Initial investigation links Chinese address to SKorea cyberattack; experts suspect North Korea

SEOUL, South Korea - Investigators have traced a coordinated cyberattack that paralyzed tens of thousands of computers at six South Korean banks and media companies to a Chinese Internet Protocol address, but it was not yet clear who orchestrated the attack, authorities in Seoul said Thursday.

The discovery did not erase suspicions that North Korea was to blame. IP addresses are unique to each computer connected to the Internet, but they can easily be manipulated by hackers operating anywhere in the world. The investigation into Wednesday's attack could take weeks.

By Thursday, only one of the six targets, Shinhan Bank, was back online and operating regularly. It could be next week before the other companies have fully recovered.

North Korea has threatened Seoul and Washington in recent days over U.N. sanctions imposed for its Feb. 12 nuclear test, and over ongoing U.S.-South Korean military drills. It also threatened revenge after blaming Seoul and Washington for an Internet shutdown that disrupted its own network last week.

North Korea "will never remain a passive onlooker to the enemies' cyberattacks," state media said last week in a commentary. "The U.S. and its allies should be held wholly accountable for the ensuing consequences."

Wednesday's cyberattack did not affect South Korea's government, military or infrastructure, and there were no initial reports that customers' bank records were compromised. But it disabled scores of cash machines across the country, disrupting commerce in this tech-savvy, Internet-dependent country, and renewed questions about South Korea's Internet security and vulnerability to hackers.

The attack disabled some 32,000 computers at broadcasters YTN, MBC and KBS, as well as three banks. Many of the computers were still down Thursday, but the broadcasters said their programming was never affected, and all ATMs were back online except for those at 16 branches belonging to Nonghyup Bank.

The initial findings from South Korean investigators were based on results from an investigation into one target, Nonghyup Bank. The investigation is continuing into the shutdown at the five other firms.

A malicious code that spread through the Nonghyup server was traced to an IP address in China, said Cho Kyeong-sik, a spokesman for the state-run Korea Communications Commission. Regulators said all six attacks appeared to come from "a single organization."

The Chinese IP address identified by the South Korean communications regulator belongs to an Internet services company, Beijing Teletron Telecom Engineering Co., according to the website tracking and verification service Whois. A woman who answered the telephone number listed on Beijing Teletron's website denied the company was involved in Wednesday's cyber-hack. She refused to identify herself or provide further information.

Beijing Teletron operates fiber-optic networks and provides Internet services. It is the seventh-largest host of IP addresses in China. A subsidiary of the Shanghai-listed Dr. Peng Telecom and Media Group, Beijing Teletron's clients include government agencies and state media: the Foreign Ministry, the State Council Information Office and People's Daily, the Communist Party's flagship newspaper.

Wednesday's cyberattack does not fit the mold of previous attacks blamed on China. Chinese hacking, either from Beijing's cyber-warfare command or freelance hackers, tends to be aimed at collecting intelligence and intellectual property — not simply at disrupting commerce.

If the attack was in fact carried out by North Korea, it may be a warning to South Korea that Pyongyang is capable of breaching its computer networks with relative ease. Seoul's National Intelligence Services believes Pyongyang was behind six cyberattacks between 2009 and 2012.

South Korean investigators say they have no proof that North Korea was behind the attack. However, the outage took place as Pyongyang warned Seoul against holding joint military drills with the U.S. that it considers rehearsals for an invasion.

North Korea also has threatened retaliation for U.N. sanctions imposed for the nuclear test and for its launch of a long-range rocket in December. Pyongyang blames Seoul and Washington for leading the push to punish the North.

On Thursday, in a vein of typical bellicose rhetoric, North Korea's military threatened to attack American naval bases in Japan and an air base in Guam, where nuclear-capable B-52 bombers took off earlier this week to join the drills in South Korea.

The Korean Peninsula has remained in a technical state of war, divided by a heavily militarized border, since the foes signed a truce in 1953. Over the past decade, the two Koreas have engaged in deadly naval skirmishes in Yellow Sea waters that both countries claim. And, increasingly, their warfare has extended into cyberspace.

Previous hacking attacks on commercial ventures have compromised the personal data of millions of customers. Past malware attacks also disabled access to government websites and destroyed files on personal computers.

Last year, North Korea threatened to attack several South Korean news outlets, including KBC and MBC, for reports critical of Pyongyang's activities.

In recent days, North Korea's Committee for the Peaceful Reunification of Korea — a government agency that often targets South Koreans in its push to draw attention to reunification — warned Seoul's "reptile media" that the North was prepared to conduct a "sophisticated strike" if its negative coverage continued.

"If it plays out that this was a state-sponsored attack, that's pretty bald-faced and definitely an escalation in the tensions between the two countries," said James Barnett, former chief of public safety and homeland security for the U.S. Federal Communications Commission.

An ominous question is which other businesses, in South Korea or elsewhere, may also be in the sights of the attacker, said Barnett, who heads the cybersecurity practice at Washington law firm Venable.

Timothy Junio, a cybersecurity fellow at Stanford University's Center for International Security and Cooperation, said South Korea has worked to protect itself.

"Part of why this wasn't more consequential is probably because South Korea took the first major incident seriously and deployed a bunch of organizational and technical innovations to reduce response time during future North Korea attacks," he said.

South Korea also created a National Cybersecurity Center and Cyber Command modeled after the U.S. Cyber Command. Junio said South Korea's anti-virus firms also play a large role in stopping hacking attacks.

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