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US military access cards cracked by Chinese hackers

Access to buildings and intranets harvested by super-spy Trojan

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A new strain of the Sykipot Trojan is been used to compromise the Department of Defense-sanctioned smart cards used to authorise network and building access at many US government agencies, according to security researchers.

Smart cards are a standard means of granting active duty military staff, selected reserve personnel, civilian employees and eligible contractors access to intranets at US Army, Navy and the Air Force facilities. They can be used to get into buildings or, when used in conjunction with a static password, to access networks.

Chinese hackers have adapted the Sykipot Trojan to lift card credentials from compromised systems in order to access classified military networks, according to researchers at security tools firm AlienVault. An adapted version of the Trojan targets PCs attached to smart card readers running ActivClient, the client application of ActivIdentity, in what's been described as a 'smart card proxy' attack.

The Sykipot Trojan was first created three years ago and featured in a number of industrial espionage-style attacks. Researchers at AlienVault captured an adapted version of the malware - specifically designed to circumvent authentication technology supplied by ActivIdentity - in a honeypot around two weeks ago. Subsequent analysis suggests that hackers added a smart card module to existing malware around March 2011.

The development of super-spy software

AlienVault reckons the new strain of Sykipot Trojan was developed by the same Chinese authors that created earlier versions of the malware, first seen around three years ago. Previous builds of the Trojan were promoted by spammed messages that posed as information about the next-generation of US Air Force drones. In reality the message pointed at drive-by-download sites that featured the Sykipot Trojan as a payload and took advantage of various IE and Adobe Reader security flaws, as explained in more detail here.

The malware featured in targeted attacks against aerospace technology firms, among others, that were ultimately designed to extract commercially sensitive information from compromised systems.

The latest run of attacks also features spear phishing emails that attempt to trick marks into clicking on a link that deposits the Sykipot malware onto their machines. This time around the malware uses a key-logger to steal PINs associated with smart cards. Once attackers have authentication codes and associated PINs they gain the same level of trusted access to sensitive networks as the user whose credentials they have stolen.

The cyber-criminals behind the attack are using a version of Sykipot first baked in March 2011 that has featured in dozens of attacks since, according to AlienVault.

Jaime Blasco, AlienVault’s lab manager, told El Reg that Chinese messages in embedded code, the use of command and control servers in China as well as the use of exclusive use of the software in China all provide evidence that Chinese hackers are ultimately behind the attack. Blasco added that the use of dynamic tokens that offer two-factor authentication would thwart this particular line of attack.

AlienVault supplies security event logging technology and does not compete with ActivIdentity. Blasco said it had not supplied either ActivIdentity nor the DoD with malware samples or notification of its research, which was first publicised via an article in the New York Times on Thursday. ActivIdentity's smart cards are standard issue at the DoD and a number of other US government agencies. Other users include Monsanto, BNP Paribas and Air France, the NYT adds.

In response to AlienVault's research, ActivIdentity said in a statement: "We are aware of the recent reports that purportedly identified a new attack method that could hijack smart card-based certificates.

"We take these reports very seriously and are working diligently to investigate the potential threat. At this time, we are confident that the purported threat poses no immediate risk to our customers." ®

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