New and Improved: Hybrid Chinese IP Theft Model

There’s a subplot to my previous post, “Arsenal Employed by Chinese State IP Thieves Have no Moral Limits,” about the four Chinese State IP thieves recently indicted who conspired with Chinese universities to steal.

The criminals also used a different model. A more expansive model. A model that appears to mimic what the Russians have been doing for some time.

Here’s a quote from a recent New York Times article titled, “Spies for Hire: China’s New Breed of Hackers Blends Espionage and Entrepreneurship,”

“This new group of hackers has made China’s state cyberspying machine stronger, more sophisticated and — for its growing array of government and private-sector targets — more dangerously unpredictable. Sponsored but not necessarily micromanaged by Beijing, this new breed of hacker attacks government targets and private companies alike, mixing traditional espionage with outright fraud and other crimes for profit.“

The “new and improved” Chinese hybrid IP theft model does not just rely on the Ministry of State Security (MSS) or People’s Liberation Army (PLA) hackers. The Chinese have now embraced freelance hackers to supplement their military or state security IP theft operations..

As we know, it has embarrassed Beijing over the years when the U.S. has connected various hacks directly with their MSS or PLA.

And like the Russians, the freelance hackers are free to torment any other targets they like, as long as they do not target victims in their own countries.

The new model gives the Chinese, as it does for the Russians, plausible deniability.

Here’s another quote from the New York Times Article:

“Under this system, Chinese hackers have become increasingly aggressive. The rate of global attacks linked to the Chinese government has nearly tripled since last year compared with the four previous years, according to Recorded Future, a Somerville, Mass., company that studies the use of internet by state-linked actors. That number now averages more than 1,000 per three-month period, it said.”

And that should alarm us not just because of the exponential increase of Chinese state-sponsored hacks, but because victims must now confront hackers that—not just steal for the benefit of the Chinese government—but now must sometimes navigate Chinese hackers who will then extort them to line their own pockets.

A few other New York Times quotes:

“A grand jury indictment released last year charged that two former classmates from an electrical engineering college in Chengdu, in southwest China, marauded through foreign computer servers and stole information from dissidents and engineering diagrams from an Australian defense contractor.

“On the side, the indictment said, the two tried extortion: demanding payment in return for not revealing an unidentified company’s source code on the internet.”

“… ‘said Robert Potter, the head of Internet 2.0, an Australian cybersecurity firm. “I’ve seen them do some really boneheaded things, like try and steal $70,000 during an espionage op.’”

FINAL THOUGHT

Boneheaded, maybe. But it sure makes it tougher for victims to navigate.

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