UPDATE 3-UN agency plans major warning on Flame virus risk

Tue May 29, 2012 5:17pm EDT

* UN agency official says most serious warning ever

* Says Flame could possibly attack critical infrastructure

* UN agency to issue confidential warning to governments

* Some industry observers skeptical about implied danger

* Trend Micro says IXESHE virus attacked Asian governments

By Jim Finkle

BOSTON, May 29 (Reuters) - A United Nations agency charged with helping member nations secure their national infrastructures plans to issue a sharp warning about the risk of the Flame computer virus that was recently discovered in Iran and other parts of the Middle East.

"This is the most serious (cyber) warning we have ever put out," said Marco Obiso, cyber security coordinator for the U.N.'s Geneva-based International Telecommunications Union.

The confidential warning will tell member nations that the Flame virus is a dangerous espionage tool that could potentially be used to attack critical infrastructure, he told Reuters in an interview on Tuesday.

"They should be on alert," he said, adding that he believed Flame was likely built on behalf of a nation state.

The warning is the latest signal that a new era of cyber warfare has begun following the 2010 Stuxnet virus attack that targeted Iran's nuclear program. The United States explicitly stated for the first time last year that it reserved the right to retaliate with force against a cyber attack.

Evidence suggests that the Flame virus may have been built on behalf of the same nation or nations that commissioned the Stuxnet worm that attacked Iran's nuclear program in 2010, according to Kaspersky Lab, the Russian cyber security software maker that took credit for discovering the infections.

"I think it is a much more serious threat than Stuxnet," Obiso said.

He said the ITU would set up a program to collect data, including virus samples, to track Flame's spread around the globe and observe any changes in its composition.

Kaspersky Lab said it found the Flame infection after the ITU asked the Russian company to investigate recent reports from Tehran that a mysterious virus was responsible for massive data losses on some Iranian computer systems.

So far, the Kaspersky team has not turned up the original data-wiping virus that they were seeking and the Iranian government has not provided Kaspersky a sample of that software, Obiso said.

SOME SKEPTICAL

A Pentagon spokesman asked about Flame referred reporters to the Department of Homeland Security.

DHS officials declined to respond to specific questions about the virus, but an agency spokesman issued a brief written statement that said: "DHS was notified of the malware and has been working with our federal partners to determine and analyze its potential impact on the U.S."

Some industry participants appeared skeptical that the threat was as serious as the UN agency and Kaspersky had suggested.

Jeff Moss, a respected hacking expert who sits on the U.S. government's Homeland Security Advisory Council, said that the ITU and Kaspersky were "over-reacting" to the spread of Flame.

"It will take time to disassemble, but it is not the end of the Net," said Moss, who serves as chief security officer of the Internet Corporation for Assigned Names and Numbers, or ICANN, which manages some of the Internet's key infrastructure.

"We seem to be getting to a point where every time new malware is discovered it's branded 'the worst ever,'" said Marcus Carey, a researcher at with cyber security firm Rapid7.

Organizations involved in cyber security keep some of their communications confidential to keep adversaries from developing strategies to combat their defenses and also to keep other hackers from obtaining details about emerging threats that they could use to build other pieces of malicious software.

Meanwhile on Tuesday Japanese security software maker Trend Micro Inc said it had discovered a complex cyber campaign to steal information using a piece of malicious software dubbed IXESHE. It had infected government computers in major East Asian countries along with Taiwanese electronics manufacturers and German telecommunications firms operating across Asia.

Trend Micro officials declined to identify the targets or say who they suspect was behind IXESHE (pronounced "i-sushi").

IXESHE infected PCs with tainted PDF files sent to victims via email, then stole large quantities of data from the PCs and sent it to servers in countries including Taiwan, the United States, South Korea, Brazil, Italy and Japan.

"The amount of data that the adversaries exfiltrated from these systems is astounding. These systems have essentially been colonized," Trend Micro Vice President Tom Kellermann said in an interview.

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