South Korean Cybersecurity: Three Questions

By Brett Young, Research Assistant, American University, DC
Center for Technology and National Security Policy

 

The mid-April paralysis of the National Agricultural Cooperatives Federation (Nonghyup), South Korea’s fourth-largest retail bank, seemed to be another routine cyber incident in the same vein as recent, high-profile intrusions carried out against Sony (where attacks resulted in the breach of 100 million customers’ personal information) and Hyundai Capital (where hackers demanded a ransom for not releasing stolen information.) Preliminary investigations, however, showed that this was not the work of ordinary hackers. In early May, the Seoul Central District Prosecutor’s Office announced that the culprit was North Korea.

A network breach of the financial systems that underpin a vibrant modern economy, particularly one conducted not by a group of profit-seeking hacker-criminals, but by a sovereign nation-state with hostile intentions, raises a number of questions.

How should this alleged incident impact diplomatic relations with North Korea? After a bloody 2010, this year has seen a North Korean “charm offensive” with an emphasis on improving relations between the two Koreas. The North may be seeking food aid to stave off famine conditions, or may want a more stable situation for the 100^th anniversary of Kim Il-Sung’s birthday in 2012. At the negotiating table, President Lee Myung-bak’s default position has been to seek apologies for the deaths of 50 citizens at the hands of the North in 2010. Yet any discussion of the Cheonan corvette sinking or the shelling of Yeonpyeong Island is met with vigorous denials and can lead to immediate termination of any talks by the North.

Nonghyup’s security breach was considerably more than a nuisance; since April 12, the bank has spent over $400 million on measures to prevent the loss of customer confidence. When the South sits down at the table with the North, should Nonghyup be on the agenda? Or is silence (or covert retaliation) best?

The North has shown the ability to change their diplomatic posture overnight; their “charm offensive” posture may not last. When dealing with a regime that specializes in provocation, South Korea needs to define what manner of cyber incidents will be permitted to derail ongoing negotiations.

At the national level, how should South Korea pursue cybersecurity down the road? The security team at Nonghyup ignored financial sector regulations regarding strength of passwords, and internally permitted use of passwords that were deemed too weak to be used by their own customers.

Previous cyber intrusions in the ROK were enabled by the malware spread through popular peer-to-peer (P2P) file-sharing websites. In the past, South Korea has tried to combat cyber intrusions by increasing public awareness through mass and social media. But the economic motivation to use P2P websites—and get goods for free—will remain, despite government campaigns. South Korea can create more vigorous laws regarding network protection, but must do so in a fashion that will not create a counterproductive environment where reluctance to cooperate is the preferred corporate response to a network breach.

Internationally, the Nonghyup case will never end up before the United Nations. Last year’s sinking of the Cheonan resulted in a UN Presidential Statement condemning the attack. But in cyberspace, attribution—being able to directly attribute an intrusion to a source—remains the thorniest in a thicket of issues. North Korea’s involvement has been alleged, not proven—as with two other previous cyber incidents in the South. Some experts and media outlets disagreed, noting that technical evidence cited by the National Police Agency can be manipulated by competent hackers. As a state with one of the highest broadband connectivity rates in the world, South Korea is better off continuing to bolster its defenses: it has both a Cyber Warfare Command and Cyber Terror Response Center, and roughly doubled funding for the former in April. 

Finally, there is the broader question of the gradual increase in cyber intrusions against states, and what states are to do about them. Recent years have seen increasingly brazen network intrusions, threatening state secrets, which costs time and money. Intelligence agencies, military planners, and policymakers are grappling with the question of how exactly to respond to certain types of intrusions—and what, if any, level of a cyber incident would require the answer of a real-world, kinetic response.

An event which broke as this went to press will certainly have the attention of Seoul. The Wall Street Journal reported that the U.S. Department of Defense is soon to release its cybersecurity strategy, possibly containing precedent-setting answers to the question posed above.

All three questions bear close scrutiny not only by South Korean policymakers, but by those interested in shaping policy for effective cybersecurity around the world.

Brett Young is a graduate student at American University’s School of International Service, where he focuses on security studies in East Asia. He is currently researching aspects of cybersecurity for NDU’s Center for Technology and National Security Policy. He previously interned at the Korea Economic Institute in Washington, DC.

A Weapon of Biblical Proportions?

By Micah J. Loudermilk, Center for Strategic Research

The past several weeks have witnessed an explosion of reports on the recently-discovered Stuxnet malware, referred to as the world’s first cyber super-weapon. Suspicions that the worm was custom-designed to target a nuclear facility in Iran – perhaps Bushehr or Natanz – have grown with the passage of time since Stuxnet infections appear heavily concentrated in Iran, perhaps reaching a breaking point since a text string was found deep inside Stuxnet’s code containing an allusion to the Biblical figure Esther, credited with saving the Jews from destruction by the Persians. As cyber experts worldwide race to decode and understand Stuxnet – numerous questions are arising regarding the incredible sophistication of the attacks, who is responsible for it, and what the end result will be when the worm finds its target. However, equally important and not yet analyzed are two important questions about the longer-term consequences of Stuxnet in the cyber sphere.

First, can cyber attacks be defended against? Troublingly, the short answer to that question appears to be “no” – at least not with any degree of consistency and reliability. Stuxnet opened the door on a whole new field of cyber warfare, previously considered impossible, and with it a slew of new possibilities for attacks. Operating without human guidance and capable of taking over industrial control systems, Stuxnet is a perfect example of how rapidly the cyber field is evolving, consistently leaving those seeking to defend against attacks playing catch-up.

On the surface, the superiority of offensive capabilities compared to their defensive counterparts is relatively simple: an offensive system is successful if it strikes once, but a defensive system has zero margin for error. This equation is magnified on the cyber front where new loopholes and critical vulnerabilities are found and exploited by attackers faster than they can be closed and protected. When coupled with the near-instantaneous speed at which networks operate, defense against attacks becomes infinitely more difficult.

Second, is the realm of cyber warfare officially open for business? Sure, for years the Chinese and other entities have been hacking DoD networks, the U.S. electrical grid, and other critical infrastructure, but the Stuxnet malware is potentially the first real-world case using a worm to destroy a physical target. While no mechanism exists by which to define at what point a cyber attack or infiltration becomes an act of war, it seems clear that there must be a line, but where should one draw it? Should Iran’s Bushehr or Natanz plant be destroyed by this cyber attack, is it necessarily any different from utilizing jet fighters or missiles to achieve the objective? These are all vital questions which must be addressed, not simply in the case of Stuxnet, but broadly speaking.

Notwithstanding of this episode’s outcome, the door into this terrifying world – where targets can be hit and critical infrastructure compromised without a nation or group taking any tangible action – is potentially open. The possibilities are immense, and the problems even greater – in large part due to the attribution problem. Regardless of whether or not the destruction of another nation’s nuclear plant crosses any arbitrary lines, absent knowledge of what country is responsible for unleashing it (without even addressing the possibility of rogue group actions), a concerted response is difficult. The danger here, and one already obvious from the cyber attacks directed daily at the U.S., is that countries can take actions against other states from the relative safety of anonymity, potentially giving rise to an increased use of cyber tactics as a means to asymmetrically attack one’s opponents.

Ultimately, it may never be known who perpetrated the Stuxnet worm or what, if any, the effects were on Iran’s nuclear program (assuming that is indeed the target). One can draw conclusions from delays to the launch of the Bushehr facility, but these delays have been persistent and Iran continues to deny that any of its nuclear facilities have been adversely affected (despite being infected). However, it is crucial to understand that cyber attacks of this type are now fully within the realm of possibility and, as ideas previously only imagined in science-fiction movies move ever closer to reality, the strategic calculus of U.S. policymakers must learn to adjust quickly and accordingly.