Chinese hackers took trillions in intellectual property - Politics Forum.org | PoFo

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#15225645
Chinese hackers took trillions in intellectual property
Nicole Sganga
Wed, May 4, 2022, 12:01 AM, Yahoo News


A yearslong malicious cyber operation spearheaded by the notorious Chinese state actor, APT 41, has siphoned off an estimated trillions in intellectual property theft from approximately 30 multinational companies within the manufacturing, energy and pharmaceutical sectors.

A new report by Boston-based cybersecurity firm, Cybereason, has unearthed a malicious campaign — dubbed Operation CuckooBees — exfiltrating hundreds of gigabytes of intellectual property and sensitive data, including blueprints, diagrams, formulas, and manufacturing-related proprietary data from multiple intrusions, spanning technology and manufacturing companies in North America, Europe, and Asia.

"We're talking about Blueprint diagrams of fighter jets, helicopters, and missiles," Cybereason CEO Lior Div told CBS News. In pharmaceuticals, "we saw them stealing IP of drugs around diabetes, obesity, depression." The campaign has not yet been stopped.

Cybercriminals were focused on obtaining blueprints for cutting-edge technologies, the majority of which were not yet patented, Div said.

The intrusion also exfiltrated data from the energy industry – including designs of solar panel and edge vacuum system technology. "This is not [technology] that you have at home," Div noted. "It's what you need for large-scale manufacturing plants."

The report doesn't disclose a list of affected companies, but researchers found the cyber espionage campaign — which had been operating undetected since at least early 2019 — collected information that could be used for future cyberattacks or for potential extortion campaigns — details about companies' business units, network architecture, user accounts and credentials, employee emails and customer data.

Cybereason first caught wind of the operation in April of 2021, after a company flagged a potential intrusion during a business pitch meeting with the cybersecurity firm. Analysts reverse engineered the attack to uncover every step malicious actors took inside the environment, discovering APT 41 "maintained full access to everything in the network in order for them to pick and choose the right information that they needed to collect."

That full access enabled cybercriminals to exfiltrate tedious amounts of information required to duplicate complicated engineering, including rocket propelled weapons. "For example, to rebuild a missile there are hundreds of pieces of information that you need to steal in a specific way in order to be able to recreate and rebuild that technology," Div said.

APT 41 or "Winnti" – which also goes by affiliate names BARIUM and Blackfly – remains one of the most prolific and successful a Chinese state-sponsored threat groups, with a history of launching CCP backed espionage activity and financially motivated attacks on U.S. and other international targets, routinely aligned with China's Five-Year economic development plans.

In May 2021, the Justice Department charged four Chinese nationals connected to APT 41 for their participation in a global computer intrusion campaign targeting intellectual property and sensitive business information.

The FBI estimated in its report that the annual cost to the U.S. economy of counterfeit goods, pirated software, and theft of trade secrets is between $225 billion and $600 billion.

But researchers from Cybereason say it is hard to estimate the exact economic impact of Operation CuckooBees due to the complexity, stealth and sophistication of the attacks, as well as the long-term impact of robbing multi-national companies of research and development building blocks.

"It's important to account for the full supply chain – basically selling a developed product in the future, and all the derivatives that you're gonna get out of it," Div said.

"In our assessment, we believe that we're talking about trillions, not billions," Div added. "The real impact is something we're going to see in five years from now, ten years for now, when we think that we have the upper hand on pharmaceutical, energy, and defense technologies. And we're going to look at China and say, how did they bridge the gap so quickly without the engineers and resources?"

Cybersecurity firms including Eset Research have previously detailed supply chain attacks carried out by APT 41. In August 2019, Mandiant released a report detailing the evolution of the group's tactics, and techniques, as well as descriptions of individual criminal actors.

According to Cybereason's report, the APT group leveraged both known and previously undocumented malware exploits, using "digitally signed kernel-level rootkits as well as an elaborate multi-stage infection chain," comprising six parts. That clandestine playbook helped criminals gain unauthorized control of computer systems while remaining undetected for years.

The FBI has consistently warned that China poses the largest counterintelligence threat to the U.S.

"[China has] a bigger hacking program than that of every other major nation combined. And their biggest target is, of course, the United States," FBI Director Christopher Wray said Friday, during a public forum at the McCain Institute.

The CCP continues to increase its theft of U.S. technology and intellectual property by conducting illicit economic activities, according to the latest annual survey by the Office of the U.S. Trade Representative.

Wray says the FBI opens a new China counterintelligence investigation every12 hours. Last year, the U.S. government attributed a massive attack targeting Microsoft Exchange servers to the Chinese state actors.

"Across the Chinese state, in pretty much every major city, they have thousands of either Chinese government or Chinese government-contracted hackers who spend all day – with a lot of funding and very sophisticated tools – trying to figure out how to hack into companies networks… to try to steal their trade secrets," Wray noted.

https://www.yahoo.com/news/chinese-hack ... 02107.html
#15225723
Unthinking Majority wrote:This was common knowledge by now. Western security apparatuses are garbage, or just lazy.


In my experience, it's a lot more to do with lazy than garbage, but there is certainly garbage mixed in.
#15225814
Igor Antunov wrote:Says the premier industrial espionage spy in the 21st century and 20th centuries biggest IP thief, the US. Ask Britain, Japan and Germany all about it.

The medicine tastes bitter no?

Oh well it was never your IP so it can rightfully be taken. Stealing from thieves is morally justifiable.

I'll have to fully respond to this post later. My cheap Chinese knockoff laptop I bought off Amazon just caught fire and is now in the garbage where it belongs. Which isn't that bad considering it was stealing all of my online banking info.
#15225830
Rancid wrote:In my experience, it's a lot more to do with lazy than garbage, but there is certainly garbage mixed in.

Yeah probably. You'd think you wouldn't want your competitors stealing all your IP though, for the bottom line.
#15225838
Unthinking Majority wrote:I'll have to fully respond to this post later. My cheap Chinese knockoff laptop I bought off Amazon just caught fire and is now in the garbage where it belongs. Which isn't that bad considering it was stealing all of my online banking info.


You gonna toss the rest of your gear, considering it was all made in China, down to the last component?

Pro-tip; don't buy cheap anything. Especially food. Avoid cheap food. It's cheap for a reason.
#15225849
Unthinking Majority wrote:Yeah probably. You'd think you wouldn't want your competitors stealing all your IP though, for the bottom line.


Agree. However, many companies consider that the cost of doing business in/with China. Basically, for access to the Chinese market, losing some money in stolen IP (or selling it to China at bargain prices to get government approvals) is an ROI calculation. Most of the IP stolen is usually older and lower profit margin stuff. The cutting edge stuff tends to be better protected. I know of many instances of companies selling old IP to Chinese companies because "they're going to find a way to steal it anyway, might as well make some money on it". Last, just because you have the designs to some thing, doesn't mean you can actually manufacture, design supporting systems, debug, provide support on, enhance, etc. It's complex.

Anyway, this is how it used to work. I think companies are (finally) realizing there is a lot more risk when doing business with these types of countries (China, Russia). From what I can tell from being in the tech industry, at least some companies are starting to close up the leaks and are becoming more risk adverse to dealing with China/Chinese companies. I've mentioned on these forums that I have personally witnessed IP theft by the Chinese in the past (this is 10+ years ago now), no one gave a fuck back then. Not that long ago, I know of someone that got fired for leaking sensitive information (no IP, just sensitive information). I think 10-15 years ago, this person would not have been fired.

There is a slow acceptance that is happening, that doing business with China is a bigger risk than everyone thought. That said, many companies will continue to take the risk; they just love money too much.
#15225872
Potemkin wrote:@Wels - that’s just antisocial! :eh:

But it feels so right :excited:

I take it at the moment Russia is trying to overcome the net blockade of all those stolen ukrainian tractors brought to Chechenia. There are a lot of things you can do with those machines via external control, once the engine is started again.

It would be even more antisocial to put extended rfid chips in things intended to be stolen by Russia, and activate some built-in gizmos later.
Last edited by Wels on 06 May 2022 08:17, edited 1 time in total.
#15225873
Wels wrote:But it feels so right :excited:

I take it at the moment Russia is trying to overcome the net blockade of all those stolen ukrainian tractors brought to Chechenia. There are a lot of things you can do with those machines via external control.

It would be even more antisocial to put extended rfid chips in things intended to be stolen by Russia, and activate some built-in gizmos later.

I meant posting that wall of text on PoFo. Lol.
#15226215
Rancid wrote:Agree. However, many companies consider that the cost of doing business in/with China. Basically, for access to the Chinese market, losing some money in stolen IP (or selling it to China at bargain prices to get government approvals) is an ROI calculation. Most of the IP stolen is usually older and lower profit margin stuff. The cutting edge stuff tends to be better protected. I know of many instances of companies selling old IP to Chinese companies because "they're going to find a way to steal it anyway, might as well make some money on it". Last, just because you have the designs to some thing, doesn't mean you can actually manufacture, design supporting systems, debug, provide support on, enhance, etc. It's complex.

Anyway, this is how it used to work. I think companies are (finally) realizing there is a lot more risk when doing business with these types of countries (China, Russia). From what I can tell from being in the tech industry, at least some companies are starting to close up the leaks and are becoming more risk adverse to dealing with China/Chinese companies. I've mentioned on these forums that I have personally witnessed IP theft by the Chinese in the past (this is 10+ years ago now), no one gave a fuck back then. Not that long ago, I know of someone that got fired for leaking sensitive information (no IP, just sensitive information). I think 10-15 years ago, this person would not have been fired.

There is a slow acceptance that is happening, that doing business with China is a bigger risk than everyone thought. That said, many companies will continue to take the risk; they just love money too much.

Fascinating. Yeah everyone has sold out for the almightly dollar. Good short-term strategy, bad long-term strategy most likely. Only thing that matters is quarterly reports and stock price. We can just hope that mutual economic dependence prevents something like the Russia boycotts/sanctions with them, or the need for them.

I know that in my country many corporations used to outsource their call centers to India, where employees stole customer contact info and starting calling them with scams. Now all the call centers are domestic again.
#15226241
I don't care.

The concept of intellectual property is itself dumb, at least in the way the US government tries to apply it. I prefer Chinese shanzhai culture, as I think it better reflects how innovation actually happens. IP makes sense when one considers a single "great man" inventing some sort of revolutionary new product or design; this is historically rare, and I'm not convinced that the people and institutions that make these grand discoveries are motivated entirely by purely financial means, as Western IP law dictates. Most innovation is iterative, of small changes and improvements slowly building up. Strict IP laws that lock these small iterative innovations behind a legal monopoly ultimately delay the process and slow down innovation.

Release 1,000 copy-cats of a new smartphone, and yeah, 950 are probably strictly inferior. A few, though, may innovate in some small way - longer battery life, more durable screen, faster data processing, and so on. Hell, maybe it's just a guy who figured out how to manufacture it slightly cheaper. It's in the interest of the public that these innovations are in turn propogated onto the next 1,000 copy-cats as quickly as possible. This sort of attitude is probably why Shenzhen and other Chinese cities have become innovation hotspots and why China is a decade ahead of the US in implementing a lot of new technologies.

Western companies, such as Google, tend to do this in house anyway to get around IP laws - that's the whole purpose of "acquiring" these small tech companies; to get acccess to the legal monopoly these companies have over certain products. But this results in one or two giant firms gobbling up as much as they can, stifles innovation, and concentrates economic and political power in the hand one or two tech bros.

Weak companies can't compete, sure - but nothing is stopping these Western companies from going to China and "ripping off" local innovations (read: learn from their competitors and customers) except arrogance.

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