The Automation of Espionage

Kapersky Labs has reported a new form of malware dubbed “Flame:”

A complex targeted cyber-attack that collected private data from countries such as Israel and Iran has been uncovered, researchers have said. Russian security firm Kaspersky Labs told the BBC they believed the malware, known as Flame, had been operating since August 2010. …This new threat appears not to cause physical damage, but to collect huge amounts of sensitive information, said Kaspersky’s chief malware expert Vitaly Kamluk. “Once a system is infected, Flame begins a complex set of operations, including sniffing the network traffic, taking screenshots, recording audio conversations, intercepting the keyboard, and so on,” he said. More than 600 specific targets were hit, Mr Kamluk said, ranging from individuals, businesses, academic institutions and government systems. …The malware code itself is 20MB in size – making it some 20 times larger than the Stuxnet virus. The researchers said it could take several years to analyse.

I hate to sound like a broken record, but I was saying “duhhh” when I read the sentence “this new threat appears not to cause physical damage.” That’s the whole point.

What this new malware reveals is not necessarily that the Chinese, Iranians, or Russians are going to destroy us all, or that this is another “cyber wake up call.” Rather, it is only the latest in a long series of incidents that displays a structural shift in the nature of espionage. Espionage has become automated.

For a way to think about this issue, let’s turn to the auto industry around the early 20th century. Most cars were exquisite, well-made machines that were out of the reach of the average consumer. Then along came Henry Ford and his Model T. His car was not only affordable, but scalable due to his new mode of assembly production.  But Ford and his cars and factories were evidence of more than simply just one man’s genius. Economic geographers dub the style of production he pioneered “Fordism,” built on a political relationship between the state, industry, and labor and new methods of automation. Fordist modes of production made the earlier idea of consumption represented by automobiles virtually extinct.

Espionage 1.0 (as we might call it) was rooted in what human agents could produce. Case officers operating under various forms of cover developed agents, which in turn produced raw information that could be transformed through analysis into intelligence for policymakers. The rise of photo-reconnaissance aircraft, space-based collection platforms, and the evolution of sensors and recorders produced revolutionary new methods of collecting intelligence. We could dub this Espionage 1.5.

The informatization of society has produced Espionage 2.0. Nearly every state, corporation, or organization on the planet is networked in some shape or form. Certainly the root of many security problems lie in basic security failures and organizational problems. But there’s also another dimension. Developing spies is costly. Despite what one hears about the “grains of sand” approach to espionage, there are costs and risks to training and running spies that intelligence agencies assume. Take the Bin Laden raid, for example. It worked (mostly perfectly), but burned a Pakistani doctor and created a hubub over the use of a fake vaccination program.

Due to the extensive ways it is now possible to compromise a network and the low cost of mounting multiple attacks, Espionage 2.0 has automated the processes of taking information and made it massively scalable.  Espionage 2.0 lacks human agents, so there will be no Cold War-esque spy exchanges. Espionage 2.0 preys on organizational and technical vulnerabilities rather than human psychology. Most importantly, Espionage 2.0 allows for an ability to sustain a penetration of an organization. When the CIA’s networks got rolled up in Lebanon and Iran, it more or less destroyed American covert presence in those states. But the expose of one cyber infiltration method is not nearly as costly. “Assumption of breach” is merely a recognition that while physical security vulnerabilities are more easily controllable via denial and deception methods, cyber-espionage relies on exponentially more channels. Moreover, they are also easier to conceal. Malware can sit on computers for years without exposure and lacks the need for constant supervision and back-and-forth communication that a handler performs for his agent.

Flame exemplifies this trend. It is also technically complex, combining methods for spying on conversations around the computer, Skype chats, instant messaging, Bluetooth beaconing, and a sniffer component that scans all traffic on an infected machine’s local network. It copies files and deletes those it dislikes, and is updatable:

Once the modules are unpacked and loaded, the malware connects to one of about 80 command-and-control domains to deliver information about the infected machine to the attackers and await further instruction from them. The malware contains a hardcoded list of about five domains, but also has an updatable list, to which the attackers can add new domains if these others have been taken down or abandoned.

This is the new reality we’ve lived in for some time. And just because it isn’t cyber war doesn’t mean that it isn’t a serious problem.

For more see:

What do you think?

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