United States: Cybersecurity 2018 – The Year In Preview: Emerging Security Threats

Last Updated: November 16 2017
Article by Erik L. Schulwolf

Editors' Note: This is the second of a multi-part end-of-year series examining important trends in data privacy and cybersecurity during the coming year. Click here for our previous entry on HIPAA Compliance. Up next: trends in federal enforcement.

After one of Britain's first victories in the Second World War, Winston Churchill declared that it was "perhaps, the end of the beginning" – a turning point in the war. The same, unfortunately, cannot be said of the battle against the cybersecurity threats that have bedeviled governments and businesses in recent years. The primary threats on the horizon for 2018 are not novel dangers so much as existing threats coming from more places as the world becomes more connected and bad actors more sophisticated. Governments and the business community will have to invest the resources necessary to keep pace with the growth of the threat landscape – or at least to maintain the ability to keep the damage to acceptable levels – if they are to prevent the havoc caused by cyberattacks from getting worse in the years to come.

Internet of Things: Boundless Opportunity, Metastasizing Threat.

It is no exaggeration to say that the Internet of Things is the most important macro-level technological development since the Internet itself. With 46 trillion connected devices expected to be in use by 2021, the IoT will revolutionize industry, medicine, infrastructure, and myriad other fields. As more and more devices become interconnected, however, the number of "backdoor[s] into personal and corporate privacy" multiplies. Complicating this further is the fact that many of the companies making IoT devices are not traditional software companies, and may not appreciate the importance of cybersecurity, especially when it comes to ensuring that their products can be updated and patched in response to threats. This is particularly problematic as many "smart" devices likely have a substantially longer life expectancy than your average computer software, and thus have to be nimble enough to respond to threats that today we likely cannot imagine.

Moreover, the industries in which the IoT holds the greatest promise are often the ones in which security is the biggest concern. Smart medical devices and health mobile apps can vastly improve efficiency in medicine, but, as one Deloitte partner notes, "[l]egacy devices can have outdated operating systems and may be on hospital networks without proper security controls" – which can enable threats like ransomware a way in to compromise entire systems. Likewise, smart cities "generate a slew of security nightmares that are unmatched by any other technological development" with traffic control and other infrastructure potentially vulnerable to hackers. The December 2016 attack by Russian hackers on an electricity control center, which shut off the lights for portions of Kiev, is a sobering reminder of the many avenues that urban infrastructure affords to cybercriminals and terrorists.

Perhaps most worrisome is the growing threat of Botnets. A botnet is a network of infected machines controlled by the attacker. With the number of connected devices ballooning as a result of the IoT's growth, the opportunities for bad actors to recruit these bot "armies" are similarly proliferating. The world got a taste of the chaos that IoT botnets could cause when the Mirai botnet used hijacked CCTV cameras to cripple the Internet infrastructure company Dyn in October 2016. In recent weeks, security researchers have been raising the alarm about a new botnet called the "IoT Reaper", which some estimate to have recruited hundreds of thousands of devices. It remains unclear to what use Reaper will be put. Nonetheless, as the number of IoT devices grows into the trillions, we can expect botnets such as Reaper to grow even easier to recruit and more powerful when unleashed.

To date, as David Holmes notes in Security Week, "[l]ike the original Internet, the Internet of Things has grown somewhat organically with apparently very little consideration for security." Recent legislation in Congress seeks to remedy that. The Internet of Things Cybersecurity Act of 2017 (S. 1691), introduced by a bipartisan group of senators on August 1, would require IoT devices purchased by federal agencies to meet minimum cybersecurity standards, including patchability, and would create an exception to the Computer Fraud and Abuse Act for cybersecurity researchers complying with certain guidelines. At the time of introduction, Security Week reported that the legislation was "generally considered to be a useful and valuable start to solving the IoT security problem." More recently, on October 27, Representative Ted Lieu (D-CA) and Senator Edward Markey (D-MA) introduced the Cyber Shield Act of 2017, under which the Department of Commerce would establish voluntary cybersecurity standards for IoT devices and label compliant devices. Although these initiatives represent possible steps forward in coping with the burgeoning threat from the IoT, it remains to be seen whether more comprehensive and/or mandatory measures will be needed.

Whither the Ransomware Epidemic?

After beginning to emerge as a problem, especially in the health care sector, in recent years, Ransomware burst into the public consciousness in spectacular fashion in 2017 with the massive WannaCry and NotPetya attacks, which used technology stolen from the United States National Security Agency to cripple institutions such as Britain's National Health Service and Germany's DeutscheBahn railway company. WannaCry and NotPetya made front page news and led government agencies such as the United States Computer Emergency Readiness Team to update guidance to businesses on ransomware. In recent weeks, another sizeable ransomware attack, which used a strain called BadRabbit that posed as an Adobe Flash update, caused some havoc, although its effects were mainly localized to Ukraine and Russia. BadRabbit has been found to use the same EternalRomance NSA exploit as NotPetya, and some suspect the authors of the two ransomware attacks to be the same.

BadRabbit did not spread as widely as WannaCry or NotPetya, and security researchers were able to find an early "vaccine" for the strain. It remains to be seen whether BadRabbit's more limited impact is an indicator that the cybersecurity field is beginning to catch up with the ransomware threat, or at least the variants that derive from NSA exploits leaked by the Shadow Brokers. It seems unlikely, however, that the ransomware "business model" is going away anytime soon, especially as the Internet of Things promises to proliferate entry points into networks for bad actors seeking ransom.

One area that has been particularly hard-hit by ransomware has been the health care sector, with one 2016 report indicating that 88% of ransomware attacks hit healthcare organizations. Recognizing this problem, in 2017 the U.S. Department of Health and Human Services established the Healthcare Cybersecurity and Communications Integration Center (HCCIC). Some commentators have praised the idea of the new HCCIC, reasoning that it represents "an optimal and efficient solution to decreasing the vulnerability and exploitability of a siloed sector that has been too long starved for objective sector-specific attention and assistance." Others, however, have criticized the new Center as duplicative of the Department of Homeland Security's existing National Cybersecurity and Communications Integration Center and have accused HHS of "moving the goalposts" for the healthcare industry on cybersecurity, and the Senate Committee of Homeland Security and Governmental Affairs has sought clarification on the role and scope of the Center. Whether the HCCIC will be effective, ineffective, or hamstrung may play a role in determining whether the American healthcare sector remains "low hanging fruit" for ransomware cybercriminals in 2018.

Politics by Other Means? The Threat from Nation-States.

One final worrisome development in recent years – and one that promises to grow more perilous in 2018 – is the increasing cyber threat posed by nation-states. Use of cyberwarfare by governments is, of course, nothing new, from the American-Israeli Stuxnet attack on the Iranian nuclear program to the Russian hacking of Democratic Party emails in the 2016 election. Of particular concern to cybersecurity experts and the U.S. and allied governments, however, is the growing cyber threat posed by North Korea, which was detailed by the New York Times last month. As former NSA Deputy Director Chris Inglis told the Times, "Cyber is a tailor-made instrument of power" for the North Koreans. North Korea's isolation makes the country less vulnerable to cyber-response, the marginal impact of additional sanctions on the "Hermit Kingdom's" economy is likely to be limited, and the U.S. and its allies are relatively unlikely to respond to cyberattacks will military force for fear of precipitating a devastating war.

North Korea is believed to use cyberattacks to generate income and to discourage negative foreign portrayals of the regime, as they did with their 2014 hack of Sony in the run-up to the release of the movie The Interview. More recently, the North Koreans are believed to have been behind the massive WannaCry ransomware attack in May, which represents a major ratcheting up of their ambitions in the realm of causing cyber chaos. Although North Korea's cyberwarfare program is a potent threat in significant measure due to the country's relative inoculation from retaliation, there are potential steps that can be taken against it. As the New York Times Editorial Board commented in October, one of the more promising avenues against the North Korean cyber program is to target their hackers, many of whom are located abroad. An upcoming article in this series will explore the threat from state actors, including North Korea, in greater depth.

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