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U.S., allies accuse China of global cyber hacking campaign

[July 19, 2021] By Steve Holland and David Shepardson

WASHINGTON (Reuters) - The United States and a coalition of allies on Monday accused China's Ministry of State Security of a global cyber hacking campaign, specifically attributing a large Microsoft attack disclosed earlier this year to hackers working on Beijing's behalf.

Opening a new area of tensions with China, the United States is joined by NATO, the European Union, Britain, Australia, Japan, New Zealand and Canada to level the allegations, according to a White House fact sheet released Monday morning.

The announcement comes a month after G7 and NATO leaders agreed with President Joe Biden at summits in Cornwall, England, and Brussels in accusing China of posing systemic challenges to the world order.

The governments "will formally attribute the malicious cyber campaign utilizing the zero-day vulnerabilities in the Microsoft Exchange Server disclosed in March... to malicious cyber actors affiliated with the (Chinese Ministry of State Security) with high confidence," the U.S. senior administration official told reporters ahead of the announcement. "The United States and our allies and partners are exposing further details of the PRC's (People's Republic of China's) pattern of malicious cyber activities and taking further action to counter it."

The Chinese embassy in Washington did not immediately respond to a request for comment. Chinese officials have previously said China is also a victim of hacking and opposes all forms of cyber attacks.

U.S. federal agencies, including the National Security Council, the FBI and the National Security Agency, will outline more than 50 techniques and procedures that "China state-sponsored actors" use in targeting U.S. networks, the official said.

Chinese state-sponsored cyber actors consistently scan target networks for critical and high vulnerabilities within days of the vulnerability’s public disclosure, the 31-page U.S. cybersecurity advisory seen by Reuters says.

"We will show how the PRC's MSS, Ministry of State Security, uses criminal contract hackers to conduct unsanctioned cyber operations globally, including for their own personal profit," the official said.

The United States in recent months has focused heavy attention on Russia in accusing Russian cyberhackers of a string of ransomware attacks in the United States.

In Monday's announcement, U.S. officials formally blamed the Chinese government "with high confidence" for the hack that hit businesses and government agencies in the United States using a Microsoft email service. Microsoft has already accused China of responsibility.

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Computer code is seen on a screen above a Chinese flag in this July 12, 2017 illustration photo. REUTERS/Thomas White/Illustration/File Photo

The operation specifically exploited weaknesses in Microsoft’s exchange program, a common email software. Cybersecurity experts were shaken by the scale and volume of the incident, totaling thousands of potential U.S. victims.

The senior Biden administration official said U.S. concerns about Chinese cyber activities have been raised with senior Chinese officials.

"Countries around the world are making it clear that concerns regarding the PRC’s malicious cyber activity is bringing them together to call out those activities, promote network defense and cybersecurity, and act to disrupt threats to our economies and national security," the official said.

The official said the scope and scale of hacking attributed to China has surprised U.S. officials along with China's use of "criminal contract hackers."

The governments will accuse Chinese-affliated actors with "cyber-enabled extortion, crypto-jacking, and theft from victims around the world for financial gain," the official said. "We're not ruling out further action to hold the PRC accountable."

The United States and China have already been at loggerheads over trade, China's military buildup, a crackdown on democracy activists in Hong Kong, treatment of the Uyghurs in the Xinjiang region and aggression in the South China Sea.

On Friday, the Biden administration issued an advisory to warn U.S. businesses about risks to their operations and activities in Hong Kong after China's imposition of a new national security law there last year.

(Reporting by Steve Holland and David Shepardson; Editing by Lincoln Feast and Chizu Nomiyama)

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