NK issues a fresh threat as S.Korea probes hacking

North Korea said it would attack U.S. military bases on Japan and the Pacific island of Guam if provoked, a day after leader Kim Jong-un oversaw a mock drone strike on South Korea. The North also held an air raid drill on Mar. 21 after accusing the United States of preparing a military strike using bombers that have overflown the Korean peninsula as part of drills between South Korean and U.S. forces.

North Korea has stepped up its rhetoric in response to what it calls “hostile” drills between South Korea and the United States. It has also been angered by the imposition of fresh U.N. sanctions that followed its February 12 nuclear test.

Separately, South Korea said a hacking attack on the servers of local broadcasters and banks on Wednesday originated from an IP address in China, raising suspicions the intrusion came from North Korea. A Chinese Internet address was the source of a cyberattack on one company hit in a massive network shutdown that affected 32,000 computers at six banks and media companies in South Korea, initial findings on Mar. 21 indicated.

It’s too early to assign blame — Internet addresses can easily be manipulated and the investigation could take weeks — but suspicion for Wednesday’s shutdown quickly fell on North Korea, which has threatened Seoul and Washington with attack in recent days because of anger over U.N. sanctions imposed for its Feb. 12 nuclear test.

South Korean regulators said they believe the attacks came from a “single organization,” but they’ve still not finished investigating what happened at the other companies.

Experts say hackers often attack via computers in other countries to hide their identities. South Korea has previously accused North Korean hackers of using Chinese addresses to infect their networks.

“We do know that North Korea does route attacks through Chinese servers because that’s the only way they can communicate with South Korea,” Timothy Junio, a cybersecurity fellow at Stanford University’s Center for International Security and Cooperation, said. “It’s not surprising there’s a Chinese IP address involved.”

US Treasury Secretary Jacob Lew pressed Chinese leaders over computer hacking and for help with North Korea during two days of talks. Lew’s visit to Beijing was the first high-level contact between the two governments in six months as they re-engage following a hiatus during the Chinese leadership transition.

The White House has called for Beijing to take action to stop computer attacks aimed at stealing company secrets. Hundreds of cyberattacks have been traced to China, and a security firm said last month that it found a wave of attacks on 140 companies that originated in a building in Shanghai housing a military unit.

Chinese officials have denied their government is involved and say China also is a victim of cyberattacks. In talks with Chinese leaders, Lew emphasized that Washington sees a distinction between criminal cyberattacks, which are a common threat, and spying by state-sponsored enterprises, said a senior American official who spoke on condition of anonymity in order to brief reporters. The official declined to say how Chinese officials responded.

The hacking attack brought down the servers of South Korean broadcasters YTN, MBC and KBS as well as two major commercial banks, Shinhan Bank and NongHyup Bank. Investigations of past hacking incidents on South Korean organizations have been traced to Pyongyang’s large army of computer engineers trained to infiltrate the South’s computer networks.

South Korea’s defense ministry said it was too early to blame the North but said such a cyber capability was a key part of its arsenal. Experts say thousands of North Korean engineers may have been recruited for the purpose.

Seoul believes North Korea runs an Internet warfare unit aimed at hacking U.S. and South Korean government and military networks to gather information and disrupt service.

The Mar. 20 attack caused computer networks at major banks and top TV broadcasters to crash simultaneously. It paralyzed bank machines across the country and raised fears that this heavily Internet-dependent society was vulnerable. On Mar. 21, only one of the attacked banks, Shinhan, was fully online, officials said.

In an indication of the high tension on the Korean Peninsula, South Korean media reported that North Korea sounded air-raid warnings in radio broadcasts Thursday morning as part of military drills.

The network paralysis took place just days after North Korea accused South Korea and the U.S. of staging a cyberattack that shut down its websites for two days last week. Loxley Pacific, the Thailand-based Internet service provider, confirmed the North Korean outage but did not say what caused it. South Korea denied the allegation.

The attack may have also extended to the United States. Greg Scarlatoiu, executive director of the U.S.-based Committee for Human Rights in North Korea, said he discovered early Wednesday that their website had been hacked. They have yet to establish who was behind it but strongly suspect it came from North Korea.

Several of the committee’s publications, including lengthy reports with satellite imagery of North Korean prison camps, had been removed, along with biographies of their staff and board, and their policy recommendations to the Obama administration.

The South Korean shutdown did not affect government agencies or sensitive targets such as power plants or transportation systems, and there were no immediate reports that bank customers’ records were compromised, but the disruption froze part of the country’s commerce.

Some customers were unable to use the debit or credit cards that many rely on more than cash. At one Starbucks in downtown Seoul, customers were asked to pay for their coffee in cash, and lines formed outside disabled bank machines.

Broadcasters KBS and MBC still didn’t have full computer use on Thursday, but the shutdown did not affect TV broadcasts. The YTN cable news channel also said the company’s internal computer network was paralyzed. Footage showed workers staring at blank computer screens.

Last year, North Korea threatened to attack several news companies, including KBC and MBC, over their reports critical of children’s’ festivals in the North.

“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.

The shutdown raised worries about the overall vulnerability to attacks in South Korea, a world leader in broadband and mobile Internet access. Previous hacking attacks at private companies compromised millions of people’s personal data. Past malware attacks also disabled access to government agency websites and destroyed files in personal computers.

Seoul blames North Korean hackers for several cyberattacks in recent years. Pyongyang has either denied or ignored those charges. Hackers operating from IP addresses in China have also been blamed.

In 2011, computer security software maker McAfee Inc. said North Korea or its sympathizers likely were responsible for a cyberattack against South Korean government and banking websites earlier that year. The analysis also said North Korea appeared to be linked to a massive computer-based attack in 2009 that brought down U.S. government Internet sites. Pyongyang denied involvement.

“North Korea has almost certainly done similar attacks before,” Junio said. “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.”

South Korea has created a National Cybersecurity Center, a national monitoring sector and a Cyber Command modeled after the U.S. Cyber Command. Junio said South Korea’s major antivirus firms also play a large role in stopping hacking attacks.

The shutdown comes amid rising rhetoric and threats of attack from Pyongyang over U.N. sanctions imposed for its December long-range rocket launch and February nuclear test. Washington also expanded sanctions against North Korea this month in a bid to cripple the government’s ability to develop its nuclear program.

North Korea has threatened revenge for the sanctions and for ongoing U.S.-South Korean military drills, which the allies describe as routine but which Pyongyang says are rehearsals for invasion.

Last week, North Korea’s Committee for the Peaceful Reunification of Korea warned South Korea’s “reptile media” that the North was prepared to conduct a “sophisticated strike” on Seoul. <Compiled from the  Associated Press, Saudi Gazette and other media reports>