Ransomware Gangs Ramp Up Industrial Attacks in US

The manufacturing segment was especially hard hit by cyberattacks in the third quarter of 2022.

skyline with factories and smokestacks
Source: Kay Roxby via Alamy Stock Photo

Ransomware gangs are hitting the industrial sector hard — and especially manufacturing companies, with significant spikes in cyberattack activity against US organizations spotted in the third quarter. Meanwhile, emerging ransomware groups are bursting onto the scene, threatening to push the rate of attacks up even higher.

According to a Dragos Q3 analysis of ransomware attacks on industrial organizations, 36% of the recorded cases globally hit North America (46 incidents). This is a significant 10% increase over last quarter, when a quarter of cases affected the region.

However, the analysis also found that the rate of attacks globally remained flat quarter over quarter — 128 incidents for Q3 vs. 125 in Q2.

The majority (68%) of observed incidents were aimed at the manufacturing sector. Out of the confirmed attacks (i.e., those publicly reported, seen in the firm's telemetry, or confirmed on the Dark Web), 88 were against that segment, especially those producing metal products (12 attacks).

Stephen Banda, senior manager of security solutions at Lookout, noted that the manufacturing sector, like everyone else, is moving to the cloud; digitizing manufacturing, inventory tracking, operations, and maintenance increases agility and efficiency, with less production downtime and a greater nimbleness. But it also opens up new attack surfaces.

"To remain competitive, manufacturers are investing in intellectual property and new technologies like digital twins," he tells Dark Reading. "In short, manufacturers are transforming the way they produce and deliver goods - moving toward industrial automation and the flexible factory. This transformation, known as Industry 4.0, puts pressure on mobile devices and cloud solutions."

Yet for most manufacturers, security solutions still remain on-premises, he adds.

"This creates efficacy and scalability challenges when tasked with protecting productivity solutions that have moved to the cloud," he notes. "Security therefore must also move to the cloud to adequately safeguard manufacturing operations."

As for other industrial segments, 9% of attacks targeted the food and beverage sector (12 incidents), followed by oil and natural gas (6%, or eight incidents) and the energy and pharmaceuticals sectors (collectively making up 10% of attacks, with seven and six incidents respectively). The chemical, mining, engineering, and water and wastewater systems segments had just one attack each.

Different Threat Actors Target Different Industrial Segments

In terms of the actors on the industrial stage, the LockBit gang was behind more than a third of all global incidents (35%), while some other known names focused on the energy sector (Ragnar Locker and BlackCat/AlphaV, notably). But the quarter also saw the rise of some emerging actors, like Sparta Blog, BianLian, Donuts, Onyx, and the slow-burning Yanluowang.

In all cases, various groups seemed to have specialties, Dragos noted, including:

  • Ragnar Locker has been targeting mainly energy.

  • Cl0p Leaks has been targeting only water and wastewater.

  • Karakurt has targeted only manufacturing in Q3, while in Q2, it only targeted transportation entities.

  • LockBit 3.0 is the only group that targeted chemicals, drilling, industrial supplies, and interior design.

  • Stormous has only targeted Vietnam.

  • Lorenz has only targeted the United States.

  • Sparta Blog has only targeted Spain.

  • Black Basta and Hive mainly targeted the transportation sector.

Bud Broomhead, CEO at Viakoo, noted that specific ransomware strains targeting specific industries should galvanize intelligence sharing.

"This should spur more industry-level coordination to protect against those threats, specifically between companies that otherwise would compete in the marketplace," he says. "Rather than every organization individually mounting defenses, industry-wide responses are needed (put another way, cybercriminals are attacking an industry which requires industry-level responses). Threat actors don’t exist in silos, so why should the response to them be siloed?"

That coordination could be vitally important, given that going forward, Dragos researchers warned that more new ransomware groups will appear in the next quarter, as either new or reformed ones, due to the changes in ransomware groups and the leaking of the LockBit 3.0 builder — all of which could lead to greater attack volumes.

"[We have] high confidence that ransomware will continue to disrupt industrial operations, whether through the integration of [operational technology] OT kill processes into ransomware strains, flattened networks allowing for ransomware to spread into OT environments, or through precautionary shutdowns of OT environments by operators to prevent ransomware from spreading to OT systems," Dragos researchers said in the Wednesday report.

Broomhead noted that ramped up attacks are likely being driven by twin engines, including the Russia-Ukraine conflict.

"The rise in ransomware attacks against industrial organizations who rely on OT systems is likely coming from threat actors viewing such organizations as easier victims because OT systems and devices are much more vulnerable than traditional IT systems," he says. "While there may be a rise in targeting industrial organizations because of the conflict in Ukraine, those organizations have been targeted for a long time by several foreign adversaries, therefore this increase is a combination of industrial OT systems being easier to exploit and increased activity due to Ukraine."

About the Author(s)

Tara Seals, Managing Editor, News, Dark Reading

Tara Seals has 20+ years of experience as a journalist, analyst and editor in the cybersecurity, communications and technology space. Prior to Dark Reading, Tara was Editor in Chief at Threatpost, and prior to that, the North American news lead for Infosecurity Magazine. She also spent 13 years working for Informa (formerly Virgo Publishing), as executive editor and editor-in-chief at publications focused on both the service provider and the enterprise arenas. A Texas native, she holds a B.A. from Columbia University, lives in Western Massachusetts with her family and is on a never-ending quest for good Mexican food in the Northeast.

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