Today, cyber criminals who operate the most sophisticated stealth malware and botnets rely on a remarkably small number of network and hosting service providers, known to the industry as bad actors. These bad actors supply the infrastructure needed to host drive-by download exploits, command-and-control servers, stolen data drop sites, and other more functional network needs such as DNS and reliable uplinks. Having a stable, controllable network allows malware operators to remove one difficult piece of the puzzle and Internet Service Providers (ISPs) are lining up to take their money. Even given that these networks are very well known, it has proven difficult -- in some cases impossible -- to stop cyber criminals and these bad actors due to legal, economic and technical hurdles.
The cyber crime spree that is underway is supported by bad actors that turn a blind eye to the questionable and criminal activities transpiring over their networks. Research from FireEye and others have exposed notorious examples like McColo, ZlKon, HostFresh and many more. The Federal Trade Commission scored a rare victory when it took down 3fn based on findings that 3fn, "recruits, knowingly hosts, and actively participates in the distribution of spam, child pornography, and other harmful electronic content."
However, these bad actors are difficult to bring to justice due to the international nature of their crimes, the slow response time with which they react to shutdowns and the general lack of funding and focus for cyber law enforcement.
Hosting providers in the Eastern Bloc openly market spam e-mail services, ICQ-based spam and spam hosting among their service offerings since they are well outside the jurisdiction of would-be law enforcement. Meanwhile, their U.S.-based equivalents are much more covert, leveraging hosting fronts, multi-national partnerships, IP space sharing agreements and others to hide the real entity behind a business.
Cybersecurity experts say a handful of ISPs and domain name registrars work closely with cyber criminals to set up malicious websites that sell fake software, host and distribute malware, facilitate botnet communications and other important services to perpetrate these online criminal endeavors. Cyber criminals are making billions by holding companies for ransom using DDoS attacks, selling off confidential information, sending phishing spam, as well as selling storage services for pirated movies, music, and illegal images. The monetization possibilities of malware and botnets are so numerous that the creativity of the cyber criminal is the only limit at this point. Underlying all these schemes is a need for a stable cyber infrastructure to provide the criminals with a platform for their various online businesses.
For example, an Estonia company with a very small /24 allocation, Starline Web Services (that is in turn hosted by Compic) was infamous for allowing malicious content on their network. Earlier in 2009, researchers found that 188.8.131.52 was hosting malicious files and drop zones for ZBot, a notorious banking and backdoor Trojan. Also, on 184.108.40.206, they were hosting redirectors used within an iFrame to send victims to exploit sites, such as directlink2.cn (itself hosted on 220.127.116.11) that used a malicious PDF to attack the Adobe Reader plug-in. Notifying upstream providers like Compic about malware they and their customers were hosting usually gave mixed results at best. Complaints were typically addressed only when backed up by some local authorities, say the Estonian Criminal Police. Unfortunately, it is not possible to get law enforcement involved on every abuse complaint and typically only when the problem has already become egregious. In November 2008, the Estonia CERT team directly stepped in to take down a Srizbi C&C hosted on 18.104.22.168 while it was being hijacked by the FireEye research team. It remained down for about four months and popped back up on the exact same hardware and IP in February. This level of arrogance shows the lack of respect that these actors have for their local CERTs.