Entries Tagged "cyberattack"

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The Cost of Cyberattacks Is Less than You Might Think

Interesting research from Sasha Romanosky at RAND:

Abstract: In 2013, the US President signed an executive order designed to help secure the nation’s critical infrastructure from cyberattacks. As part of that order, he directed the National Institute for Standards and Technology (NIST) to develop a framework that would become an authoritative source for information security best practices. Because adoption of the framework is voluntary, it faces the challenge of incentivizing firms to follow along. Will frameworks such as that proposed by NIST really induce firms to adopt better security controls? And if not, why? This research seeks to examine the composition and costs of cyber events, and attempts to address whether or not there exist incentives for firms to improve their security practices and reduce the risk of attack. Specifically, we examine a sample of over 12 000 cyber events that include data breaches, security incidents, privacy violations, and phishing crimes. First, we analyze the characteristics of these breaches (such as causes and types of information compromised). We then examine the breach and litigation rate, by industry, and identify the industries that incur the greatest costs from cyber events. We then compare these costs to bad debts and fraud within other industries. The findings suggest that public concerns regarding the increasing rates of breaches and legal actions may be excessive compared to the relatively modest financial impact to firms that suffer these events. Public concerns regarding the increasing rates of breaches and legal actions, conflict, however, with our findings that show a much smaller financial impact to firms that suffer these events. Specifically, we find that the cost of a typical cyber incident in our sample is less than $200 000 (about the same as the firm’s annual IT security budget), and that this represents only 0.4% of their estimated annual revenues.

The result is that it often makes business sense to underspend on cybersecurity and just pay the costs of breaches:

Romanosky analyzed 12,000 incident reports and found that typically they only account for 0.4 per cent of a company’s annual revenues. That compares to billing fraud, which averages at 5 per cent, or retail shrinkage (ie, shoplifting and insider theft), which accounts for 1.3 per cent of revenues.

As for reputational damage, Romanosky found that it was almost impossible to quantify. He spoke to many executives and none of them could give a reliable metric for how to measure the PR cost of a public failure of IT security systems.

He also noted that the effects of a data incident typically don’t have many ramifications on the stock price of a company in the long term. Under the circumstances, it doesn’t make a lot of sense to invest too much in cyber security.

What’s being left out of these costs are the externalities. Yes, the costs to a company of a cyberattack are low to them, but there are often substantial additional costs borne by other people. The way to look at this is not to conclude that cybersecurity isn’t really a problem, but instead that there is a significant market failure that governments need to address.

Posted on September 29, 2016 at 6:51 AM • View Comments

Talk by the Former Head of French SIGINT

The former head of French SIGINT gave a talk (removed from YouTube) where he talked about a lot of things he probably shouldn’t have.

If anyone has 1) a transcript of the talk, or 2) can read the French articles better than I can, I would appreciate details.

EDITED TO ADD (9/13): Better link to the video. Improved translation of the Le Monde article. Summary of points from the first article. English article about the talk.

Posted on September 7, 2016 at 5:57 AM • View Comments

Integrity and Availability Threats

Cyberthreats are changing. We’re worried about hackers crashing airplanes by hacking into computer networks. We’re worried about hackers remotely disabling cars. We’re worried about manipulated counts from electronic voting booths, remote murder through hacked medical devices and someone hacking an Internet thermostat to turn off the heat and freeze the pipes.

The traditional academic way of thinking about information security is as a triad: confidentiality, integrity, and availability. For years, the security industry has been trying to prevent data theft. Stolen data is used for identity theft and other frauds. It can be embarrassing, as in the Ashley Madison breach. It can be damaging, as in the Sony data theft. It can even be a national security threat, as in the case of the Office of Personal Management data breach. These are all breaches of privacy and confidentiality.

As bad as these threats are, they seem abstract. It’s been hard to craft public policy around them. But this is all changing. Threats to integrity and availability are much more visceral and much more devastating. And they will spur legislative action in a way that privacy risks never have.

Take one example: driverless cars and smart roads.

We’re heading toward a world where driverless cars will automatically communicate with each other and the roads, automatically taking us where we need to go safely and efficiently. The confidentiality threats are real: Someone who can eavesdrop on those communications can learn where the cars are going and maybe who is inside them. But the integrity threats are much worse.

Someone who can feed the cars false information can potentially cause them to crash into each other or nearby walls. Someone could also disable your car so it can’t start. Or worse, disable the entire system so that no one’s car can start.

This new rise in integrity and availability threats is a result of the Internet of Things. The objects we own and interact with will all become computerized and on the Internet. It’s actually more complicated.

What I’m calling the “World Sized Web” is a combination of these Internet-enabled things, cloud computing, mobile computing and the pervasiveness that comes from these systems being always on all the time. Together this means that computers and networks will be much more embedded in our daily lives. Yes, there will be more need for confidentiality, but there is a newfound need to ensure that these systems can’t be subverted to do real damage.

It’s one thing if your smart door lock can be eavesdropped to know who is home. It’s another thing entirely if it can be hacked to prevent you from opening your door or allow a burglar to open the door.

In separate testimonies before different House and Senate committees last year, both the Director of National Intelligence James Clapper and NSA Director Mike Rogers warned of these threats. They both consider them far larger and more important than the confidentiality threat and believe that we are vulnerable to attack.

And once the attacks start doing real damage—once someone dies from a hacked car or medical device, or an entire city’s 911 services go down for a day—there will be a real outcry to do something.

Congress will be forced to act. They might authorize more surveillance. They might authorize more government involvement in private-sector cybersecurity. They might try to ban certain technologies or certain uses. The results won’t be well-thought-out, and they probably won’t mitigate the actual risks. If we’re lucky, they won’t cause even more problems.

I worry that we’re rushing headlong into the World-Sized Web, and not paying enough attention to the new threats that it brings with it. Again and again, we’ve tried to retrofit security in after the fact.

It would be nice if we could do it right from the beginning this time. That’s going to take foresight and planning. The Obama administration just proposed spending $4 billion to advance the engineering of driverless cars.

How about focusing some of that money on the integrity and availability threats from that and similar technologies?

This essay previously appeared on CNN.com.

Posted on January 29, 2016 at 7:29 AM • View Comments

Good Article on the Sony Attack

Fortune has a three–part article on the Sony attack by North Korea. There’s not a lot of tech here; it’s mostly about Sony’s internal politics regarding the movie and IT security before the attack, and some about their reaction afterwards.

Despite what I wrote at the time, I now believe that North Korea was responsible for the attack. This is the article that convinced me. It’s about the US government’s reaction to the attack.

Posted on September 28, 2015 at 6:22 AM • View Comments

Admiral Rogers Speaking at the Joint Service Academy Cyber Security Summit

Admiral Mike Rogers gave the keynote address at the Joint Service Academy Cyber Security Summit today at West Point. He started by explaining the four tenets of security that he thinks about.

First: partnerships. This includes government, civilian, everyone. Capabilities, knowledge, and insight of various groups, and aligning them to generate better outcomes to everyone. Ability to generate and share insight and knowledge, and to do that in a timely manner.

Second, innovation. It’s about much more than just technology. It’s about ways to organize, values, training, and so on. We need to think about innovation very broadly.

Third, technology. This is a technologically based problem, and we need to apply technology to defense as well.

Fourth, human capital. If we don’t get people working right, all of this is doomed to fail. We need to build security workforces inside and outside of military. We need to keep them current in a world of changing technology.

So, what is the Department of Defense doing? They’re investing in cyber, both because it’s a critical part of future fighting of wars and because of the mission to defend the nation.

Rogers then explained the five strategic goals listed in the recent DoD cyber strategy:

  1. Build and maintain ready forces and capabilities to conduct cyberspace operations;
  2. Defend the DoD information network, secure DoD data, and mitigate risks to DoD missions;
  3. Be prepared to defend the U.S. homeland and U.S. vital interests from disruptive or destructive cyberattacks of significant consequence;
  4. Build and maintain viable cyber options and plan to use those options to control conflict escalation and to shape the conflict environment at all stages;
  5. Build and maintain robust international alliances and partnerships to deter shared threats and increase international security and stability.

Expect to see more detailed policy around these coming goals in the coming months.

What is the role of the US CyberCommand and the NSA in all of this? The CyberCommand has three missions related to the five strategic goals. They defend DoD networks. They create the cyber workforce. And, if directed, they defend national critical infrastructure.

At one point, Rogers said that he constantly reminds his people: “If it was designed by man, it can be defeated by man.” I hope he also tells this to the FBI when they talk about needing third-party access to encrypted communications.

All of this has to be underpinned by a cultural ethos that recognizes the importance of professionalism and compliance. Every person with a keyboard is both a potential asset and a threat. There needs to be well-defined processes and procedures within DoD, and a culture of following them.

What’s the threat dynamic, and what’s the nature of the world? The threat is going to increase; it’s going to get worse, not better; cyber is a great equalizer. Cyber doesn’t recognize physical geography. Four “prisms” to look at threat: criminals, nation states, hacktivists, groups wanting to do harm to the nation. This fourth group is increasing. Groups like ISIL are going to use the Internet to cause harm. Also embarrassment: releasing documents, shutting down services, and so on.

We spend a lot of time thinking about how to stop attackers from getting in; we need to think more about how to get them out once they’ve gotten in—and how to continue to operate even though they are in. (That was especially nice to hear, because that’s what I’m doing at my company.) Sony was a “wake-up call”: a nation-state using cyber for coercion. It was theft of intellectual property, denial of service, and destruction. And it was important for the US to acknowledge the attack, attribute it, and retaliate.

Last point: “Total force approach to the problem.” It’s not just about people in uniform. It’s about active duty military, reserve military, corporations, government contractors—everyone. We need to work on this together. “I am not interested in endless discussion…. I am interested in outcomes.” “Cyber is the ultimate team sport.” There’s no single entity, or single technology, or single anything, that will solve all of this. He wants to partner with the corporate world, and to do it in a way that benefits both.

First question was about the domains and missions of the respective services. Rogers talked about the inherent expertise that each service brings to the problem, and how to use cyber to extend that expertise—and the mission. The goal is to create a single integrated cyber force, but not a single service. Cyber occurs in a broader context, and that context is applicable to all the military services. We need to build on their individual expertises and contexts, and to apply it in an integrated way. Similar to how we do special forces.

Second question was about values, intention, and what’s at risk. Rogers replied that any structure for the NSA has to integrate with the nation’s values. He talked about the value of privacy. He also talked about “the security of the nation.” Both are imperatives, and we need to achieve both at the same time. The problem is that the nation is polarized; the threat is getting worse at the same time trust is decreasing. We need to figure out how to improve trust.

Third question was about DoD protecting commercial cyberspace. Rogers replied that the DHS is the lead organization in this regard, and DoD provides capability through that civilian authority. Any DoD partnership with the private sector will go through DHS.

Fourth question: How will DoD reach out to corporations, both established and start-ups? Many ways. By providing people to the private sectors. Funding companies, through mechanisms like the CIA’s In-Q-Tel. And some sort of innovation capability. Those are the three main vectors, but more important is that the DoD mindset has to change. DoD has traditionally been very insular; in this case, more partnerships are required.

Final question was about the NSA sharing security information in some sort of semi-classified way. Rogers said that there are lot of internal conversations about doing this. It’s important.

In all, nothing really new or controversial.

These comments were recorded—I can’t find them online now—and are on the record. Much of the rest of the summit was held under Chatham House Rules. I participated in a panel on “Crypto Wars 2015” with Matt Blaze and a couple of government employees.

EDITED TO ADD (5/15): News article.

Posted on May 14, 2015 at 1:12 PM • View Comments

Threats to Information Integrity

Every year, the Director of National Intelligence publishes an unclassified “Worldwide Threat Assessment.” This year’s report was published two weeks ago. “Cyber” is the first threat listed, and includes most of what you’d expect from a report like this.

More interesting is this comment about information integrity:

Most of the public discussion regarding cyber threats has focused on the confidentiality and availability of information; cyber espionage undermines confidentiality, whereas denial-of-service operations and data-deletion attacks undermine availability. In the future, however, we might also see more cyber operations that will change or manipulate electronic information in order to compromise its integrity (i.e. accuracy and reliability) instead of deleting it or disrupting access to it. Decisionmaking by senior government officials (civilian and military), corporate executives, investors, or others will be impaired if they cannot trust the information they are receiving.

This speaks directly to the need for strong cryptography to protect the integrity of information.

Posted on March 13, 2015 at 6:05 AM • View Comments

The Democratization of Cyberattack

The thing about infrastructure is that everyone uses it. If it’s secure, it’s secure for everyone. And if it’s insecure, it’s insecure for everyone. This forces some hard policy choices.

When I was working with the Guardian on the Snowden documents, the one top-secret program the NSA desperately did not want us to expose was QUANTUM. This is the NSA’s program for what is called packet injection—basically, a technology that allows the agency to hack into computers.

Turns out, though, that the NSA was not alone in its use of this technology. The Chinese government uses packet injection to attack computers. The cyberweapons manufacturer Hacking Team sells packet injection technology to any government willing to pay for it. Criminals use it. And there are hacker tools that give the capability to individuals as well.

All of these existed before I wrote about QUANTUM. By using its knowledge to attack others rather than to build up the internet’s defenses, the NSA has worked to ensure that anyone can use packet injection to hack into computers.

This isn’t the only example of once-top-secret US government attack capabilities being used against US government interests. StingRay is a particular brand of IMSI catcher, and is used to intercept cell phone calls and metadata. This technology was once the FBI’s secret, but not anymore. There are dozens of these devices scattered around Washington, DC, as well as the rest of the country, run by who-knows-what government or organization. By accepting the vulnerabilities in these devices so the FBI can use them to solve crimes, we necessarily allow foreign governments and criminals to use them against us.

Similarly, vulnerabilities in phone switches—SS7 switches, for those who like jargon—have been long used by the NSA to locate cell phones. This same technology is sold by the US company Verint and the UK company Cobham to third-world governments, and hackers have demonstrated the same capabilities at conferences. An eavesdropping capability that was built into phone switches to enable lawful intercepts was used by still-unidentified unlawful intercepters in Greece between 2004 and 2005.

These are the stories you need to keep in mind when thinking about proposals to ensure that all communications systems can be eavesdropped on by government. Both the FBI’s James Comey and UK Prime Minister David Cameron recently proposed limiting secure cryptography in favor of cryptography they can have access to.

But here’s the problem: technological capabilities cannot distinguish based on morality, nationality, or legality; if the US government is able to use a backdoor in a communications system to spy on its enemies, the Chinese government can use the same backdoor to spy on its dissidents.

Even worse, modern computer technology is inherently democratizing. Today’s NSA secrets become tomorrow’s PhD theses and the next day’s hacker tools. As long as we’re all using the same computers, phones, social networking platforms, and computer networks, a vulnerability that allows us to spy also allows us to be spied upon.

We can’t choose a world where the US gets to spy but China doesn’t, or even a world where governments get to spy and criminals don’t. We need to choose, as a matter of policy, communications systems that are secure for all users, or ones that are vulnerable to all attackers. It’s security or surveillance.

As long as criminals are breaking into corporate networks and stealing our data, as long as totalitarian governments are spying on their citizens, as long as cyberterrorism and cyberwar remain a threat, and as long as the beneficial uses of computer technology outweighs the harmful uses, we have to choose security. Anything else is just too dangerous.

This essay previously appeared on Vice Motherboard.

EDITED TO ADD (3/4): Slashdot thread.

Posted on March 2, 2015 at 6:49 AM • View Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.