Chinese hacker group targets tech supply chain, report says

Over the past year, U.S. policymakers have paid increasing attention to threats facing the technology supply chain from foreign intelligence agencies. New evidence of a Chinese hacking group's links to Beijing could give law enforcement investigators and members of the new ammunition to crack down on economic espionage and threats to the technology supply chain.

Over the past two years, a mysterious group calling itself "Intrusion Truth" has been releasing blog posts providing detailed information about Chinese-linked hackings groups. Their latest findings purport to show that two Chinese nationals and a contracting firm associated with an Advanced Persistent Threat group named Stone Panda are actively working for or with the Chinese government. In particular, the group provides photo evidence, satellite imagery and even Uber receipts that show two individuals associated with Stone Panda regularly traveling to a Ministry of State Security compound in Tianjin, China. They also provided separate evidence purporting to show how the group uses contracting firms to recruit hackers on behalf of the Chinese government.

Crowdstrike, a U.S.-based cybersecurity and threat intelligence firm, said it has corroborated "several key pieces of information" and believes the findings are both credible and could significantly impact Chinese hacking efforts going forward.

"The exposure of Stone Panda as an [Ministry of Security Services] contractor would be another blow to China's current cyber operations given Stone Panda's prolific targeting of a variety of sectors, and may prompt an additional U.S. investigation at a tenuous time for Sino-U.S. relations during an ongoing trade war," analysts for the firm wrote on August 30.

Adam Meyers, vice president of intelligence at Crowdstrike, told FCW that while little is known about the identities or motivations behind Intrusion Truth, the group appears to have access to more than open source intelligence, and its previous work exposing the operations of another Chinese APT, Gothic Panda, have been largely borne out as accurate.

In fact, their work in 2017 helped lay the groundwork for a series of indictments in 2017 by the Department of Justice against another Chinese hacking group, dubbed Gothic Panda, and Chinese internet security firm Boyusec. Meyers believes a similar fate could await the individuals and entities identified in the group's latest disclosure.

"I would not say it's outside the realm of possibility that you see that this company [and individuals] end up getting indicted or they get added to some sort of sanctions list," Meyers said.

Meyers said Intrusion Truth's past record, combined with Crowdstrike's own research, indicates that the findings are credible. While researchers and governments have long suspected that Stone Panda was linked to China, evidence linking members of the hacking group to a specific Chinese Ministry of State Security field office could allow policymakers to enact criminal, diplomatic or economic sanctions against Beijing. At the very least, it could expose the individuals and entities, who, researchers say, work primarily on targeting and compromising U.S. and Western technology supply chains and upstream providers, to future criminal charges from U.S. investigators.

The Department of Justice did not immediately respond to a request for comment on the findings.

Stone Panda is one of several Chinese APT groups charged with targeting supply chain vulnerabilities in the software, shared services and telecommunications industries. Meyers said the findings provide another example demonstrating how China has slowly ramped back up its cyber economic espionage in recent years despite a 2015 bilateral agreement between the U.S. and China to mutually curb such activities. He said it also indicates the extent which China is relying on third-party security contracting companies to carry out their espionage work.

After Intrusion Truth posted its findings online, Crowdstrike noticed that several of the named individuals began scrubbing and deleting their social media accounts and other aspects of their online footprint. Meyers believes now that the group is exposed, it will likely go underground and dormant, at least temporarily, while members rebuild their operational security and anonymity.

In its public actions, the Trump administration has generally relied on a two-pronged strategy for imposing consequences on malicious foreign-backed hacking groups. First, it has leveraged the technical and intelligence resources of the federal government to identify, attribute and publicly blame nations for high-profile cyberattacks. It has then typically followed up those actions by tacking on criminal, economic and diplomatic sanctions against the host country as well as the individuals and entities involved.

"When individuals become exposed or indicted in this way, it pretty much limits their ability to travel outside of China," said Meyers. "It makes the world a smaller place for them and acts as something that certainly disincentivizes others from getting into this line of work if they have more worldly aspirations."