Chinese whispers of malware writing and bribery in the industry

Posted by   Virus Bulletin on   Dec 14, 2010

As China corruption scandals rumble on, more rumours of malware writers in AV firms surface.

Several recent stories in the media have revolved around China and malware writers, with the much confusion as to the real facts.

After rumours last week that Spanish security firm Panda had hired the Chinese author of the Fujacks virus, a story of high-level corruption resurfaced this week following reports that a former official of Beijing Municipal Public Security Bureau has been given a 'suspended death sentence' after being found guilty of corruption involving well-known Chinese AV firm Rising.

The latest story arose from the long-running saga of corporate rivalry between Rising and its competitor Micropoint, which was founded by former senior employees of Rising. According to reports, government official Yu Bing was convicted in August of embezzlement and corruption on a grand scale, with part of his crimes related to his role in keeping Micropoint down - allegedly in return for bribes from the rival company. Micropoint was denied access to official testing and its employees were accused, and even convicted, of creating malware for their own advancement.

The newest developments were fanned by an incendiary piece in anti-establishment Chinese news source the Epoch Times, which threw a barrage of allegations at Rising, and indeed all parts of the Chinese security industry, claiming outright that malware writing by those in the industry is 'an open secret'. Sources inside Rising have denied any involvement in the case, implying it is part of a smear campaign conducted by the firm's competitors.

"It seems pretty unlikely that anyone working in a serious security firm would consider creating their own malware," said John Hawes, Technical Consultant at Virus Bulletin. "This is an industry which relies heavily on trust and respect between competitors; there's a very strong moral code which totally forbids anything like that. Many outside the industry seem to find it amusing to suggest such theories, but most researchers will have heard the same thing many, many times. Those in the know are well aware that creating new malware is not only unethical but pointless, given the vast amounts being produced by the bad guys; it would be like a city-centre road-sweeper sneakily sprinkling fragments of paper out of his pocket to make sure he's still needed tomorrow. There's more than enough garbage to clean up out there, and few security firms are worried about the problem going away by itself."

The Epoch Times report is here, with some more sober coverage of the sentencing in China's Global Times here. More comment and insight can be found in The Register here, and on Sophos's Naked Security blog here.

This latest rash of rumours follows the similarly murky and complicated story of Panda and Li Jun, the creator of Fujacks, aka the 'Panda-burning-Joss-sticks' virus (so named thanks to the cartoon-style icon some variants used to replace those of the files they infected). Several news sources picked up on reports from China that the Spanish firm had hired the convicted malware author, but rumours were quashed by Panda, who claimed the confusion was sparked by some marketing activities by a Chinese distributor. Details can be again be found in The Register, here, and on the Sophos blog, here, with a rather terse announcement from Panda here.

Posted on 14 December 2010 by Virus Bulletin

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