Threat actors were able to breach Blackbaud's systems and compromise sensitive data, largely because of the company's poor cybersecurity practices and lack of encrypted data, the AG said.

Source: SOPA Images Limited via Alamy Stock Photo

Blackbaud, a South Carolina-based software company, has been ordered by the California Attorney General's Office to pay $6.75 million to settle a ransomware attack that took place in May 2020.

The attack occurred due to poor security practices, the AG's office said.

After Blackbaud revealed that the threat actors compromised unencrypted Social Security numbers, bank account details, and login credentials, the company "then made misleading statements about the sufficiency of its data security efforts prior to the breach and about the extent of the breach to its nonprofit customers and the public," stated the Attorney General's press release. "These actions violated the Reasonable Data Security Law, Unfair Competition Law, and the False Advertising Law related to data security."

Private information from 13,000 nonprofits, universities, hospitals, and other organizations were compromised through Blackbaud, according to a government-led investigation, leading the company to pay a ransom of 24 bitcoins or $250,000.

The fine is part of a broader set of penalties. Blackbaud initially was fined $3 million in March 2023 before agreeing to a $49.5 million settlement with 49 states and Washington, DC. At the beginning of this year, however, the Federal Trade Commission ordered Blackbaud to also develop an information security program, as well as delete data that is no longer necessary for its services. 

The FTC argued that though the company paid the ransom demanded by the threat actors, it did not take additional steps to ensure that the data was deleted, nor did it step up its security practices, including implementing multifactor authentication, monitoring its network, and encrypting sensitive data, among other things. 

"Not only did Blackbaud fail to protect consumers' personal information, but they misled the public of the full impact of the data breach," stated Attorney General Bonta. "This is simply unacceptable. Today's settlement will ensure that Blackbaud prioritizes safeguarding consumers' personal information and enhances security measures to prevent future incidents."

**About the Author(s)**

Blackbaud Fined $6.75M After 2020 Ransomware Attack

"ClearFake" and "ClickFix" attackers are tricking people into cutting and pasting malicious PowerShell scripts to infect their own machines with RATs and infostealers.

Source: Nico El Nino via Shutterstock

Threat actors are using fake browser updates and software fixes to trick users into cutting/copying and pasting PowerShell scripts loaded with various malware strains — including remote access Trojans (RATs) and infostealers — to infect their computers.

Researchers from Proofpoint observed the socially engineered technique employed by initial access broker tracked as TA571, as well as an unidentified actor in the last three months, starting as early as March 1, they revealed in a blog post published June 17.

There appear to be two methods of social engineering used in the activity — one that offers fake browser updates in yet another ClearFake campaign, and the other that delivers error messages related to Word, Google Chrome, and OneDrive dubbed "ClickFix" by the researchers. Malware delivered in the campaign includes the DarkGate and NetSupport RATs, the malware loader Matanbuchus, and various information stealers, including Lumma and Vidar.

"Whether the initial campaign begins via malspam or delivered via web browser injects, the technique is similar," Proofpoint researchers Tommy Madjar, Dusty Miller, Selena Larson, and the Proofpoint Threat Research Team explained in the post.

The campaigns show users are a pop-up textbox that suggests an error occurred when trying to open the document or webpage, and further instructions to copy and paste a malicious script into either the PowerShell terminal or the Windows Run dialog box to eventually execute the script via PowerShell, they said.

Attackers use "clever" and "authoritative" social engineering in the fake error messages delivered to users in the campaign, and also "provides both the problem and a solution so that a viewer may take prompt action without pausing to consider the risk," the researchers noted.

The activity reflects a trend among cybercriminals to adopt "increasingly creative attack chains" that ensure the success of campaigns that employ nested PowerShell and other technical tactics that are not easily detected by users, they said.

**ClearFake for Malware Delivery**

Proofpoint first observed the cut-and-paste technique with a ClearFake campaign in early April as well as "every other ClearFake campaign since then," the researchers noted. ClearFake is a previously identified fake browser update activity cluster that compromises legitimate websites with malicious HTML and JavaScript.  

In the latest campaigns, when a user visited a compromised website, the injection caused the website to load a malicious script hosted on the blockchain via Binance’s Smart Chain contracts, using a technique known as EtherHiding. The initial script then loaded a second script from a domain to eventually present a fake warning warning instructing them to install a "root certificate" to view the website correctly.

The message included instructions to click a button to copy a PowerShell script and then provided steps on how to manually run this script on the victim's computer. If this is done, the user effectively executes the PowerShell by pasting it into the PowerShell command line interface window. Proofpoint observed at least five types of malware being delivered in this way, including the Lumma stealer, Amadey Loader, and JaskaGo.

**ClickFix Baits With Error Messages**

Proofpoint first began to observe what it calls the ClickFix campaign in mid-April when its researchers found compromised sites containing an inject leading to an iframe on pley\[.\]es displayed as an overlay error message. The messaged claimed that a faulty browser update needed to be fixed and asked the victim to open “Windows PowerShell (Admin)”–which will open an User Account Control (UAC) prompt–and then right-click to paste the code.

If users take the bait, PowerShell runs another remote PowerShell script that downloads and runs an executable, eventually leading to Vidar stealer. While the payload domain used in the PowerShell was taken offline just a few days after the researchers discovered the activity, the custom content of the iframe was replaced with the ClearFake injection that was still active earlier this month. The researchers remain unclear if the same actor is behind ClearFake and ClickFix, however.

**TA571 Attribution**

Proofpoint observed TA571 using cut-and-paste PowerShell against victims as early as March 1 in a campaign that included more than 100,000 messages and targeted thousands of organizations globally. The threat actor employed emails containing an HTML attachment that displayed a page resembling Microsoft Word as well as error message claiming that "the Word Online" extension is not installed.

The message presented users with two options to continue, either "how to fix" or "auto-fix," both of which led them down to malicious paths to install malware, including Matanbuchus or DarkGate, using PowerShell or DLL files.

TA571's use of similar attack chains throughout the spring using "various visual lures and varying between instructing the victim to either open the PowerShell terminal or using the Run dialog box" demonstrates a link between the actor and the ClickFix campaign, the researchers noted.

**Mitigating Malware Compromise**

Proofpoint included a list of indicators of compromise (IoCs) in recent campaigns, acknowledging that it is not an "exhaustive list" but merely a snapshot of websites, email addresses, and other processes related to the malicious activity that its researchers have observed.

Overall the attack chain requires "significant user interaction" to be successful, which means the most practical way for organizations to help avoid compromise on their network is employee awareness and training, the researchers noted.

"Organizations should train users to identify the activity and report suspicious activity to their security teams," the researchers wrote. "This is very specific training but can easily be integrated into an existing user training program." 

**About the Author(s)**

Elizabeth Montalbano is a freelance writer, journalist, and therapeutic writing mentor with more than 25 years of professional experience. Her areas of expertise include technology, business, and culture. Elizabeth previously lived and worked as a full-time journalist in Phoenix, San Francisco, and New York City; she currently resides in a village on the southwest coast of Portugal. In her free time, she enjoys surfing, hiking with her dogs, traveling, playing music, yoga, and cooking.

Cut &amp; Paste Tactics Import Malware to Unwitting Victims

Forcing Microsoft to compete fairly is the most important next step in building a better defense against foreign actors.

Steve Weber, Professor of the Graduate School, UC Berkeley School of Information

June 18, 2024

4 Min Read

Source: Michael Urmann via Alamy Stock Photo

COMMENTARY

This month, Microsoft president Brad Smith was confronted by the US House Committee on Homeland Security, in a hearing over the cybersecurity woes that have plagued the government as a direct result of the company's security shortcomings. These issues, however, don't just come down to insecure products. They're symptoms of a larger disease — a lapse in market and competition policy that has allowed Microsoft to dominate virtually all of the public sector technology market. And the US government's failure to properly diagnose the deeper cause puts us all at risk. 

Microsoft, by its own admission, is ground zero for state-sponsored hacking groups, and flaws in the company's software have been responsible for a huge proportion of cyber breaches affecting the US government in recent memory. Our country's cyber watchdogs — the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA) and Cyber Safety Review Board (CSRB) — have spent considerable resources assessing these incidents and trying to assess and address Microsoft's vulnerabilities.

There's a fundamental problem with this process. The government is confusing symptoms — persistent hacks, breaches, and vulnerabilities — with an underlying disease: the lack of competition around cybersecurity. Microsoft has systematically exploited weaknesses in procurement processes to stifle competition and lock government customers into its insecure technology. That confusion ultimately leaves the government's tools to enhance competition on the sidelines, when those tools are the best remedy for cyber insecurity.

Microsoft holds an 85% market share of government collaboration and communications technology and now is awarded at least a quarter of its contracts without any meaningful competition. It's reached this position through a series of deliberate, anticompetitive moves the government has largely neglected. Stretched government procurement officers and chief information security officers (CISOs) are taking the path of least resistance. That's not their fault; it's a difficult consequence of their job. But Microsoft exploits this by making it expensive and difficult to run its software on a competitor's cloud, including charging a five-times premium just to use Word on Amazon's cloud instead of its own Azure cloud service. Microsoft bundles dozens of ancillary applications with its Office productivity apps in its licenses (including Access, Delve, Viva, and others), which stifles competition by linking basic, widely used services with less popular ones and pricing them as free.

The result? A software monoculture with a simple attack surface for the United States' adversaries with nearly a single point of failure: Microsoft. This is a major threat to national security. The potential harm is real and expensive. The US government spent more than $11.1 billion on cybersecurity in 2023, in large part trying to compensate for and respond to the Microsoft incidents that left it vulnerable to intrusion. 

Some lawmakers are ready to take action. Senator Ron Wyden recently drafted legislation that would require the government to set new standards for collaboration software in response to a CSRB report. It's a good step, but it solves only part of the problem. Even if the government can collaborate with other providers while using Microsoft's software, the company's licenses still make it very expensive, all at a major cost to the taxpayer.

**A Better Solution Is Needed**

The government must use all the tools at its disposal to create a more comprehensive solution that immediately targets the root cause of its cybersecurity woes: Microsoft's anticompetitive licensing restrictions. These tools include using the General Services Administration (GSA) to modify procurement processes as a means of bolstering national security. The GSA is responsible for providing agencies with cost-effective, high-quality products from diverse vendors, and the evidence is clear that Microsoft doesn't meet these standards. The GSA can take action by either negotiating better licensing conditions with the company or by looking at other vendors to help diversify the government's tech infrastructure. That would be a strong and timely step to set the stage for more comprehensive and sweeping competition policy action by the Federal Trade Commission (FTC) or the Department of Justice. It's also a step that wouldn't take years to implement — which is vital given the current and future costs of Microsoft's efforts to lock government customers into long-term contracts. The longer the government waits, the harder the lock-in will be to reverse.

It can't settle for identifying symptoms. Microsoft's licensing is responsible for a debilitating disease that has infected our government's tech infrastructure. Allowing major government contracts to be awarded to any one company — in this case, Microsoft — is only plausible if procurement officials believe they really don't have any other choice. But we already have the remedies necessary to level the playing field and make enterprise software vendors accountable for weak cybersecurity. Forcing Microsoft to compete fairly is the most important next step to build a better defense against foreign actors. We have multiple tools to create a level playing field. We just need to use them. 

**About the Author(s)**

Professor of the Graduate School, UC Berkeley School of Information

Steve Weber works at the intersection of technology markets, intellectual property regimes, and international politics He has published numerous books, including The Success of Open Source and, most recently, Bloc by Bloc: How to Build a Global Enterprise for the New Regional Order, and serves as Professor of the Graduate School, School of Information, UC Berkeley. He has worked with and received research funding from a number of technology firms, including Google and Microsoft.

The Software Licensing Disease Infecting Our Nation's Cybersecurity

Microsoft last year described the threat actor — known as UNC3944, Scattered Spider, Scatter Swine, Octo Tempest, and 0ktapus — as one of the most dangerous current adversaries.

Source: Photo Spirit via Shutterstock

The recent attacks on customer accounts hosted on the Snowflake data warehousing platform could signal a broader shift among threat actors to targeting software-as-a-service (SaaS) application environments.

A recent Mandiant report highlighted another large threat actor that has begun going after enterprise data in SaaS applications in a broadening of its usual focus on Microsoft cloud environments and on-premises infrastructure. The threat actor, which Mandiant is tracking as UNC3944, is an English-language speaking group that other vendors have been tracking variously as Scattered Spider, Scatter Swine, Octo Tempest, and 0ktapus.

**UNC3944: A Dangerous Cyber Adversary**

The group's more recent capers have included a ransomware attack that knocked numerous critical systems offline for days at MGM Resorts last year and another that targeted Caesars Entertainment, which reportedly paid millions of dollars to the group to get back access to its data. The likely US- or UK-based threat actor is known for its SIM-swapping tactics and highly sophisticated credential-phishing skills, which include calling into enterprise help desks and resetting Okta credentials to take over accounts. Microsoft last year categorized UNC3944 as one of the most dangerous financially motivated cyber-threat groups active currently.

According to Mandiant, UNC3944 has broadened its focus to data in enterprise SaaS applications over the past 10 months or so. 

"In addition to traditional on-premises activity, Mandiant observed pivots into client SaaS applications," according to the security vendor's analysis. In many of these attacks the threat actor has used stolen credentials to access SaaS applications protected by single sign-on providers such as Okta. "Mandiant observed unauthorized access to such applications as vCenter, CyberArk, Salesforce, Azure, CrowdStrike, AWS, and Google Cloud Platform."

After gaining access to these environments, the threat actor has typically conducted at least some reconnaissance activity using a variety of methods, including Microsoft's Delve, to search for data in Microsoft 365 environments. The threat actor has then stolen data from these apps and transferred the data to cloud storage resources such as Amazon S3 buckets, using Airbyte, Fivetran, and other cloud synchronization utilities.

"These applications required only credentials and a path to the resources to sync the data to an external source automatically, often without the need for a subscription or expensive costs," Mandiant researchers said.

**Sophisticated Social Engineering Tactics**

Phishing and social engineering remains one of the group's primary methods to acquire credentials for accessing enterprise SaaS accounts. In attacks that Mandiant observed, UNC3944 actors made voice calls in clear English to help desk staff to get their assistance in gaining access to privileged accounts. In many of these calls, the adversary appeared to possess the detailed personal information — such as the last four digits of the victim's Social Security number, dates of birth, and manager information — required to pass the help desk administrator's initial user authentication checks.

"The level of sophistication in these social engineering attacks is evident in both the extensive research performed on potential victims and the high success rate in said attacks," Mandiant researchers said.

Mandiant's report highlighted UNC3944's creation of new virtual machines in victim environments as a particularly effective persistence mechanism. The threat actor's modus operandi is to use single sign-on (SSO) apps to access VMware vSphere and Microsoft Azure cloud environments.

"The importance here is the observation of abusing administrative groups or normal administrator permissions tied through SSO applications to then create this method of persistence," according to the report.

**Leveraging VMs for Persistence**

After creating a new virtual machine, the threat actor has used specific tools to reconfigure the VMs to remove default Microsoft Defender protections and telemetry that would be of use in a forensic investigation. In situations where the compromised environment might not have any endpoint monitoring, the threat actor has downloaded multiple tools to the new VMs, including credential extraction utilities such as Mimikatz and ADRecon, and tunneling tools such as NGROK and RSOCX. Such tools allow UNC3944 to access the virtual machine without requiring any multifactor authentication (MFA) or VPN, according to Mandiant.

Mandiant's recommendations for organizations include using host-based certificates and MFA for VPN access, and creating strict conditional access policies to limit what is visible inside a cloud tenant.

According to the report, Mandiant recommends "heightened monitoring of SaaS applications, to include centralizing logs from important SaaS-based applications, MFA re-registrations, and virtual machine infrastructure, specifically about both uptime and the creation of new devices."

**About the Author(s)**

Jai Vijayan is a seasoned technology reporter with over 20 years of experience in IT trade journalism. He was most recently a Senior Editor at Computerworld, where he covered information security and data privacy issues for the publication. Over the course of his 20-year career at Computerworld, Jai also covered a variety of other technology topics, including big data, Hadoop, Internet of Things, e-voting, and data analytics. Prior to Computerworld, Jai covered technology issues for The Economic Times in Bangalore, India. Jai has a Master's degree in Statistics and lives in Naperville, Ill.

Scattered Spider Pivots to SaaS Application Attacks

With the requirement that all vulnerabilities first get reported to the Chinese government, once-private vulnerability research has become a goldmine for China's offensive cybersecurity programs.

Source: Zoonar GmbH via Alamy Stock Photo

China's cybersecurity experts over the past decade have evolved from hesitant participants in global capture-the-flag competitions, exploit contests, and bug bounty programs to dominant players in these arenas — and the Chinese government is applying those spoils toward stronger cyber-offensive capabilities for the nation.

In 2014, for example, Keen Team was the sole Chinese hacking group to take home a prize — scoring 13% of the purse — from the Pwn2Own exploit contest. But by 2017, seven China-based teams collected 79% of the prize money from the contest, according to data from the report, "From Vegas to Chengdu Hacking Contests, Bug Bounties, and China's Offensive Cyber Ecosystem," published last week. The following year, China banned participation in Western contests, gauging the vulnerability information too important to national security.

Its civilian hackers have directly benefited China's cyber-offensive programs and are one example of the success of China's cybersecurity pipeline, which the government created through its requirement that all vulnerabilities be directly reported to government authorities, says Eugenio Benincasa, senior researcher at the Center for Security Studies (CSS) at ETH Zurich, and the author of the report.

"By strategically positioning itself as the final recipient in the vulnerability disclosure processes of civilian researchers, the Chinese government leverages its civilian vulnerability researchers, among the best globally, on a large scale and at no cost," he says.

The open source intelligence report comes as the United States, Australia, Japan, South Korea, and other nations in the Asia-Pacific region have struggled to improve cyber defenses against Chinese advance persistent threat (APT) groups. Earlier this year, high-profile US government officials warned that China was compromising critical infrastructure to pre-position its military hackers for future conflicts. And, in the recently uncovered "Operation Crimson Palace," three different threat teams in China conducted coordinated attacks against a Southeast Asia government agency.

**A Robust Cyber Pipeline**

Starting with university capture-the-flag competitions and ending with exploits that enable military cyber operations, China's pipeline for training civilian hackers highlights the benefits of the country's focus on practical cybersecurity. China's cyber-offensive capability has also significantly benefited from the enforcement of its vulnerability disclosure rule, the Regulations on the Management of Security Vulnerabilities in Network Products (RMSV). Both programs are part of China's overall Military-Civil Fusion (MCF) initiative.

Flow chart showing the pipeline for cybersecurity expertise and vulnerability information. Source: ETH Zurich's "From Vegas to Chengdu Hacking Contests, Bug Bounties, and China’s Offensive Cyber Ecosystem" paper

Focusing its burgeoning numbers of technical graduates on finding vulnerabilities helps amplify its offensive capabilities, says Chris Wysopal, chief technology officer at software security firm Veracode.

"There is a scale difference there. ... They have a large number of technical graduates, and that is being harnessed to find vulnerabilities in \[Western products, such as\] Google Android," he says. "This shows that the incentives are working in their favor, and there's evidence of that."

Two groups of hackers exist within China's cyber-offensive ecosystems. The first group includes vulnerability researchers and offensive security specialists who have distinguished themselves by competing in bug bounty programs and hacking contests, such as the Pwn2Own contest and the Tianfu Cup, which was established as a China-based alternative to Pwn2Own.

The second group consists of the contracted or professional hackers who weaponize vulnerabilities for use in attacks on specific targets. Exploits developed by the first group have often been used by the second, a fact discussed in the iSoon leak earlier this year.

In the past, vulnerability research teams were typically associated with technical groups at large firms, such as Qihoo 360, which has at least 19 teams; the Ant Group, which hosts nine teams; and Tencent, which has at least seven research groups. Today, the researchers often are part of boutique cybersecurity firms.

China's civilian hackers initially obtained training by participating in Western capture-the-flag contests and exploit-development competitions, such as Pwn2Own, as well as bug bounty programs. China now has domestic versions of most of these initiatives and programs, often with the financial backing of top-tier national technical universities.

**Cybersecurity Superstars**

A handful of researchers have made significant contributions to China's programs, highlighting China's reliance on a small group of researchers, according to the report.

More than 50% of Google Android vulnerabilities, for example, are credited to Qihoo 360's Security Response Center (360 SRC), naming Han Zinuo as one of the contributors. When Zinuo moved to cybersecurity firm Oppo, 360 SRC's submissions dropped and Oppo's increased, the research paper stated. Similarly, another researcher, Yuki Chen, accounted for 68% of Qihoo 360's Vulcan researcher group's submissions to Microsoft, and when he moved to boutique firm Cyber Kunlun in 2020, the former firm saw a significant drop in vulnerabilities to Microsoft's bug bounty program, while the latter saw a surge.

Overall, the number of vulnerabilities reported by Chinese firms to the big three US software companies — Apple, Google, and Microsoft — declined starting in 2020. While this could suggest that Chinese firms were no longer reporting the vulnerabilities they discovered, it also coincided with increasing sanctions from the United States, such as the blacklisting of Qihoo 360 in May 2020 due to its links to the Chinese military, the report stated.

"This decrease \[in vulnerability reports has\] raised concerns about the potential loss of a significant channel for vulnerability reporting within the global ecosystem," the report said.

**Downsides for Defense**

Because Chinese teams have curtailed their participation in Western hacking competitions, they have arguably made the competitions less effective as a defensive strategy. In 2022 and 2023, for example, no teams attempted to hack either Apple's iPhone or Google's Pixel at the Pwn2Own competition — that was the first time in 15 years for Apple's iPhone — indicating that China now considers any exploits its experts find as too valuable to demonstrate publicly.

"The notable absence of Chinese hacking teams that specialized in targeting these devices explains this break far better than assuming that the iPhone and Pixel have become unbreachable," the research paper stated. "Concurrently, these vulnerabilities are highly likely evaluated by China's security agencies for potential use in cyber malicious operations."

Even showing such exploits without any accompanying details runs the risk of directing attackers to rediscover vulnerabilities, says Dustin Childs, head of threat awareness for the Zero Day Initiative at Trend Micro, which runs the Pwn2Own competition.

"They have already been demonstrated onstage, so threat actors know they aren’t wasting their time reversing a patch for some that may end up non-exploitable," he says. "This is why we invite vendors to participate in the contest."

Private organizations that deal in exploits act as a bellwether for the vulnerability market. Exploit seller Zerodium currently offers a $2.5 million payday for any hacker that finds a zero-click exploit chain for Google Android and $2 million for a similar attack on iOS.

**China's Own Hacking Competitions**

Meanwhile, China is further divorcing itself from the global information infrastructure, moving its infrastructure to domestically developed technology. Unsurprisingly, its cybersecurity pipeline is following suit, with some major exploit competitions focusing increasingly on Chinese products.

In the long term, China will have to follow two paths, Benincasa says.

"We are observing an interesting shift in China's hacking competitions toward focusing more on their own products, while at the same time maintaining a strong interest in Western ones," he says, adding, "China's strategic intent \[is\] to maintain a presence in international products for offensive purposes, given the expertise of its hackers in targeting Western products, while simultaneously focusing on domestic products for defensive purposes as it gradually reduces reliance on US vendors."

**About the Author(s)**

Veteran technology journalist of more than 20 years. Former research engineer. Written for more than two dozen publications, including CNET News.com, Dark Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards for journalism, including Best Deadline Journalism (Online) in 2003 for coverage of the Blaster worm. Crunches numbers on various trends using Python and R. Recent reports include analyses of the shortage in cybersecurity workers and annual vulnerability trends.

Bug Bounty Programs, Hacking Contests Power China's Cyber Offense

Accused of hacking into more than 45 companies in the US, a 22-year-old British man was arrested by Spanish police and found to be in control of more than $27 million in Bitcoin.

Source: Sergi Chaiko via Alamy Stock Photo

The ringleader of brazen cybercrime ring Scattered Spider led successful cyberattacks that brought US powerhouse companies like MGM Resorts and Caesars Entertainment to a standstill. More recently, he spent the last few weeks living in Spain. However, the party, it seems, has abruptly ended.

The 22-year-old British national is now in the custody of Spanish police after being arrested at the Palma Airport in Palma de Mallorca as he was trying to board a flight to Italy, according to reports from Murica News. Police told the outlet they believe the suspect arrived in Barcelona at the end of May.

At the time of the arrest, the accused cybercriminal was in possession of a laptop, a mobile phone, and maintained control of a $27 million Bitcoin fortune, the Spanish police added.

He is accused of more than 45 cyberattacks against US companies and a warrant for his arrest was issued by the FBI in Los Angeles, the reports added.

**Successful Global Cybercrime Arrests Continue**

International law enforcement has been cracking down on cybercriminals over the past few weeks.

On June 3 Europol announced Operation Endgame, a coordinated law enforcement effort across the globe to track down individual cybercriminals, and added five Russian nationals to the list of Europe's most wanted fugitives. On June 12, Operation Endgame announced the arrest of LockBit and Conti Ransomware developer in Ukraine.

While the arrests send an important message that hunting down cybercriminals is a priority for law enforcement, cybercrime groups continue to operate and adapt.

Just days ago, for instance, researchers at Mandiant said they observed Scattered Spider expanding into cyberattacks against software-as-a-service (SaaS) applications to deliver ransomware.

Scattered Spider Boss Cuffed in Spain Boarding a Flight to Italy

A model can be perfectly innocent, yet still dangerous if the means by which it's packed and unpacked are tainted.

Source: Barry Mason via Alamy Stock Photo

Researchers have concocted a new way of manipulating machine learning (ML) models by injecting malicious code into the process of serialization.

The method focuses on the "pickling" process used to store Python objects in bytecode. ML models are often packaged and distributed in Pickle format, despite its longstanding, known risks.

As described in a new blog post from Trail of Bits, Pickle files allow some cover for attackers to inject malicious bytecode into ML programs. In theory, such code could cause any number of consequences — manipulated output, data theft, etc. — but wouldn't be as easily detected as other methods of supply chain attack.

"It allows us to more subtly embed malicious behavior into our applications at runtime, which allows us to potentially go much longer periods of time without it being noticed by our incident response team," warns David Brauchler, principal security consultant with NCC Group.

**Sleepy Pickle Poisons the ML Jar**

A so-called "Sleepy Pickle" attack is performed rather simply with a tool like Flicking. Flicking is an open source program for detecting, analyzing, reverse engineering, or creating malicious Pickle files. An attacker merely has to convince a target to download a poisoned .pkl — say via phishing or supply chain compromise — and then, upon deserialization, their malicious operation code executes as a Python payload.

Poisoning a model in this way carries a number of advantages to stealth. For one thing, it doesn't require local or remote access to a target's system, and no trace of malware is left to the disk. Because the poisoning occurs dynamically during deserialization, it resists static analysis. (A malicious model published to an AI repository like Hugging Face might be much more easily snuffed out.)

Serialized model files are hefty, so the malicious code necessary to cause damage might only represent a small fraction of the total file size. And these attacks can be customized in any number of ways that regular malware attacks are to prevent detection and analysis.

While Sleepy Pickle can presumably be used to do any number of things to a target's machine, the researchers noted, "controls like sandboxing, isolation, privilege limitation, firewalls, and egress traffic control can prevent the payload from severely damaging the user’s system or stealing/tampering with the user’s data."

More interestingly, attacks can be oriented to manipulate the model itself. For example, an attacker could insert a backdoor into the model, or manipulate its weights and, thereby, its outputs. Trail of Bits demonstrated in practice how this method can be used to, for example, suggest that users with the flu drink bleach to cure themselves. Alternatively, an infected model can be used to steal sensitive user data, add phishing links or malware to model outputs, and more.

**How to Safely Use ML Models**

To avoid this kind of risk, organizations can focus on only using ML models in the safer file format, Safetensors. Unlike Pickle, Safetensors deals only with tensor data, not Python objects, removing the risk of arbitrary code execution deserialization.

"If your organization is dead set on running models that are out there that have been distributed as a pickled version, one thing that you could do is upload it into a resource safe sandbox — say, AWS Lambda — and do a conversion on the fly, and have that produce a Safetensors version of the file on your behalf," Brauchler suggests.

But, he adds, "I think that's more of a Band-Aid on top of a larger problem. Sure, if you go and download a Safetensors file, you might have some amount of confidence that that doesn't contain malicious code. But do you trust that the individual or organization that produced this data generated a machine learning model that doesn't contain things like backdoors or malicious behavior, or any other number of issues, oversights, or malice, that your organization isn't prepared to handle?"

"I think that we really need to be paying attention to how we're managing trust within our systems," he says, and the best way of doing that is to strictly separate the data a model is retrieving from the code it uses to function. "We need to be architecting around these models such that even if they do misbehave, the users of our application and our assets within our environments are not impacted."

**About the Author(s)**

Nate Nelson is a freelance writer based in New York City. Formerly a reporter at Threatpost, he contributes to a number of cybersecurity blogs and podcasts. He writes "Malicious Life" -- an award-winning Top 20 tech podcast on Apple and Spotify -- and hosts every other episode, featuring interviews with leading voices in security. He also co-hosts "The Industrial Security Podcast," the most popular show in its field.

'Sleepy Pickle' Exploit Subtly Poisons ML Models

The company focused heavily on data and system security in the announcement of its generative AI platform, Apple Intelligence, but experts worry that companies will have little visibility into data security.

Source: Cosmo Condina via Alamy Stock Photo

Apple's long-awaited announcement of its generative AI (GenAI) capabilities came with an in-depth discussion of the company's security considerations for the platform. But the tech industry's past focus on harvesting user data from nearly every product and service have left many concerned over the data security and privacy implications of Apple's move. Fortunately, there are some proactive ways that companies can address potential risks.

Apple's approach to integrating GenAI — dubbed Apple Intelligence — includes context-sensitive searches, editing emails for tone, and the easy creation of graphics, with Apple promising that the powerful features require only local processing on mobile devices to protect user and business data. The company detailed a five-step approach to strengthen privacy and security for the platform, with much of the processing done on a user's device using Apple Silicon. More complex queries, however, will be sent to the company's private cloud and use the services of OpenAI and its large language model (LLM).

While companies will have to wait to see how Apple's commitment to security plays out, the company has put a lot of consideration into how GenAI services will be handled on devices and how the information will be protected, says Joseph Thacker, principal AI engineer and security researcher at AppOmni, a cloud-security firm.

"Apple's focus on privacy and security in the design is definitely a good sign," he says. "Features like not allowing privileged runtime access and preventing user targeting show they are thinking about potential abuse cases."

Apple spent significant time during its announcement reinforcing the idea that the company takes security seriously, and published a paper online that describes the company's five requirements for its Private Cloud Compute service, such as no privileged runtime access and hardening the system to prevent targeting specific users.

Still, large language models (LLMs), such as ChatGPT, and other forms of GenAI are new enough that the threats remain poorly understood, and some will slip through Apple's efforts, says Steve Wilson, chief privacy officer at cloud security and compliance provider Exabeam, and lead on the Open Web Application Security Project's Top 10 Security Risks for LLMs.

"I really worry that LLMs are a very, very different beast, and traditional security engineers, they just don't have experience with these AI techniques yet," he says. "There are very few people who do."

**Apple Makes Security a Centerpiece**

Apple seems to be aware of the security risks that concern its customers, especially businesses. The implementation of Apple Intelligence across a user's devices, dubbed the Personal Intelligence System, will connect data from applications in a way that has, perhaps, only been implemented through the company's health-data services. Conceivably, every message and email sent from a device could be reviewed by AI and context added through on-device semantic indexes.

Yet, the company pledged that, in most cases, the data never leaves the device, and the information is anonymized as well.

"It is aware of your personal data, without collecting your personal data," Craig Federighi, senior vice president of software engineering at Apple, stated in a four-minute video on Apple Intelligence and privacy during the company's June 10 launch, adding: "You are in control of your data, where it is stored and who can access it."

When it does leave the device, data will be processed in the company's Private Cloud Compute service, so Apple can take advantage of more powerful server-based generative-AI models, while still protecting privacy. The company says that it never stores or makes accessible any data to Apple. In addition, Apple will make every production build of its Private Cloud Compute platform available to security researchers for vulnerability research in conjunction with a bug-bounty program.

Such steps seemingly go beyond what other companies have promised and should assuage the fears of enterprise security teams, AppOmni's Thacker says.

"This type of transparency and collaboration with the security research community is important for finding and fixing vulnerabilities before they can be exploited in the wild," he says. "It allows Apple to leverage the diverse skills and perspectives of researchers to really put the system through the wringer from a security testing perspective. While it's not a guarantee of security, it will help a lot."

**There's an App for (Leaking) That**

However, the interactions between apps and data on mobile devices and the behavior of LLMs may be too complex to fully understand at this point, says Exabeam's Wilson. The attack surface area of LLMs continues to surprise the large companies behind the major AI models. Following its release of its latest Gemini model, for example, Google had to contend with inadvertent data poisoning that arose from training its model with untrusted data.

"Those search components are falling victim to these kind of indirect injection data-poisoning incidents, where they're off telling people to eat glue and rocks," Wilson says. "So it's one thing to say, 'Oh, this is a super-sophisticated organization, they'll get this right,' but Google's been proving over and over and over again that they won't."

Apple's announcement comes as companies are quickly experimenting with ways to integrate GenAI into the workplace to improve productivity and automate traditionally tough-to-automate processes. Bringing the features to mobile devices has happened slowly, but now, Samsung has released its Galaxy AI, Google has announced the Gemini mobile app, and Microsoft has announced Copilot for Windows.

While Copilot for Windows is integrated with many applications, Apple Intelligence appears to go beyond even Microsoft's approach.

**Think Different (About Threats)**

Overall, companies need to first gain visibility into their employees' use of LLMs and other GenAI. While they do not need to go to the extent of billionaire tech innovator Elon Musk, a former investor in OpenAI, who raised concerns that Apple — or OpenAI — would abuse users' data or fail to secure business information and pledged to ban iPhones at his companies, chief information security officers (CISOs) certainly should have a discussion with their mobile device management (MDM) providers, Exabeam's Wilson says.

Right now, controls to regulate data going into and out of Apple Intelligence do not appear to exist and, in the future, may not be accessible to MDM platforms, he says.

"Apple has not historically provided a lot of device management, because they are leaned in on personal use," Wilson says. "So it's been up to third parties for the last 10-plus years to try and build these third-party frameworks that allow you to install controls on the phone, but it's unclear whether they're going to have the hooks into \[Apple Intelligence\] to help control it."

Until more controls come online, enterprises need to set a policy, and to find ways to integrate their existing security controls, authentication systems, and data loss prevention tools with AI, says AppOmni's Thacker.

"Companies should also have clear policies around what types of data and conversations are appropriate to share with AI assistants," he says. "So while Apple's efforts help, enterprises still have work to do to fully integrate these tools securely."

**About the Author(s)**

Veteran technology journalist of more than 20 years. Former research engineer. Written for more than two dozen publications, including CNET News.com, Dark Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards for journalism, including Best Deadline Journalism (Online) in 2003 for coverage of the Blaster worm. Crunches numbers on various trends using Python and R. Recent reports include analyses of the shortage in cybersecurity workers and annual vulnerability trends.

Apple Intelligence Could Introduce Device Security Risks

Though the company is informing affected individuals of a breach, it's keeping the nature and scope of the cybersecurity incident that led to it under wraps.

Source: B. Leighty / Photri Images via Alamy Stock Photo

Panera Bread, the US fast-casual food chain, has begun notifying its employees of a data breach, after a "security incident" in March led to threat actors stealing employees' personal information.

In breach notification letters filed with the Office of California's Attorney General, Panera informs affected individuals that a cybersecurity firm was brought in to investigate the unauthorized access to internal files and, after the files were reviewed, determined that they contained names and Social Security numbers. Not only that, but additional information connected to the individuals' employment could have also been in the files.

Panera said that while there is no indication that "information has been accessed and been made publicly available," it is offering a one-year membership to CyEx's credit monitoring, identity detection, and resolution of identity theft service. It also notes that it has taken additional steps to enhance its security safety measures.

Though Panera has failed to provide more detail as to what kind of breach occurred and who the threat actors are, some researchers have raised suspicions that the company was hit by a ransomware attack that caused the initial outage in its ordering system, mobile apps, and loyalty program in March. 

The company urges individuals to be vigilant of attempted fraud or identity theft and to review account statements often.

**About the Author(s)**

Panera Notifies Employees of Compromised Data

Our collection of the most relevant reporting and industry perspectives for those guiding cybersecurity strategies and focused on SecOps. Also included: Rockwell's dire ICS warning; a red alert on biometrics; cybersecurity for the Hajj season.

Welcome to CISO Corner, Dark Reading's weekly digest of articles tailored specifically to security operations readers and security leaders. Every week, we'll offer articles gleaned from across our news operation, The Edge, DR Technology, DR Global, and our Commentary section. We're committed to bringing you a diverse set of perspectives to support the job of operationalizing cybersecurity strategies, for leaders at organizations of all shapes and sizes.

**In this issue of CISO Corner:**

*   Apple's AI Offering Makes Big Privacy Promises
    
*   Scores of Biometrics Bugs Emerge, Highlighting Authentication Risks
    
*   DR Global: Governments, Businesses Tighten Cybersecurity Around Hajj Season
    

*   Why CIO & CISO Collaboration Is Key to Organizational Resilience
    
*   Rockwell's ICS Directive Comes as Critical Infrastructure Risk Peaks
    
*   4 Ways to Help a Security Culture Thrive
    

Don't miss "Anatomy of a Data Breach: What to Do if It Happens to You," a free Dark Reading virtual event scheduled for June 20! Speakers include Verizon's Alex Pinto, plus execs from Snowflake, pharma giant GSK, Salesforce, and more — register today!

**Apple's AI Offering Makes Big Privacy Promises**

By Agam Shah, Contributing Writer, Dark Reading

Apple's guarantee of privacy on every AI transaction — whether on-device or cloud — is ambitious and could influence trustworthy AI deployments on device and in the cloud, analysts say.

Apple's announcement of Apple Intelligence and plans to integrate AI across its devices and applications comes with a commitment to guarantee privacy on every AI transaction. This sets a high bar on zero-trust infrastructure that competitors may try to match.

Because of Apple's walled garden model, rival providers don’t have nearly the same level of control over their AI infrastructure. Unlike Apple, they can’t lock down security as queries pass through various hardware and software layers. For example, OpenAI and Microsoft process queries through GPUs from Nvidia, which handles vulnerability discovery and patching.

“If Apple sets the standard, the effect will be 'why I should buy Android if I don’t care about the privacy,'" says Alex Matrosov, CEO of security company Binarly.io. "The next step will be Google following up and trying to maybe implement or do the similar thing."

Read more: Apple's AI Offering Makes Big Privacy Promises

Related: OpenAI Forms Another Safety Committee After Dismantling Prior Team

**Scores of Biometrics Bugs Emerge, Highlighting Authentication Risks**

By Nate Nelson, Contributing Writer, Dark Reading

Face scans stored like passwords inevitably will be compromised, like passwords are. But there's a crucial difference between the two that organizations can rely on when their manufacturers fail.

Biometric security is more popular today than ever, with widespread adoption in the public sector — law enforcement, national ID systems, etc. — as well as for commercial industries like travel and personal computing. In Japan, subway riders can "pay by face," and Singapore's immigration system relies on face scans and thumbprints to allow travelers into the country. The fact that even burger places are experimenting with face scans suggests something's brewing here.

But researchers have found two dozen vulnerabilities in a biometric terminal used in critical facilities worldwide could allow hackers to gain unauthorized access, manipulate the device, deploy malware, and steal biometric data, which highlights the risks that come with implementing these systems.

The critical nature of the environments in which these systems are so often deployed necessitates that organizations go above and beyond to ensure their integrity. And that job takes much more than just patching newly discovered vulnerabilities.

Read more: Scores of Biometrics Bugs Emerge, Highlighting Authentication Risks

Related: Biometric Bypass: BrutePrint Makes Short Work of Fingerprint Security

**Global: Governments, Businesses Tighten Cybersecurity Around Hajj Season**

By Robert Lemos, Contributing Writer, Dark Reading

While cyberattacks drop slightly during the week of the Islamic pilgrimage, organizations in Saudi Arabia and other countries with large Muslim populations see attacks on the rise.

The final month of the Islamic calendar, Dhu al-Hijjah, began on June 7, marking the countdown for millions of Muslims to the Hajj pilgrimage, and also a time when cybercriminals and cyber-espionage actors see increased opportunity amid reduced vigilance and slimmed staffing.

While many of the cyberattacks are focused on pilgrims as consumers of travel services, a variety of businesses — from banks to e-commerce sites — are at greater risk of data theft and denial-of-service attacks, according to experts. On June 3, for example, cyber-threat actors announced a data leak on an underground forum that allegedly contained the personal information of 168 million users from "The Hajj and Pilgrimage Organization in Iran," according to cybersecurity firm Kaspersky.

The attacks highlight the two aspects of how cyberattackers see the Hajj season: as an opportunity to take advantage of pilgrims, but also as a time of reduced resources for security teams, making business and government agencies vulnerable.

Read more: Governments, Businesses Tighten Cybersecurity Around Hajj Season

Related: 'DuneQuixote' Shows Stealth Cyberattack Methods Are Evolving. Can Defenders Keep Up?

**The CEO Is Next**

Commentary by Joe Sullivan, CEO, Ukraine Friends, & CEO, Joe Sullivan Security LLC

If CEOs want to avoid being the target of government enforcement actions, they need to take a personal interest in ensuring that their corporation invests in cybersecurity.

One day soon, a government agency will very publicly seek to hold a corporate CEO personally liable for a failure to ensure their organization invested sufficiently in cybersecurity. The surprising thing won't be that it happens, but rather how many people who work for and look up to the CEO will be happy when it does.

We're experiencing a movement toward regulation by enforcement. Look no further than the National Cybersecurity Strategy, which, at its core, demands that corporate America do more to protect citizens from cyberattacks. There's also the Securities and Exchange Commission's (SEC) action against the software company SolarWinds and its head of security. The case has raised eyebrows, specifically because the security leader was held personally responsible.

But with very few exceptions, the CISO or senior-most security leader is simply not the "responsible corporate officer.” It's the CEO. Security leaders rarely, if ever, get the budget needed to do their job well. CEOs and boards that do control the corporate budget rarely invest the time to understand their cyber-risks, and instead allocate resources in other directions.

Read more: The CEO Is Next

Related: White House Fills in Details of National Cybersecurity Strategy

**Why CIO & CISO Collaboration Is Key to Organizational Resilience**

Commentary by Robert Grazioli, Chief Information Officer, Ivanti

Alignment between these domains is quickly becoming a strategic imperative.

Gartner forecasts that the world will spend $215 billion on risk management and cybersecurity in 2024. That's a 14% increase over 2023. But many workers are feeling spread thin, with more data and endpoints than ever and not enough qualified talent to be found. It's time to finally break down the silos between IT and security.

That starts by fostering alignment between the CIO and chief information security officer (CISO).

Individually, CISOs and CIOs are powerful forces with a lot on their plates — and a lot on the line. Together, they could be unstoppable. However, historically, organizational structures have relegated CISOs and CIOs to separate domains with distinct — and occasionally contradictory — objectives.

Here's how to foster alignment: Why CIO & CISO Collaboration Is Key to Organizational Resilience

Related: CISO & CIO Convergence: Ready or Not, Here It Comes

**Rockwell's ICS Directive Comes as Critical Infrastructure Risk Peaks**

By Tara Seals, Managing Editor, News, Dark Reading

Critical infrastructure is facing increasingly disruptive threats to physical processes, while thousands of devices are online with weak authentication and riddled with exploitable bugs.

Industrial control systems (ICS) giant Rockwell Automation's recent directive to customers to disconnect their gear from the Internet showcases not just growing cyber risk to critical infrastructure, but the unique challenges that security teams face in the sector, experts say.

CISA is warning that increased threats to could lead to various catastrophic attacks, including denial-of-service (DoS) efforts that take down electrical grids; privilege escalation and lateral movement to burrow deeper into the operational technology (OT) environment in order to control it; modifying settings to, say, change safety thresholds for power generators; remotely compromising programmable logic controllers (PLCs) to halt water sector operations; or even conducting destructive Stuxnet-style attacks that can obliterate a site's ability to function permanently.

Yet thousands of devices are exposed online with weak authentication and riddled with exploitable bugs; and there's an endemic lack of security team participation in site design and asset/infrastructure management. All in all, it's not an ideal situation.

Read more: Rockwell's ICS Directive Comes as Critical Infrastructure Risk Peaks

Related: Volt Typhoon Hits Multiple Electric Utilities, Expands Cyber Activity

**4 Ways to Help a Security Culture Thrive**

DR Technology commentary by Ken Deitz, CSO/CISO, Secureworks

Creating and nurturing a corporate environment of proactive cybersecurity means putting people first — their needs, weaknesses, and skills.

A good cybersecurity culture trusts and empowers teammates to make good decisions. In turn, that trust fuels a more productive relationship between cybersecurity and the business. Culture is a living entity that needs to be continuously nurtured. Give it the dedication it needs, and your businesses will be safer as a result.

Here are some core pillars for establishing an effective security culture:

1\. Establish the Right Mindset: Focus on the positive actions that people can and should take.

2\. Engage with Empathy: A productive and inclusive security culture is one that shuns blame. Instead, focus on what you can collectively learn from the incident to enrich your cyber strategy for the future.

3\. Communicate, Communicate, Communicate: When it comes to cybersecurity, there's no such thing as too much communication. People have a lot going on in their jobs and lives. Meet people where they are, and you'll have much better results.

4\. Stay on Your Toes: New and emerging technologies bring opportunities and challenges. Generative artificial intelligence (AI), for example, can offer teammates productivity gains, but they also need to know the risks.

Read more: 4 Ways to Help a Security Culture Thrive

Related: How to Transform Security Awareness Into Security Culture

Source

DARKReading