Iran's discovery of Flame malware turning into political hot potato

With Iran's computer-emergency response center now decrying Windows-based cyber-espionage software known as Flame (or alternately Flamer or Skywiper) it says it discovered infecting its oil-ministry computers, the uproar is reaching into the United Nations, which is investigating the malware.

Researchers identify Stuxnet-like cyberespionage malware called 'Flame'

The U.N.'s International Telecommunication Union (ITU) will issue a warning to countries about the Flame computer virus that was discovered in Iran, with Marco Obiso, cyber security coordinator for the ITU saying Flame was a dangerous tool that could be used to potentially attack critical infrastructure.

Obiso is quoted by Reuters as saying Flame was likely created by a "nation-state," and Obiso voiced the opinion that Flame is "much worse than Stuxnet," the malware discovered two years ago that appeared to target programmable logic controllers in Iranian nuclear facilities. No one claimed official responsibility for that, but suspicions centered on Iran's adversaries the U.S. and Israel.

In comparison to Stuxnet, however, Flame malware appears to be for broader cyber-espionage purposes on infected Windows machines. Kaspersky Lab, which was commissioned by the ITU to analyze Flame, is also now saying Flame is likely a cyber-espionage weapon developed by a nation-state. Even as technical research proceeds to better understand the highly complex and encryption-hidden Flame, some are noting that the political ramifications of what's unfolding are significant.

Flame is being spotted in other Middle East countries and Europe; researchers in Budapest say it's been uncovered in Hungary.

"This is not a flash in the pan," says Chris Bronk, professor and fellow in information technology at Rice University. With Iran going directly to the U.N. division of the ITU to report its discovery of Flame, and the ITU calling on Kaspersky to conduct a technical analysis, the issue of cyber-espionage and critical infrastructure protection has now landed squarely on the political stage. Diplomatic circles to date have not found this topic an easy one to understand or deal with, Bronk points out.

The ITU, based in Geneva, has had a long history in traditional telecommunications related to global standards, but its role is not now as important as it was decades ago. These days, the ITU is interested in expanding its global political role at the U.N. by taking on cyber-security issues, Bronk says.

Most of the major anti-malware companies global in operation, but even the fact that the ITU selected Kaspersky, a Russian-based company, to do the analysis rather than an American-based one such as Symantec or McAfee will be a fact remembered by many as the significance of Flame becomes better understood, Bronk adds.

In response, Kaspersky said it was natural for the ITU to commission it to analyze Flame because Kaspersky has worked on several cyber-security projects with the ITU. Roel Schouwenberg, senior researcher at Kaspersky, said it will take some time to fully understand Flame, but the research is being done independently of Iran or any other country. So far, Kaspersky has found 189 instances of infections have been identified in Iran, 98 in Israel and Palestine, 30 in Syria, plus a few more elsewhere in the Middle East.

But analysis of samples of Flame is now being done by several security firms, and some of the earlier published analysis has also come from the Budapest University of Technology and Economics in its Laboratory of Cryptography and System Security (CrySyS). This laboratory today issued a lengthy report on the malware (which it calls sKyWIper), noting its findings are still a work in progress.

The report states that Flame/Flamer/ Skywiper has infected undisclosed systems in Hungary as well. The technical analysis of the malware suggests it's "another info-stealer with a modular structure incorporating multiple propagation and attack techniques, but further analysis may discover components with other functionalities." The report emphasizes that Skywiper/Flame "may have been active for as long as five to eight years, or even more."

According to the Hungarian report, the malware "uses compression and encryption techniques to encode its files. More specifically, it uses five different encryption methods (and some variants), three compression techniques, and at least five file formats (and some proprietary formats, too). It uses special code-injection techniques. Quite interestingly, Skywiper stores information that it gathers on infected systems in a highly structured format in SQLite databases. Another uncommon feature of Skywiper is the usage of the Lua scripting language. Skywiper has very advanced functionality to steal information and to propagate. Multiple exploits and propagation methods can be freely configured by the attackers. Information gathering from a large network of infected computers was never crafted as carefully as in Skywiper. The malware is most likely capable to use all of the computers' functionalities for its goals. It covers all major possibilities to gather intelligence, including keyboard, screen, microphone, storage devices, network, wifi, Bluetooth, USB and system processes."

The report, which calls it arguably the "most complex malware ever found," concludes that Flame/Skywiper was "developed by a government agency of a nation state with significant budget and effort, and may be related to cyber warfare activities."

Ellen Messmer is senior editor at Network World, an IDG publication and website, where she covers news and technology trends related to information security.

Read more about wide area network in Network World's Wide Area Network section.

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