A ransomware alert has been issued by the US and Canada to ensure that individuals and organizations are aware of the threat posed by this type of malicious software.

The alert, from the Department of Homeland Security (DHS) and the Canadian Cyber Incident Response Centre (CCIRC), comes on the back of what seems to be a proliferation of ransomware attacks.

They said that it is now apparent to cybercriminals that this particular approach is remarkably “profitable”, resulting in not only a general increase in the number of attacks, but also in the number of ransomware variants.

“In 2013, more destructive and lucrative ransomware variants were introduced, including Xorist, CryptorBit, and CryptoLocker,” the official statement highlighted.

“Some variants encrypt not just the files on the infected device, but also the contents of shared or networked drives.

“These variants are considered destructive because they encrypt users’ and organizations’ files, and render them useless until criminals receive a ransom.”

Both security organizations drew attention to Locky – recently analyzed by ESET’s Diego Perez – which has been especially prolific as of late.

This variant, described as “destructive”, is delivered through spam emails, which include corrupted Microsoft Office documents (as an attachment).

Once downloaded, the trojan gets to work, encrypting files without the victim at first being aware. It is only when they receive a demand for a ransom that they realise what has happened.

“Infections can be devastating to an individual or organization, and recovery can be a difficult process that may require the services of a reputable data recovery specialist,” stated the DHS and CCIRC in their alert.

In spite of this, their advice is to never pay, something that WeLiveSecurity’s editor in chief, Raphael Labaca Castro, has previously noted.

Speaking last year, the information security expert explained that in doing so, you are, in effect, “supporting cybercrime activities”. Additionally, there is no guarantee that files or devices will be decrypted.

“Remember, this is not a service, they are cybercriminals,” he went on to say. “[And] even if you pay, you are not going to be ‘whitelisted’ so you could get infected again so it’s not a real solution for the future either.

“Prevention is the most important tool against Ransomware, since the infection can be usually cleaned afterwards but not always the information restored.”

A former Metro Vancouver resident has pleaded guilty in California to hacking into the computer networks of major U.S. defence contractors and sending stolen military data to China.

Chinese citizen Su Bin, who is also known as Stephen Su and Stephen Subin, was arrested on the U.S. charges in Richmond two years ago and launched an unsuccessful B.C. Supreme Court battle against his extradition.

U.S. officials announced Wednesday that Bin, 50, appeared in a Los Angeles courtroom after a plea agreement had been reached.

When he is sentenced in July, he could face five years in prison and a $250,000 U.S. fine.

In the agreement, Bin admitted to conspiring with two people in China from October 2008 to March 2014 to gain unauthorized access to protected computer networks in the U.S., including computers belonging to the Boeing Company in Orange County, California.

Bin was able “to obtain sensitive military information and to export that information illegally from the United States to China,” the agreement states.

Some of the stolen information related to military technical data, including data relating to the C-17 strategic transport aircraft and certain fighter jets produced for the U.S. military.

“Protecting our national security is the highest priority of the U.S. Attorney’s Office, and cybercrime represents one of the most serious threats to our national security,” U.S. Attorney Eileen Decker said after Bin’s plea. “The innovative and tireless work of the prosecutors and investigators in this case is a testament to our collective commitment to protecting our nation’s security from all threats.”

She said the guilty plea demonstrates “that these criminals can be held accountable no matter where they are located in the world and that we are deeply committed to protecting our sensitive data in order to keep our nation safe.”

Bin admitted that he would email his co-conspirators with targets he wanted them to hack. The China-based hackers then sent him detailed file listings they had accessed during the hacks so Bin could pick which files and folders he wanted stolen.

Once Bin had the stolen files, he translated some of them into Chinese.

U.S. authorities said that Bin and his accomplices also wrote reports about “the information and technology they had acquired by their hacking activities, including its value, to the final beneficiaries of their hacking activities.”

Bin’s plea agreement says that he and partners “intentionally stole included data listed on the United States Munitions List contained in the International Traffic in Arms Regulations.”

And Bin also admitted that he engaged in the crime for money and specifically sought to profit from selling the data the he and his conspirators illegally acquired.

Assistant Attorney General John Carlin said Bin “admitted to playing an important role in a conspiracy, originating in China, to illegally access sensitive military data, including data relating to military aircraft that are indispensable in keeping our military personnel safe.”

He said his division “remains sharply focused on disrupting cyber threats to the national security, and we will continue to be relentless in our pursuit of those who seek to undermine our security.”

Bin is the owner and manager of Lode-Tech, a Chinese-based company focused on aviation technology with an office in Canada.

At the time of his arrest in June 2014, Bin had permanent resident’s status in Canada. He told a B.C. judge that he owned a Vancouver home then worth $1.8 million and said both his children were born in Canada.

Throughout his court appearances in B.C., his wife and Chinese government officials sat in the public gallery.

Hackers using tactics and tools previously associated with Chinese government-supported computer network intrusions have joined the booming cyber crime industry of ransomware, four security firms that investigated attacks on U.S. companies said.

Ransomware, which involves encrypting a target’s computer files and then demanding payment to unlock them, has generally been considered the domain of run-of-the-mill cyber criminals.

But executives of the security firms have seen a level of sophistication in at least a half dozen cases over the last three months akin to those used in state-sponsored attacks, including techniques to gain entry and move around the networks, as well as the software used to manage intrusions.

“It is obviously a group of skilled of operators that have some amount of experience conducting intrusions,” said Phil Burdette, who heads an incident response team at Dell SecureWorks.

Burdette said his team was called in on three cases in as many months where hackers spread ransomware after exploiting known vulnerabilities in application servers. From there, the hackers tricked more than 100 computers in each of the companies into installing the malicious programs.

The victims included a transportation company and a technology firm that had 30 percent of its machines captured.

Security firms Attack Research, InGuardians and G-C Partners, said they had separately investigated three other similar ransomware attacks since December.

Although they cannot be positive, the companies concluded that all were the work of a known advanced threat group from China, Attack Research Chief Executive Val Smith told Reuters.

The ransomware attacks have not previously been reported. None of the companies that were victims of the hackers agreed to be identified publicly.

Asked about the allegations, China’s Foreign Ministry said on Tuesday that if they were made with a “serious attitude” and reliable proof, China would treat the matter seriously.

But ministry spokesman Lu Kang said China did not have time to respond to what he called “rumors and speculation” about the country’s online activities.

The security companies investigating the advanced ransomware intrusions have various theories about what is behind them, but they do not have proof and they have not come to any firm conclusions.

Most of the theories flow from the possibility that the Chinese government has reduced its support for economic espionage, which it pledged to oppose in an agreement with the United States late last year. Some U.S. companies have reported a decline in Chinese hacking since the agreement.

Smith said some government hackers or contractors could be out of work or with reduced work and looking to supplement their income via ransomware.

It is also possible, Burdette said, that companies which had been penetrated for trade secrets or other reasons in the past were now being abandoned as China backs away, and that spies or their associates were taking as much as they could on the way out. In one of Dell’s cases, the means of access by the team spreading ransomware was established in 2013.

The cyber security experts could not completely rule out more prosaic explanations, such as the possibility that ordinary criminals had improved their skills and bought tools previously used only by governments.

Dell said that some of the malicious software had been associated by other security firms with a group dubbed Codoso, which has a record of years of attacks of interest to the Chinese government, including those on U.S. defense companies and sites that draw Chinese minorities.

PAYMENT IN BITCOIN

Ransomware has been around for years, spread by some of the same people that previously installed fake antivirus programs on home computers and badgered the victims into paying to remove imaginary threats.

In the past two years, better encryption techniques have often made it impossible for victims to regain access to their files without cooperation from the hackers. Many ransomware payments are made in the virtual currency Bitcoin and remain secret, but institutions including a Los Angeles hospital have gone public about ransomware attacks.

Ransomware operators generally set modest prices that many victims are willing to pay, and they usually do decrypt the files, which ensures that victims will post positively online about the transaction, making the next victims who research their predicament more willing to pay.

Security software companies have warned that because the aggregate payoffs for ransomware gangs are increasing, more criminals will shift to it from credit card theft and other complicated scams.

The involvement of more sophisticated hackers also promises to intensify the threat.

InGuardians CEO Jimmy Alderson said one of the cases his company investigated appeared to have been launched with online credentials stolen six months earlier in a suspected espionage hack of the sort typically called an Advanced Persistent Threat, or APT.

“The tactics of getting access to these networks are APT tactics, but instead of going further in to sit and listen stealthily, they are used for smash-and-grab,” Alderson said.

(Reporting by Joseph Menn in San Francisco; Additional reporting by Megha Rajagopalan in BEIJING; Editing by Jonathan Weber and Clarence Fernandez)

Superfast quantum computers could transform the world of finance, advocates say.

In a world where how fast you can assimilate and analyse data, then act on it, makes the difference between profit and loss, computing speed is key.

This is why banks, insurance firms and hedge funds invest millions on technology to give them an edge when trading and to offset human error.

Quantum computers, that owe more to quantum mechanics than electronics, promise to be exponentially more powerful than traditional computers, holding out the tantalising prospect of near-perfect trading strategies and highly accurate forecasting and risk assessments.

“Financial services is a data-rich environment,” says Kevin Hanley, director of design at the Royal Bank of Scotland (RBS). “Time is money and the ability to process data fast could have a huge potential benefit for our customers.”

Quantum computing in a nutshell

Classical computing relies on binary digits or bits – ones and zeros representing on/off, true/false states.

Quantum computing, on the other hand, features qubits, which can be both 0 or 1 at the same time – a state known as superposition. It all goes back to Schrodinger’s cat, but that’s another story….

Subatomic particles such as electrons, photons or ions can be made to behave in this mysterious way.

And because of this flexibility, qubits can do a lot more – a quantum computer could theoretically carry out trillions of calculations per second.

But these computers aren’t easy to build or operate. Quantum processors from one of the leading manufacturers in this field – D-Wave – need to be cooled to just above absolute zero (-273.15C). They also need to be free from any electromagnetic interference.

This makes them bulky and costly; D-Wave’s computers cost about $10m-15m.

Ironically they’re also a bit limited in the kinds of calculations they can currently do, and many observers are still sceptical about how fast they really are.

So it’s fair to say we’re still at the very early stages of quantum computing.

Goldman Sachs, RBS, Guggenheim Partners and Commonwealth Bank of Australia have all invested in quantum computing, with the aim of stealing a march on their competitors.

“This is interesting to the financial world because if you can find an algorithmic advantage to solve a problem, that can give you a great competitive advantage,” says Colin Williams, director of business development for D-Wave.

Google, Nasa, Lockheed Martin, the US Department of Energy and the University of Southern California have all used D-Wave’s systems so far.

Other tech companies, such as Cambridge Quantum Computing, QxBranch andRigetti, are also rushing to develop the hardware and software needed to make quantum computing a reality.

Longer-term visibility

Quantum computers could solve problems in a day that would take classical computers thousands of years to solve.

So in the world of investment, they could consider millions of different global investment scenarios and calculate which ones have the best chance of success over the long-term.

“We can build an optimal portfolio today, but tomorrow it won’t be optimal and needs to be rebalanced, which is expensive,” says Marcos Lopez de Prado, a senior managing director at Guggenheim Partners.

Quantum computers could, in theory, give investment firms much better visibility over the longer-term to make more accurate predictions and reduce this need to tinker with their portfolios, saving costs and possibly boosting profits.

“If you can predict the US dollar/Swiss franc exchange rate a tenth of a cent more reliably, then the value isn’t in the computer, it’s in the cost saving,” says Mr Williams.

Better forecasting could also reduce the prevalence of high-frequency trading, which has been accused of creating market volatility.

High-frequency traders have also been blamed for raising the costs of trading for ordinary investors by swooping into purchases nanoseconds before an interested party and reselling the stocks at a higher price.

Not so fast

So how soon will quantum computers be readily available?

D-Wave’s Mr Williams reckons businesses will have access to quantum computing functionality by 2018, whereas RBS’s Mr Hanley thinks it will be “five to 10 years before quantum computing comes of age”.

But this isn’t stopping financial institutions getting excited.

Blu Putnam, chief economist for the CME group – a US-based derivatives market – says quantum computing has led to a “mind-set change” where financial services “now seek out the nearly impossible to solve problems” in asset and risk management.

Before then, there is a lot of preparation to do.

Quantum computers can’t be interrogated in the same way as traditional computers. The algorithms – sets of complex mathematical rules – used for classical computing need to be reworked to fit into the quantum system.

And finding and training computer scientists to understand and use these systems effectively is another big challenge for the financial services industry.

But Mr Hanley says: “Rather than observe these changes from a distance or be last in the queue, I’d rather be at the front and have a seat at the board.”

Cracking the code

Quantum computing may offer potential benefits to the financial services industry, but it also poses risks.

Banks rely on encryption to keep their transactions and customer data secure. This involves scrambling and unscrambling data using keys made of very large numbers – tens, if not hundreds, of digits long.

A hacker would have to find the right key by trial and error and test it in order to unlock the data – a process that could take hundreds of years even with the most powerful of today’s supercomputers.

But quantum computers could crack the code with relative ease, potentially undermining the security of the entire global financial services industry.

Such a possibility leads Mr Lopez de Prado to fear that governments might outlaw quantum computers entirely.

“Governments could say they should be banned because otherwise there would be no secrets, but they can’t be un-invented.

“We need a new mathematical breakthrough that creates an unbreakable encryption,” he says.

Cryptographers are busy working on new algorithms to block attacks from future quantum computers and many believe this will be possible.

But the industry needs this breakthrough fast. The processing power of quantum computing is growing with each generation.