Russian Malware Used By 'Privateer' Hackers Against Ukrainian Government

KIEV, Ukraine -- A hacker tool popular across underground Russian crime networks has been used in attacks on the Ukrainian government, indicating the use of “privateers” for digital espionage, according to researchers. The malware, known as BlackEnergy, appears to have been used in cyberattacks against Georgia during the Russo-Georgian conflict of 2008 too, but has also been operated by criminals as a means to steal credit card data. This summer, it was tailored to hit a number of Ukrainian targets. Researchers from security firm F-Secure said Ukrainian Railways and infrastructure related to government bodies in Dnipropetrovsk, a city in the southeast of Ukraine, were in the crosshairs of the hackers. The researchers uncovered the hackers’ use of proxy servers - used to reroute internet traffic - linked to those targets’ networks. The current “working theory” is that the attackers were carrying out hits on a wide range of targets to earn themselves a living, but were “somehow co-opted” into carrying out state espionage, F-Secure’s Sean Sullivan suggested to the Guardian. “They used to steal credit cards and now they have a different kind of buyer,” Sullivan added. Victims were sent emails containing documents that ostensibly offered information on Russian plans to take over the world, said researchers from another anti-virus firm ESET. One appeared to be a story from the Guardian, entitled ‘Russian ambassadors: next we’ll take Catalonia, Venice, Scotland and Alaska’. Though this was a genuine article online, anyone who clicked on the associated Word file would open themselves up to BlackEnergy infection. The malware can scoop up reams of information from victims’ PCs, including passwords and system information. “The nature of the information being gathered seems to be generic rather than targeted. This may be because the malware has roots from crimeware,” F-Secure’s report read. “The information is still useful however as such data makes it easier for the gang to plan any further attacks on the same targets.” Sullivan said many of the targets were using an old form of anti-virus protection, where “signatures” or markers of malware are used to blacklist them and ban them from the network. The BlackEnergy hackers, just like most cybercriminals on the planet, have tweaked their code so anti-virus won’t recognise them as there is no corresponding signature. “The attackers don’t need a lot of sophistication to get round a 2001 technology,” Sullivan said. The so-called Quedagh gang behind the attacks has been operating since 2010, F-Secure said, but their tools have been used by various cyber criminals since 2007. There is much suspicion around Russian government involvement in cyber attacks on foreign entities, especially those related to the current conflict in Ukraine. UK defence contractor BAE Systems reported in March that Ukraine was facing a barrage of attacks from digital spies as tensions escalated between the two countries. The FBI is investigating whether Russia backed recent attacks on US banks, including JP Morgan, in response to sanctions imposed by the west since the Putin regime’s support of rebels in the east of Ukraine.

Russian TV Sees US Plot Behind Ukraine And IS Militants

MOSCOW, Russia -- Russia is the target of a global plot orchestrated by the United States and involving fighters from the self-styled Islamic State (IS) and nationalist Ukrainian troops - that is the latest conspiracy theory broadcast on Russian state TV. "America is everywhere, the West is everywhere, NATO is everywhere. Everything is organised against Russia," the veteran Russian nationalist MP Vladimir Zhirinovsky railed during a talk show on Channel One, Russia's most popular TV station. There was a "certain link", he hinted, between Ukrainian troops "raiding our western regions" and IS, which he said was being armed by the US. Joining the studio discussion by video link, pro-Moscow Chechen leader Ramzan Kadyrov alleged that IS leader Abu Bakr al-Baghdadi was a "CIA employee". He suggested that he had been recruited while in prison. Kadyrov and Zhirinovsky were speaking on Time Will Tell, a new daytime political talk show on Channel One. Its appearance at a time of day normally reserved for soaps, cookery shows or celebrity chat is just one example of how highly emotive coverage of the Ukraine crisis is increasingly dominating Russian TV schedules. 'Gallery of horrors' Time Will Tell host Pyotr Tolstoy took up the IS-Ukraine conspiracy theme by suggesting a link between IS leader Baghdadi and Ukrainian ultra-nationalist leader Dmytro Yarosh - they were both born in 1971, both went to university, both have written a book, he said. Zhirinovsky eagerly agreed. They were both members of a "new generation of gunmen" being trained by the US, he claimed. Moreover, Zhirinovsky added, Mr Yarosh is "more dangerous because he wants to take Moscow, while the Islamic militants only want to take the Caucasus". These frenzied exchanges were triggered by reports about unmarked graves in an area of east Ukraine said until recently to have been under the control of pro-Kiev forces. Russian state TV has referred to them as a "mass grave", but a local official appearing on Time Will Tell said four bodies had been discovered. The bodies in the graves are said to show signs of torture. Tolstoy said the discovery was part of a "gallery of horrors stretching from Donetsk to the Middle East". Earlier in the Ukraine crisis, Channel One had highlighted claims by a woman refugee that Ukrainian troops had crucified a three-year-old boy on an advertising hoarding. It showed her testimony in its prime-time bulletins three days running. But no evidence was ever produced to substantiate the claims. 'Outlandish theories' In an article in US magazine The Atlantic, London-based TV producer Peter Pomerantsev said the "crucifixion" story was an example of how the "borders between fact and fiction [on Russian news] have become utterly blurred". This was particularly true, he said, following the downing of Malaysia Airlines Flight MH17 over east Ukraine in July, when the "Kremlin and its affiliated media spat out outlandish theories" about the disaster - from a plot to kill President Vladimir Putin to claims the airliner had been packed with corpses. Conspiracy theories like these are now "all over Russian TV", Mr Pomerantsev said. A UK-based researcher, Ilya Yablokov, wrote in a recent article for the Moscow Times that conspiracy theory has been a key element in Russian political discourse stretching back to Soviet times. The latest wave of conspiracy mania, though, began with the mass anti-Kremlin protests that rocked Moscow in 2011-2012. It was then that Russian state TV started to systematically demonise the opposition as American agents. Today opponents of Moscow's intervention in Ukraine are routinely dubbed "traitors" or "fifth columnists". Nationalist commentator Alexander Dugin has even coined the term "sixth column" - to denote members of the establishment who profess support for Putin but also espouse the values of Western liberalism. Conspiracy talk now appears to be rife in Russian society from top to bottom. Putin has described the internet as a CIA "special project", while a recent poll by the state-funded All-Russian Centre for the Study of Public Opinion (VTsIOM) found that 45% of people believed in the existence of some sort of organisation which "exerts influence on all global processes and the actions of many states". According to Yablokov, the function of conspiracy theories is to mobilise society through "fear of foreign or internal deception and subversion". He also suggests that if the current stand-off with the West continues, the Kremlin will turn more and more to conspiracy theory as a "major tool" with which to manage its own people.

Thousands March In Moscow Against Ukraine Fighting

MOSCOW, Russia -- Tens of thousands of people marched through central Moscow on Sunday to demonstrate against the fighting in Ukraine and Russia's alleged complicity in the conflict. Police estimated the crowd at about 20,000, although the city police department put the number at about 5,000. The demonstrators chanted slogans including "No to war" and "The junta is in the Kremlin, not Kiev." The latter refers to Russia's contention that the ousting of Ukraine's former Russia-friendly president was a coup. The fighting between Ukrainian forces and pro-Russia separatists in eastern Ukraine that erupted after the ouster has killed more than 3,000 people. Ukraine and Western countries claim Russia is supplying troops and equipment to the rebels, which Moscow denies. "Our country is acting as an aggressor, like Germany in the war," said demonstrator Konstantin Alexeyev, 35. Ukraine conflict has boosted nationalist sentiment among Russians, many of who regard eastern Ukraine as rightfully a part of Russia, and coverage of the crisis on state-controlled television channels has skewed strongly against the Ukrainian authorities. "I am concerned about the rhetoric on our TV channels, which disseminate anti-Ukrainian sentiment," said 50-year-old demonstrator Ludmila Shteigervalt. "Ukraine is a friendly country. We should just leave it alone." At least one scuffle broke out between protesters and nationalists who unfurled a banner denouncing "The March of Traitors." In Kiev, a Ukrainian security official said attacks by Russia-backed rebel fighters are continuing despite a cease-fire called for by both sides more than two weeks ago. Col. Andriy Lysenko, a spokesman for Ukraine's national security council, said two Ukrainian servicemen and about 40 rebels had died in clashes over the past day. He said the fighters fired on Ukrainian positions at 22 locations and that they fired artillery at the airport in Donetsk, the largest rebel-held city. The city council of Mariupol, a strategically vital city on the coast of the Sea of Azov, said sporadic shelling of points on its outskirts took place during the night and into Sunday daytime. There were no immediate reports of injuries there. A cease-fire was called on Sept. 5, but has been violated repeatedly. Negotiators from Ukraine, Russia, the rebels and the Organization for Security and Cooperation in Europe last week tried to further the peace process with an agreement calling for both sides to halt their advances and for pulling back heavy artillery in order to create a buffer zone. But Lysenko said the cease-fire violations are obstructing fulfillment of the buffer zone plan. "The first point (the cease-fire) is not being fulfilled so far, so we're not talking about the other points," he said. Along with pulling back the heavy weapons, the plan also calls for the withdrawal of foreign fighters and for all military flights over the combat area to be banned.

EU Set For New Clash With Russia Over Ukraine Pact

NEW YORK, USA -- The European Union seemed set for a fresh clash with Russia after the bloc's enlargement chief, Stefan Füle, accused Moscow of living in a "virtual reality" over its interpretation of a recent deal aimed at defusing trade tensions over Ukraine. The dispute threatens to dampen hopes that a Sept. 12 accord between the EU, Russia, and Ukraine could start to ease tensions between Brussels and Moscow. Last week, Russian Economy Minister Alexei Ulyukaev sent a letter to the European Commission's trade chief and Ukraine's foreign minister setting out Moscow's interpretation of the agreement and warning that Russia could still retaliate against Ukraine for ratifying a broad trade and political agreement with the EU. According to European officials, that Sept. 12 compromise was based on a Russian promise not to retaliate against Ukraine for ratifying the so-called association agreement with the EU. In return, the EU agreed to give Ukraine 15 more months before it starts implementing key parts of the agreement related to trade, even while extending its zero-tariff regime for most Ukrainian exports. That would give Russian firms more time to adapt to the accord. Russia has fiercely opposed the association agreement, arguing it will lead to a flood of EU imports entering Russia and undercut Russian exports to Ukraine. The Kremlin had threatened to retaliate by ending its preferential trade relationship with Kiev, a move that could deliver a fresh blow to Ukraine's tottering economy. Many European officials feared if there was no compromise, Russia could sow fresh trouble in eastern Ukraine, where a fragile cease-fire has subdued a full-blown conflict between Kiev's government and pro-Russian separatists. Russia denies orchestrating or supporting the rebels. A copy of the Russian letter reviewed by The Wall Street Journal warns that Russia could still retaliate against Ukraine for ratifying the pact. The letter says Ukraine must not implement any of the provisions of the association agreement, even though Brussels says the compromise froze only some parts of its chapter on trade. Moscow also demanded a mandate for future talks, specifying that the three sides should prepare amendments to the accord. EU officials have insisted repeatedly they won't reopen the text of the agreement. EU officials said Russian President Vladimir Putin wrote a similar letter to European Commission President José Manuel Barroso. In an interview with The Wall Street Journal on Monday, Mr. Füle said the EU and Ukraine would soon reply to Russia. He said Moscow's demands went far beyond anything agreed. "You could compare the texts. You just need to put together the text of what has been agreed and what the Russian interpretation is to understand that this interpretation is from a different world, a parallel world," he said. "We are committed to" dealing with "real issues, real problems and finding real solutions. The Russians will have to abandon this virtual reality." Mr. Füle, the Czech commissioner who is EU's point man on Ukraine relations, said he didn't want to prejudge whether the Russian letter implied Moscow didn't enter the Sept. 12 deal in good faith. The September deal raised hopes among some in Brussels that Moscow would start to be more flexible in its approach to the bloc. Some EU officials hoped it could open the way to resolve other problems, like the talks over a standoff between Ukraine and Russia over gas supplies. The EU has gradually escalated sanctions against Russia in recent months over what it says is Moscow's meddling in Ukraine. Russia has retaliated. In late August, Mr. Barroso warned that ties between the two European giants were nearing a "point of no return." The EU has long dismissed most Russian complaints about Ukraine pact, saying Moscow's real concern was losing its leverage over Kiev. However Brussels officials hoped the 15-month delay on the trade provisions would give Ukraine's economy time to recover, weakening the threat of any eventual Russian retaliation. The Sept. 12 deal didn't bind Russia to refrain from retaliating after Dec. 31, 2015, if Ukraine starts to implement the agreement fully.

Ukraine’s Neglected And Battered Army Inspires Citizens To Pitch In

DNIPROPETROVSK, Ukraine -- Well-wishers mill around the entrances of the two main hospitals in this city in east-central Ukraine — men who greet friends with hugs and backslaps or share a cigarette, women who arrive to visit the wounded, sorting food parcels and pouring cups of sweet tea. Inside the two hospitals, one civilian-run and one military, the medical staffs are busy treating dozens of wounded Ukrainian soldiers, casualties of the six-month war with Russian-backed separatist rebels in the restive provinces to the east. As those casualties have mounted, citizens and support groups for wounded soldiers and their families have begun to rally behind their long-neglected, resource-starved army in a rush of patriotic feeling. According to the support groups’ tally, more than 800 soldiers have been killed in the conflict so far. “We don’t have an army,” said Andrei Karnysh, a veteran of the border guard and the chairman of a regional support group, who was visiting the wounded in the military hospital. “These boys were sent on buses, with rifles and just 30 bullets each,” Mr. Karnysh said. “No body armor, nothing.” Soldiers and veterans interviewed say the armed forces are understaffed, undertrained and underequipped as they confront a much bigger and stronger opponent: not the separatist rebels, but the Russian forces behind them, with their superior firepower. The liars at the Kremlin deny taking any role in the fighting, but almost every soldier interviewed here spoke of direct encounters with Russian troops. “They were shooting at us like they were on a firing range,” said Viktor, a reservist with his arm in a sling. He gave only his first name, saying, as most other soldiers did, that identifying himself to a reporter would be against regulations. Viktor said he was wounded Aug. 29 as Ukrainian forces tried to retreat through a prearranged safe corridor, but came under withering fire from Russian troops anyway. Another soldier, who said he had just returned after four months in the Donetsk region, complained that “there are no supplies in the army.” “There were no good flak jackets, weapons or equipment,” the soldier continued. “We did not see the American supplies that have been given, or medical supplies. It was difficult to get medicine.” Mr. Karnysh said that in the 23 years since independence, successive Ukrainian leaders had let the armed forces decline and even sold off some of their equipment. Budgets became so tight that he and his friends collected contributions to pay for serving paratroopers to make one jump during training. “We are civilians, and we are gathering money so the army can shoot,” he said. When Russia annexed Crimea and pro-Russian separatists began staging protests in eastern Ukraine in March, the Ukrainian armed forces proved largely incapable of handling the threat. Since then, the army has called up thousands of additional recruits, and it has been joined in the field by volunteer paramilitary battalions. Many of them were angered by the loss of Crimea and inspired by the protests in Kiev, the capital, that overthrew President Viktor F. Yanukovych in February. Yet these efforts have resulted not in a unified force, but in a motley collection of units of widely varying ability — the volunteer National Guard formations under the Interior Ministry and the regular army units under the Ministry of Defense — with only a weak central command structure. That lack of cohesion cost the Ukrainian forces dearly in late August. Sgt. Maj. Ihor Tchaikovsky, 47, an army veteran who joined the volunteer Donbass battalion, said a lack of proper equipment and backup had cost his unit dearly, with about 50 men killed, 40 wounded and 110 taken prisoner when they withdrew from the town of Ilovaysk on Aug. 29. “We got the order to leave, and were told there was a corridor,” Sergeant Major Tchaikovsky said. “We made our column with civilian cars; we don’t have military vehicles or heavy guns. We had a big civilian truck loaded with wounded, and pickups and small cars.” After traveling 18 miles, he said, the column came under attack from Russian artillery and antitank grenades. “We managed to scatter and started fighting,” Sergeant Major Tchaikovsky said. “Normally, volunteer battalions function like police. This fighting was not something we should be doing.” He said that the battalion had been able to capture some vehicles and eight prisoners, some of them Russians, but that its route out had been blocked. Surrounded, the battalion was forced to surrender, he recalled. The Russian troops immediately exchanged some of the wounded Ukrainians for their own men, and then turned the rest of their captives over to the separatist rebels, he said. He and a handful of others were later released in another prisoner exchange, but 99 soldiers are still being held in the basement of the Security Service headquarters in Donetsk. Despite the losses and the scale of the Russian intervention, soldiers interviewed over the past two weeks insisted that Ukraine had to build up its forces and continue to resist any breakup of Ukrainian territory. “Many who went to Ilovaysk are ready to stay and build the battalion,” Sergeant Major Tchaikovsky said. “If there was an opportunity not to fight, that would be better. But the mood of our guys is, we should do everything correctly, and not cause harm to the country and to the memory of those who died.” Some units are receiving training and equipment. A National Guard volunteer who was wounded in Ilovaysk said he had trained intensively for three months with an antitank unit before going into battle. An army sergeant who was wounded twice defending the Donetsk airport from rebel forces and had shrapnel scars dotting his face said with a smile that he had survived because he had been protected by American body armor. The sergeant said that the separatist rebels continued attacking the airport day and night even after the cease-fire was declared on Sept. 5, but that he was confident that the army could hold the airport, and would prevail in the larger conflict. “I think we will stay as one country,” he said. “We have survived so many things, and the whole country has been mobilized for this, you cannot imagine.” The sergeant, 36, who repairs shoes in civilian life, said his comrades in the unit defending the airport were working-class men like him. “One was a tea boy on the trains, another transported cash for banks, a third was a car mechanic,” he said. “We can manage. Maybe it will be hard, but we will have victory for sure. My unit is very ready to fight.”

Eastern Europe Expert: Ukraine Faces A Frozen Conflict

BERLIN, Germany -- Ukrainian government troops and pro-Russia separatists have created a buffer zone as part of a ceasefire agreement. Expert Joerg Forbrig tells DW that Kiev now faces an unresolved, frozen conflict in its eastern region. What does the buffer zone in eastern Ukraine do? At the moment, it's just trying to spatially separate the two sides. The agreement is that both sides would withdraw by 15 kilometers (9 miles), so there would be a 30-kilometer corridor between the two warring sides, between the Ukrainian government's army and the separatists and their supporters from Russia. Who does the buffer zone benefit? There are a number of factors here. There is a degree of exhaustion both on the part of the Ukrainian government forces and on the part of the separatists in eastern Ukraine. There's a momentum both in Russia and in Ukraine that speaks in favor of a ceasefire at this stage. On the Ukrainian side, there's obviously the understanding that they cannot defeat Russia and the separatists militarily. There's an election schedule of course, with the parliamentary elections in September. There's an issue still about the gas talks between Russia and Ukraine. On the Russian side, there's also an understanding that, at this stage, it might be best to pause the conflict and perhaps even freeze it. The favorable outcome of this military conflict for Russia would only be possible if Russia engaged even more openly. The Russians are also well aware that the European Union has set a deadline until the end of the month to review the sanctions in light of developments on the ground. So, if there was some form of a more positive dynamic in east Ukraine, the Russians are probably holding out hope that at least some of the sanctions would be lifted. All of this resulted in what seems to be a pause, not a resolution to the conflict, but a pause at least. It doesn't seem like the Ukrainian government has reached many of its objectives. Why wasn't an agreement on a ceasefire and buffer zone possible at an earlier stage in the conflict? The Ukrainian government side has on a number of occasions tried to make way for a negotiated solution. If you remember, in May they declared a unilateral ceasefire for a week or 10 days, which was not observed by the separatists and came at the expense of the Ukrainian side. The Ukrainian army then pushed for a military operation to defeat the separatists and they made progress on that until Russia basically intervened directly and propped up the separatists to a degree that made it impossible for the Ukrainian army to defeat them. There were occasions for earlier ceasefires that the Ukrainian side tried to exploit, but they never materialized on all sides. Does that mean that the position of the separatists and Russia has changed, allowing this agreement to come together? The position for the separatists and for the Russians has deteriorated. There was a dynamic in place with the anti-terrorist operation of the Ukrainian army where it was foreseeable that the separatists would be defeated. The dynamic that affects the Russian side primarily is the sanctions regime that's been introduced. Basically, the last two rounds: The one in late July and the one that was introduced just over a week ago. These are both measures that have an affect on Russia, and Russia must feel that if it doesn't do something and at least give the impression of de-escalation from its side, then there would be even more measures that hurt its economy. The Russians have developed an understanding by now that the sanctions hurt. Like Moldova and Georgia before, does Ukraine now face a frozen conflict in its eastern region? Has Russia carved out a sphere of influence in eastern Ukraine? The calculus on the Kremlin's side is certainly that if it implants a frozen conflict - similar to the ones in Transnistria, Abkhazia and South Ossetia - this will give it in the long run leverage over Ukraine's development, over its domestic reform process, and over its external international affiliations. This calculation doesn't work 100 percent in light of the Georgian experience for instance, or Moldova. Both Georgia and Moldova have made considerable progress in their association with the European Union despite the fact that both of them have a frozen conflict on their territory. Although there will basically be a frozen state or conflict in the east of Ukraine, this still doesn't mean automatically that the reform process or the association with the European Union has to be stalled. Much depends on Kiev here. I do think there are reforms and measures that they can take to implement the association agreement, which can be done even with a frozen conflict on the ground. The question here will be - and has been for the past six months - to what extent the Ukrainian government and more broadly the public will be completely consumed by this armed conflict in the east and will see all its attention diverted to conflict and away from the reform process that needs to take place in the country? In terms of the buffer zone itself, what does this do to the conflict on the ground and the communities that are in the area where fighting has been going on? In the first place, if all sides really abided by the ceasefire and the buffer zone was established all around that contested area, there should be at least some sort of peace or pause in the military exchange. So for the civilian population, this should at least mean there's no shelling; they get essential public utilities and services back; they can fix things ahead of the winter at least to a degree that makes it possible for the populations there to get through the winter, especially having heating and water supplies will be essential. It should also make it possible for some form of humanitarian support to arrive in that area and the adjacent areas that are affected by it. There may also well be an understanding on all sides that unless they agree to some form of ceasefire, buffer zone and fragile sort of peace, they would be facing a humanitarian crisis that none of the sides can handle - not the Ukrainian government, not the separatists, nor Russia. We are after all talking about millions of people in that area.

Ukrainian troops given WWII-era weapons

The Ukrainian troops involved in the war in the south-east of the country, were armed with WWII-era weapons. Adviser to Ukrainian President, Yury Biryukov, said that the weapons, though old, had plenty of ammunition, reports Lifenews. "There were grenade launchers AGS-17 "Flame" and mortars BM-37 produced in 1943). There was also a 23-mm twin anti-aircraft gun, produced in 1963. It was originally designed to combat aircraft, but once installed on the "Ural" and "KamAZ" vehicles, it obtains new powerful functions," the official said. Biryukov thanked the military leadership of Ukraine for provided weapons, saying "we will take what gives, at least, and repair it." "They gave plenty of ammunition, a lot. The weapons are old and they need to be repaired, but guys learn to work powerfully and accurately," wrote Poroshenko's advisor on his webpage.