Gray War: The Cyber Cold War

For the most part, nation states or state-sponsored actors don’t generally appear on our security operations radar. Or, that used to be the case. More frequently, we are seeing these highly skilled and armed adversaries playing below the typical strata of the global stage. This means David better be prepared to thwart Goliath.

I have often spoken about the Triad that drives cybersecurity policies and programs. We quickly identify the cybersecurity adversaries as the first. Their sophisticated attacks plague businesses and create a kinetic drive for cyber resilience. But it’s not just external factors that affect our cyberthreat profile. We ourselves introduce risks in the form of emerging technology in our move to omniscient digital connectivity and a fully distributed work model. With the benefits of cloud and artificial intelligence comes risk of misconfiguration, misuse and outright abuse. And the third leg of the triangle is formed in terms of accountability, with a shift from regulatory compliance to market-directed contractual obligations, insurance mandated minimum standards and reputational damage.

But it’s a game of three dimensional chess we play. And the new Z-axis is drawn by nation states moving to target non-combatant businesses like small banks, law firms, hospitals and non-government supplier manufacturers.

At a recent National Association of Manufacturing cyber event, I was privileged to speak with Jacob Helberg, a senior advisor at Stanford University Cyber Policy Center. He has also advised Google and other major players on cyber risk.

He introduced a new term: “gray zones,” as a means of describing countries with limited societal freedom controlled by autocratic rulership. These countries like China, Russia and Iran seek to achieve their objectives using non-military means.

Gray zone attacks are often hard to attribute, inexpensive to launch and extremely impactful.

This non-kinetic strategy robs target countries of their ability to deter attacks using the threat of their military superiority. With the playing field level, these gray assaults are difficult to counter.

As he spoke, I could only compare his concerns to the Post World War II, cold-war tensions between the superpowers of the East and West. Rather than the black and white fear of nuclear devastation, it's a gray world of cyber espionage, theft and disruption. However the gray version can be quite devastating when applied to critical infrastructure.

Our security operations have seen nation states targeting mid-market firms (read more) and these attacks seem to follow major global events. As a result, organizations feel the aftershocks of the tectonic political events like the missile exchanges in the Middle East, trade wars with China and even the Australian government alerting its population to the fact that it is under attack by an unnamed nation.

Our 2019 Threat Intelligence Report highlights a rise in espionage and theft as a result of nation state threat actors.

Nation states have been accused of spreading misinformation to tamper with elections (read the U.S. Senate’s Select Committee on Intelligence’s report), spread disinformation through social networks or create anxiety by muddying the waters during the Covid-19 pandemic. Depending on your political view, this activity is viewed as an annoyance or an organized effort with dangerous results.

Yet there is little doubt that many nation states use malware as a reconnaissance device or weapon delivery platform in preparation for potential cyberwarfare. From our vantage point, the vast majority of nationally sponsored cybersecurity incidents take the form of espionage through data exfiltration. Sometimes their mission is to test the ability to disrupt critical systems like water supply or communications. Other times it’s simply stealing money to fund their operations.

Unfortunately, the best way to steal funds from businesses is often through fraudulent invoicing and funds transfer, or ransomware. It’s a three channel revenue stream: steal and resell valuable assets and information, use coordinated ransomware attacks to disable operations and demand money to return the company to normal operations after locking all computer systems, and extort payments to keep the whole event from the public eye.

And their techniques are hard to detect. They often use your own tools against you (called, “living off the land”) and pose a much greater risk than typical opportunistic and transactional ransomware attacks. The old model infected one device, detonated and locked files as a means of extorting a modest payment in cryptocurrency.

The new, “Hands-on-Keyboard,” attacks depend on stealth and patience to infiltrate the entire organization, steal all valuable assets and then detonate ransomware through the entire operation to bring your business to its knees. It sounds like science fiction, somewhere between Jason Bourne and an invasion of xenophobic aliens bent on depleting the Earth of its natural resources. But it’s not fiction. Life imitates art in this case. And the enemy is terrestrial, not from another solar system.These attacks are incredibly damaging. According to the head of claims for the insurance group Coalition, Catherine Lyle, ransomware and fraudulent funds transfers comprise 90 percent of all claims. And these claims have risen two to three times since the beginning of 2020.

Much like the Cold War, it’s not good enough to defend your borders. You have to assume the enemy will penetrate your sovereign territory. When the Soviet Union flew nuclear bombers into airspace over North America or western Europe, NATO forces raced to intercept them and drive them out. The point was to demonstrate that Soviet bombers could not penetrate our airspace without being shot down before they could drop their payload on our cities. Deterrence by denial.

In part two, I will lead a deep-dive into one story about a nation state attack against a client and how our security operations detected and responded to the threat before it became business disrupting.