S. companies have lost billions

• Heartland Payment Systems (HPY)

Source: Brenton Greene, Northrop Grumman

Property of Argo Pacific Pty Ltd 14

Property of Argo Pacific Pty Ltd 16

Property of Argo Pacific Pty Ltd 17

Extortion • Phishing and pharming driving increased Now

Loss of intellectual • National security information/export controlled Now

Potential for disruption • eBusiness and internal administration Emerging

Potential accountability for • Reputational hits; legal accountability Now

Terrorism • DDOS and poisoning attacks Emerging

Email propagation of malicious code

Skill level needed by attackers

“Stealth”/advanced scanning techniques Increase in worms

Executable code attacks (against browsers) Anti-forensic techniques

Automated widespread attacks Home users targeted

Property of Argo Pacific Pty Ltd 19

Property of Argo Pacific Pty Ltd 20

• F-35: WSJ article: “Computer spies have broken into the

Property of Argo Pacific Pty Ltd 21

• Estonia: As part of unrest and pro-Russian riots in Tallinn, the

Property of Argo Pacific Pty Ltd 22

• It's ROI focused..

Source: Amichai Shulman

Property of Argo Pacific Pty Ltd 23

Source: Amichai Shulman

Property of Argo Pacific Pty Ltd 24

• Started on April 27, 2007 and this attacks last about

Property of Argo Pacific Pty Ltd

• Weeks of cyber attacks followed, targeting government and banks,

• Some attacks took the form of distributed denial of service (DDoS)

• Used hundreds or thousands of "zombie" computers and pelted

• Attacker commanding other computers to bombard a web site with

Property of Argo Pacific Pty Ltd

• The attack heavily affected infrastructures of all network:

 Routing tables changed.

 DNS servers overloaded.

 Email servers mainframes failure, and etc.

Property of Argo Pacific Pty Ltd

• Inoperability of the following state and commercial bodies:

Property of Argo Pacific Pty Ltd

• Estonia's Computer Emergency Response Team (CERT) acted as a

• Cutting 99% of bogus traffic which was originated outside Estonia.

Property of Argo Pacific Pty Ltd

• Identification and further blockade of bots from root DNS servers.