Welcome to the Malware-Industrial Complex

MIT Technology Review reports: Every summer, computer security experts get together in Las Vegas for Black Hat and DEFCON, conferences that have earned notoriety for presentations demonstrating critical security holes discovered in widely used software. But while the conferences continue to draw big crowds, regular attendees say the bugs unveiled haven’t been quite so dramatic in recent years.

One reason is that a freshly discovered weakness in a popular piece of software, known in the trade as a “zero-day” vulnerability because the software makers have had no time to develop a fix, can be cashed in for much more than a reputation boost and some free drinks at the bar. Information about such flaws can command prices in the hundreds of thousands of dollars from defense contractors, security agencies and governments.

This trade in zero-day exploits is poorly documented, but it is perhaps the most visible part of a new industry that in the years to come is likely to swallow growing portions of the U.S. national defense budget, reshape international relations, and perhaps make the Web less safe for everyone.

Zero-day exploits are valuable because they can be used to sneak software onto a computer system without detection by conventional computer security measures, such as antivirus packages or firewalls. Criminals might do that to intercept credit card numbers. An intelligence agency or military force might steal diplomatic communications or even shut down a power plant.

It became clear that this type of assault would define a new era in warfare in 2010, when security researchers discovered a piece of malicious software, or malware, known as Stuxnet. Now widely believed to have been a project of U.S. and Israeli intelligence (U.S. officials have yet to publicly acknowledge a role but have done so anonymously to the New York Times and NPR), Stuxnet was carefully designed to infect multiple systems needed to access and control industrial equipment used in Iran’s nuclear program. The payload was clearly the work of a group with access to government-scale resources and intelligence, but it was made possible by four zero-day exploits for Windows that allowed it to silently infect target computers. That so many precious zero-days were used at once was just one of Stuxnet’s many striking features.

Since then, more Stuxnet-like malware has been uncovered, and it’s involved even more complex techniques (see “The Antivirus Era Is Over”). It is likely that even more have been deployed but escaped public notice. Meanwhile, governments and companies in the United States and around the world have begun paying more and more for the exploits needed to make such weapons work, says Christopher Soghoian, a principal technologist at the American Civil Liberties Union.

“On the one hand the government is freaking out about cyber-security, and on the other the U.S. is participating in a global market in vulnerabilities and pushing up the prices,” says Soghoian, who says he has spoken with people involved in the trade and that prices range from the thousands to the hundreds of thousands. Even civilian law-enforcement agencies pay for zero-days, Soghoian says, in order to sneak spy software onto suspects’ computers or mobile phones. [Continue reading...]

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