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Microsoft's Seizure Of No-IP Domains Disrupted Criminals & Innocents Alike

Microsoft successfully disrupted roughly one-quarter of the APT actors Kaspersky monitors, but took down millions of innocent hostnames too.

UPDATE: As of Thursday afternoon, all seized domains are now back in the possession of No-IP. Original story:

Researchers at Kaspersky say that Microsoft's takeover of 22 No-IP dynamic DNS servers hit the Syrian Electronic Army and other cybercrime groups hard, but it also disrupted innocent users' business in the process. Microsoft says the trouble is resolved. No-IP says it isn't. An apparently-unrelated DDoS attack on the website hit Tuesday, adding to the trouble.

Last month the US District Court of Nevada granted the Microsoft Digital Crimes Unit authority to seize control of the domains as part of an effort to cease or disrupt the operations of several major criminal groups that use No-IP domains. As Richard Domingues Boscovich, assistant general counsel of Microsoft's Digital Crimes Unit, explained, "Our research revealed that out of all Dynamic DNS providers, No-IP domains are used 93 percent of the time for Bladabindi-Jenxcus infections, which are the most prevalent among the 245 different types of malware currently exploiting No-IP domains."

Monday, Microsoft seized control of the domains, but due to a "technical error," legitimate No-IP customers who were not associated with malicious activity were also denied service. According to No-IP, "Millions of hostnames have gone dark and millions of our users have been put out of service."

Microsoft acknowledged the mistake in a statement Tuesday from David Finn, executive director and associate general counsel for the Digital Crimes Unit. He said:

Yesterday [Monday] morning, Microsoft took steps to disrupt a cyber-attack that surreptitiously installed malware on millions of devices without their owners’ knowledge through the abuse of No-IP, an Internet solutions service. Due to a technical error, however, some customers whose devices were not infected by the malware experienced a temporary loss of service. As of 6 a.m. Pacific time today [Tuesday], all service was restored. We regret any inconvenience these customers experienced.

Yet later Tuesday No-IP tweeted that it was still receiving complaints from customers whose sites were down.

Meanwhile, the No-IP website was brought down by a DDoS attack. The company informed customers of the attack via Twitter midday Tuesday, and followed up, stating, "Please note the DDOS attack was only directed at our website, not to our DNS infrastructure."

Wednesday afternoon the company tweeted that some hostnames were starting to resolve again and released a message from CEO Dan Durrer, which stated:

We have been throwing everything we have at getting you back online with the least possible delay. For legal reasons, we have been restricted from reaching out to you, but we simply cannot stay quiet any longer. We are very close to a resolution and we will update you with more information as soon as we can.

Many voices in the security community have come out in protest of the actions taken by Microsoft and the court, stating that they are heavy-handed and set a dangerous precedent that could allow private companies to take control of another company's IT infrastructure whenever they decide it is beneath their own standards of quality.

Those criticisms notwithstanding, the shutdown has achieved its aim, according to Kaspersky Lab's Costin Raiu. In a blog post Tuesday, he stated: "Based on our statistics, the shutdown has affected in some form at least 25% of the [advanced persistent threat (APT)] groups we are tracking."

In addition to Bladabindi and Jenxcus, which he said have been used by multiple hacktivist and criminal groups, including the Syrian Electronic Army, Raiu said that Microsoft's actions disrupted a number of other APTs' operations, including Flame and Snake.

"We think [Monday's] events have dealt a major blow to many cybercriminal and APT operations around the world," said Raiu. "In the future, we can assume these groups will be more careful on using Dynamic DNS providers and rely more often on hacked websites and direct IP addresses to manage their C&C infrastructure."

Sara Peters is Senior Editor at Dark Reading and formerly the editor-in-chief of Enterprise Efficiency. Prior that she was senior editor for the Computer Security Institute, writing and speaking about virtualization, identity management, cybersecurity law, and a myriad ... View Full Bio

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User Rank: Ninja
7/9/2014 | 5:18:03 PM
Re: Universal Standards
I think I should have rephrased the question, I wasn't certain to the services that no IP provided. I understand the need for Dynamic DNS but now that you have clarified that that's what No IP provides the situation became clearer. Thanks,
Sara Peters
Sara Peters,
User Rank: Author
7/8/2014 | 8:49:42 AM
Re: broken link
@SgS125  Thanks for letting us know! I've fixed the link now.
User Rank: Moderator
7/7/2014 | 4:03:00 PM
broken link
Your link to kaspersky is broken.
User Rank: Ninja
7/7/2014 | 11:11:27 AM
Re: Universal Standards
@Ryan there are many legitimate uses for Dynamic DNS services, consider, for example the vast amount of IoT that is in every home and that have to be remotely controlled despite the owners haven't a fixed public IP. It is very common for video surveillance ...

Andre Leonard
Andre Leonard,
User Rank: Strategist
7/7/2014 | 10:51:11 AM
Good job..
You cannot please all the people all the time. But you can please most of the people, most of the time. The best interests of the internet community were serevd here. 

It's sad but necessary due to the increasing number of people who cannot be trusted.
User Rank: Ninja
7/6/2014 | 1:19:19 PM
Universal Standards
I think that two things need to be considered here.

First, I agree it was heavy handed that Microsoft's actions had the ability to affect other private companies whose standards were less astringent than their own. But shouldn't we have a set of universal standards that need to be adhered to privately from a security perspective? This would establish a baseline and at last allow uniformity which might help in needed cases of creation and troubleshooting for third parties.

Second, and this is also a question I am posing. What is the purpose of utilizing no IP? What are the benefits from a non-malicious standpoint? Thanks!
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