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South Korea: Chinese address source of attack

Thursday - 3/21/2013, 2:44am  ET

Depositors leave after checking their accounts through automated teller machines of Shinhan Bank at a subway station as the bank's computer networks was paralyzed in Seoul, South Korea, Wednesday, March 20, 2013. Police and South Korean officials were investigating the simultaneous shutdown Wednesday of computer networks at several major broadcasters and banks. While the cause wasn't immediately clear, speculation centered on a possible North Korean cyberattack. (AP Photo/Ahn Young-joon)

SAM KIM
Associated Press

SEOUL, South Korea (AP) -- A Chinese Internet address was the source of a cyberattack on one company hit in a massive network shutdown that affected 32,000 computers at six banks and media companies in South Korea, initial findings indicated Thursday.

It's too early to assign blame -- Internet addresses can easily be manipulated and the investigation could take weeks -- but suspicion for Wednesday's shutdown quickly fell on North Korea, which has threatened Seoul and Washington with attack in recent days because of anger over U.N. sanctions imposed for its Feb. 12 nuclear test.

South Korean regulators said they believe the attacks came from a "single organization," but they've still not finished investigating what happened at the other companies.

Experts say hackers often attack via computers in other countries to hide their identities. South Korea has previously accused North Korean hackers of using Chinese addresses to infect their networks.

"We do know that North Korea does route attacks through Chinese servers because that's the only way they can communicate with South Korea," Timothy Junio, a cybersecurity fellow at Stanford University's Center for International Security and Cooperation, said. "It's not surprising there's a Chinese IP address involved."

Seoul believes North Korea runs an Internet warfare unit aimed at hacking U.S. and South Korean government and military networks to gather information and disrupt service.

The attack Wednesday caused computer networks at major banks and top TV broadcasters to crash simultaneously. It paralyzed bank machines across the country and raised fears that this heavily Internet-dependent society was vulnerable. On Thursday, only one of the attacked banks, Shinhan, was fully online, officials said.

A Chinese address created the malicious code in the server of Nonghyup bank, according to an initial analysis by the state-run Korea Communications Commission, South Korea's telecom regulator.

KCC spokesman Cho Kyeong-sik said investigators are analyzing the log-in records and the malicious code collected from the infected servers and computers. It could take at least four to five days for the infected computers to recover fully, he said. Experts say the entire investigation could take weeks.

South Korean regulators have also distributed vaccine software to government offices, banks, hospitals and other institutions to prevent more outages.

In an indication of the high tension on the Korean Peninsula, South Korean media reported that North Korea sounded air-raid warnings in radio broadcasts Thursday morning as part of military drills.

The network paralysis took place just days after North Korea accused South Korea and the U.S. of staging a cyberattack that shut down its websites for two days last week. Loxley Pacific, the Thailand-based Internet service provider, confirmed the North Korean outage but did not say what caused it. South Korea denied the allegation.

The attack may have also extended to the United States. Greg Scarlatoiu, executive director of the U.S.-based Committee for Human Rights in North Korea, said he discovered early Wednesday that their website had been hacked. They have yet to establish who was behind it but strongly suspect it came from North Korea.

Several of the committee's publications, including lengthy reports with satellite imagery of North Korean prison camps, had been removed, along with biographies of their staff and board, and their policy recommendations to the Obama administration.

The South Korean shutdown did not affect government agencies or sensitive targets such as power plants or transportation systems, and there were no immediate reports that bank customers' records were compromised, but the disruption froze part of the country's commerce.

Some customers were unable to use the debit or credit cards that many rely on more than cash. At one Starbucks in downtown Seoul, customers were asked to pay for their coffee in cash, and lines formed outside disabled bank machines.

Broadcasters KBS and MBC still didn't have full computer use on Thursday, but the shutdown did not affect TV broadcasts.

The YTN cable news channel also said the company's internal computer network was paralyzed. Footage showed workers staring at blank computer screens.

KBS employees said they watched helplessly as files stored on their computers began disappearing.

Last year, North Korea threatened to attack several news companies, including KBC and MBC, over their reports critical of children's' festivals in the North.

"If it plays out that this was a state-sponsored attack, that's pretty bald faced and definitely an escalation in the tensions between the two countries," said James Barnett, former chief of public safety and homeland security for the U.S. Federal Communications Commission.

An ominous question is what other businesses, in South Korea or elsewhere, may also be in the sights of the attacker, said Barnett, who heads the cybersecurity practice at Washington law firm Venable.

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