US, China battle over hack of Microsoft Exchange email | #microsoft | #hacking | #cybersecurity


The Justice Department announced charges against four Chinese nationals who prosecutors said worked with the MSS to target computers at companies, universities and government entities. The defendants are accused of targeting trade secrets, scientific technologies and infectious-disease research. Image U.S. Department of Justice, FBI

BEIJING (AP) — China rejected an accusation by the Biden administration and Western allies this week that Beijing is to blame for a hack of the Microsoft Exchange email system and complained Chinese entities are victims of damaging U.S. cyberattacks.

A foreign ministry spokesman demanded Washington drop charges announced Monday against four Chinese nationals accused of working with the Ministry of State Security to try to steal U.S. trade secrets, technology and disease research.

The announcement that the Biden administration and European allies formally blame Chinese government-linked hackers for ransomware attacks increased pressure over long-running complaints against Beijing but included no sanctions.

“The United States ganged up with its allies to make unwarranted accusations against Chinese cybersecurity,” said the spokesman, Zhao Lijian. “This was made up out of thin air and confused right and wrong. It is purely a smear and suppression with political motives.”

“China will never accept this,” Zhao said, though he gave no indication of possible retaliation.

China is a leader in cyberwarfare research along with the United States and Russia, but Beijing denies accusations that Chinese hackers steal trade secrets and technology. Security experts say the military and security ministry also sponsor hackers outside the government.

On Monday, U.S. authorities said government-affiliated hackers targeted American and other victims with demands for millions of dollars. Officials alleged contract hackers associated with the MSS engaged in extortion schemes and theft for their own profit.

Microsoft Corp. blamed Chinese spies for the Microsoft Exchange attack that compromised tens of thousands of computers around the world. The British foreign secretary, Dominic Raab, on Monday called that “a reckless but familiar pattern of behavior.”

Also Monday, the Justice Department announced charges against four Chinese nationals who prosecutors said worked with the MSS to target computers at companies, universities and government entities. The defendants are accused of targeting trade secrets, scientific technologies and infectious-disease research.

“China firmly opposes and combats any form of cyberattacks, and will not encourage, support or condone any cyberattacks,” Zhao said.

Citing what he said was Chinese cybersecurity research, Zhao accused the U.S. Central Intelligence Agency of carrying out hacking attacks on China’s aerospace research facilities, oil industry, internet companies and government agencies over an 11-year period.

Those attacks “severely compromised” national and economic security, Zhao said.

“China once again strongly demands that the United States and its allies stop cyber theft and attacks against China, stop throwing mud at China on cybersecurity issues and withdraw the so-called prosecution,” he said. “China will take necessary measures to firmly safeguard China’s cybersecurity and interests.”

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WASHINGTON (AP) — The Biden administration and Western allies formally blamed China on Monday for a massive hack of Microsoft Exchange email server software and asserted that criminal hackers associated with the Chinese government have carried out ransomware and other illicit cyber operations.

The announcements, though not accompanied by sanctions against the Chinese government, were intended as a forceful condemnation of activities a senior Biden administration official described as part of a “pattern of irresponsible behavior in cyberspace.” They highlighted the ongoing threat from Chinese hackers even as the administration remains consumed with trying to curb ransomware attacks from Russia-based syndicates that have targeted critical infrastructure.

The broad range of cyberthreats from Beijing disclosed on Monday included a ransomware attack from government-affiliated hackers that has targeted victims — including in the U.S. — with demands for millions of dollars. U.S officials also alleged that criminal contract hackers associated with China’s Ministry of State Security have engaged in cyber extortion schemes and theft for their own profit.

Meanwhile, the Justice Department on Monday announced charges against four Chinese nationals who prosecutors said were working with the MSS in a hacking campaign that targeted dozens of computer systems, including companies, universities and government entities. The defendants are accused of stealing trade secrets and confidential business information.

Unlike in April, when public finger-pointing of Russian hacking was paired with a raft of sanctions against Moscow, the Biden administration did not announce any actions against Beijing. Nonetheless, a senior administration official who briefed reporters said that the U.S. has confronted senior Chinese officials and that the White House regards the multination shaming as sending an important message.

President Joe Biden told reporters “the investigation’s not finished,” and White House press secretary Jen Psaki did not rule out consequences for China, saying, “This is not the conclusion of our efforts as it relates to cyber activities with China or Russia.”

Even without fresh sanctions, Monday’s actions are likely to exacerbate tensions with China at a delicate time. Just last week, the U.S. issued separate stark warnings against transactions with entities that operate in China’s western Xinjiang region, where China is accused of repressing Uyghur Muslims and other minorities.

Then on Friday, the administration advised American firms of the deteriorating investment and commercial environment in Hong Kong, where China has been cracking down on democratic freedoms it had pledged to respect in the former British colony.

The European Union and Britain also called out China. The EU said malicious cyber activities with “significant effects” that targeted government institutions, political organizations and key industries in the bloc’s 27 member states could be linked to Chinese hacking groups. The U.K.’s National Cyber Security Centre said the groups targeted maritime industries and naval defense contractors in the U.S. and Europe and the Finnish parliament.

In a statement, EU foreign policy chief Josep Borrell said the hacking was “conducted from the territory of China for the purpose of intellectual property theft and espionage.”

The Microsoft Exchange cyberattack “by Chinese state-backed groups was a reckless but familiar pattern of behaviour,” U.K. Foreign Secretary Dominic Raab said.

NATO, in its first public condemnation of China for hacking activities, called on Beijing to uphold its international commitments and obligations “and to act responsibly in the international system, including in cyberspace.” The alliance said it was determined to “actively deter, defend against and counter the full spectrum of cyber threats.”

That hackers affiliated with the Ministry of State Security were engaged in ransomware was surprising and concerning to the U.S. government, the senior administration official said. But the attack, in which an unidentified American company received a high-dollar ransom demand, also gave U.S. officials new insight into what the official said was “the kind of aggressive behavior that we’re seeing coming out of China.”

The majority of the most damaging and high-profile recent ransomware attacks have involved Russian criminal gangs. Though the U.S. has sometimes seen connections between Russian intelligence agencies and individual hackers, the use of criminal contract hackers by the Chinese government “to conduct unsanctioned cyber operations globally is distinct,” the official said.

Dmitri Alperovitch, the former chief technology officer of the cybersecurity firm Crowdstrike, said the announcement makes clear that MSS contractors who for years have worked for the government and conducted operations on their behalf have over time decided — either with the approval or the “blind eye of their bosses” — to ”start moonlighting and engaging in other activities that could put money in their pockets.”

The Microsoft Exchange hack that months ago compromised tens of thousands of computers around the world was swiftly attributed to Chinese cyber spies by private sector groups. An administration official said the government’s attribution to hackers affiliated with the Ministry of State Security took until now in part because of the discovery of the ransomware and for-profit hacking operations and because the administration wanted to pair the announcement with guidance for businesses about tactics that the Chinese have been using.

Given the scope of the attack, Alperovitch said it was “puzzling” that the U.S. avoided sanctions.

“They certainly deserve it, and at this point, it’s becoming a glaring standout that we have not,” he said.

He added, in a reference to a large Russian cyberespionage operation discovered late last year, “There’s no question that the Exchange hacks have been more reckless, more dangerous and more disruptive than anything the Russians have done in SolarWinds.

A spokesperson for the Chinese Embassy in Washington did not immediately return an email seeking comment Monday. But a Chinese Foreign Ministry spokesperson has previously deflected blame for the Microsoft Exchange hack, saying that China “firmly opposes and combats cyber attacks and cyber theft in all forms” and cautioning that attribution of cyberattacks should be based on evidence and not “groundless accusations.”



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