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IoT Ransomware against Austrian Hotel

Attackers held an Austrian hotel network for ransom, demanding $1,800 in bitcoin to unlock the network. Among other things, the locked network wouldn’t allow any of the guests to open their hotel room doors.

I expect IoT ransomware to become a major area of crime in the next few years. How long before we see this tactic used against cars? Against home thermostats? Within the year is my guess. And as long as the ransom price isn’t too onerous, people will pay.

EDITED TO ADD: There seems to be a lot of confusion about exactly what the ransomware did. Early reports said that hotel guests were locked inside their rooms, which is of course ridiculous. Now some reports are saying that no one was locked out of their rooms.

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The Limits of Police Subterfuge

“The next time you call for assistance because the Internet service in your home is not working, the ‘technician’ who comes to your door may actually be an undercover government agent. He will have secretly disconnected the service, knowing that you will naturally call for help and — ­when he shows up at your door, impersonating a technician­ — let him in. He will walk through each room of your house, claiming to diagnose the problem. Actually, he will be videotaping everything (and everyone) inside. He will have no reason to suspect you have broken the law, much less probable cause to obtain a search warrant. But that makes no difference, because by letting him in, you will have ‘consented’ to an intrusive search of your home.”

This chilling scenario is the first paragraph of a motion to suppress evidence gathered by the police in exactly this manner, from a hotel room. Unbelievably, this isn’t a story from some totalitarian government on the other side of an ocean. This happened in the United States, and by the FBI. Eventually — I’m sure there will be appeals — higher U.S. courts will decide whether this sort of practice is legal. If it is, the country will slide even further into a society where the police have even more unchecked power than they already possess.

The facts are these. In June, Two wealthy Macau residents stayed at Caesar’s Palace in Las Vegas. The hotel suspected that they were running an illegal gambling operation out of their room. They enlisted the police and the FBI, but could not provide enough evidence for them to get a warrant. So instead they repeatedly cut the guests’ Internet connection. When the guests complained to the hotel, FBI agents wearing hidden cameras and recorders pretended to be Internet repair technicians and convinced the guests to let them in. They filmed and recorded everything under the pretense of fixing the Internet, and then used the information collected from that to get an actual search warrant. To make matters even worse, they lied to the judge about how they got their evidence.

The FBI claims that their actions are no different from any conventional sting operation. For example, an undercover policeman can legitimately look around and report on what he sees when he invited into a suspect’s home under the pretext of trying to buy drugs. But there are two very important differences: one of consent, and the other of trust. The former is easier to see in this specific instance, but the latter is much more important for society.

You can’t give consent to something you don’t know and understand. The FBI agents did not enter the hotel room under the pretext of making an illegal bet. They entered under a false pretext, and relied on that for consent of their true mission. That makes things different. The occupants of the hotel room didn’t realize who they were giving access to, and they didn’t know their intentions. The FBI knew this would be a problem. According to the New York Times, “a federal prosecutor had initially warned the agents not to use trickery because of the ‘consent issue.’ In fact, a previous ruse by agents had failed when a person in one of the rooms refused to let them in.” Claiming that a person granting an Internet technician access is consenting to a police search makes no sense, and is no different than one of those “click through” Internet license agreements that you didn’t read saying one thing and while meaning another. It’s not consent in any meaningful sense of the term.

Far more important is the matter of trust. Trust is central to how a society functions. No one, not even the most hardened survivalists who live in backwoods log cabins, can do everything by themselves. Humans need help from each other, and most of us need a lot of help from each other. And that requires trust. Many Americans’ homes, for example, are filled with systems that require outside technical expertise when they break: phone, cable, Internet, power, heat, water. Citizens need to trust each other enough to give them access to their hotel rooms, their homes, their cars, their person. Americans simply can’t live any other way.

It cannot be that every time someone allows one of those technicians into our homes they are consenting to a police search. Again from the motion to suppress: “Our lives cannot be private — ­and our personal relationships intimate­ — if each physical connection that links our homes to the outside world doubles as a ready-made excuse for the government to conduct a secret, suspicionless, warrantless search.” The resultant breakdown in trust would be catastrophic. People would not be able to get the assistance they need. Legitimate servicemen would find it much harder to do their job. Everyone would suffer.

It all comes back to the warrant. Through warrants, Americans legitimately grant the police an incredible level of access into our personal lives. This is a reasonable choice because the police need this access in order to solve crimes. But to protect ordinary citizens, the law requires the police to go before a neutral third party and convince them that they have a legitimate reason to demand that access. That neutral third party, a judge, then issues the warrant when he or she is convinced. This check on the police’s power is for Americans’ security, and is an important part of the Constitution.

In recent years, the FBI has been pushing the boundaries of its warrantless investigative powers in disturbing and dangerous ways. It collects phone-call records of millions of innocent people. It uses hacking tools against unknown individuals without warrants. It impersonates legitimate news sites. If the lower court sanctions this particular FBI subterfuge, the matter needs to be taken up — ­and reversed­ — by the Supreme Court.

This essay previously appeared in The Atlantic.

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FBI Agents Pose as Repairmen to Bypass Warrant Process

This is a creepy story. The FBI wanted access to a hotel guest’s room without a warrant. So agents broke his Internet connection, and then posed as Internet technicians to gain access to his hotel room without a warrant.

From the motion to suppress:

The next time you call for assistance because the internet service in your home is not working, the “technician” who comes to your door may actually be an undercover government agent. He will have secretly disconnected the service, knowing that you will naturally call for help and — when he shows up at your door, impersonating a technician — let him in. He will walk through each room of your house, claiming to diagnose the problem. Actually, he will be videotaping everything (and everyone) inside. He will have no reason to suspect you have broken the law, much less probable cause to obtain a search warrant. But that makes no difference, because by letting him in, you will have “consented” to an intrusive search of your home.

Basically, the agents snooped around the hotel room, and gathered evidence that they submitted to a magistrate to get a warrant. Of course, they never told the judge that they had engineered the whole outage and planted the fake technicians.

More coverage of the case here.

This feels like an important case to me. We constantly allow repair technicians into our homes to fix this or that technological thingy. If we can’t be sure they are not government agents in disguise, then we’ve lost quite a lot of our freedom and liberty.

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Sophisticated Targeted Attack Via Hotel Networks

Kaspersky Labs is reporting (detailed report here, technical details here) on a sophisticated hacker group that is targeting specific individuals around the world. “Darkhotel” is the name the group and its techniques has been given.

This APT precisely drives its campaigns by spear-phishing targets with highly advanced Flash zero-day exploits that effectively evade the latest Windows and Adobe defenses, and yet they also imprecisely spread among large numbers of vague targets with peer-to-peer spreading tactics. Moreover, this crew’s most unusual characteristic is that for several years the Darkhotel APT has maintained a capability to use hotel networks to follow and hit selected targets as they travel around the world. These travelers are often top executives from a variety of industries doing business and outsourcing in the APAC region. Targets have included CEOs, senior vice presidents, sales and marketing directors and top R&D staff. This hotel network intrusion set provides the attackers with precise global scale access to high value targets. From our observations, the highest volume of offensive activity on hotel networks started in August 2010 and continued through 2013, and we are investigating some 2014 hotel network events.

Good article. This seems pretty obviously a nation-state attack. It’s anyone’s guess which country is behind it, though.

Targets in the spear — phishing attacks include high-profile executives — among them a media executive from Asia­as well as government agencies and NGOs and U.S. executives. The primary targets, however, appear to be in North Korea, Japan, and India. “All nuclear nations in Asia,” Raiu notes. “Their targeting is nuclear themed, but they also target the defense industry base in the U.S. and important executives from around the world in all sectors having to do with economic development and investments.” Recently there has been a spike in the attacks against the U.S. defense industry.

We usually infer the attackers from the target list. This one isn’t that helpful. Pakistan? China? South Korea? I’m just guessing.

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