Chinese hackers exploited bug to compromise internet companies, cybersecurity firm says

By Raphael Satter

WASHINGTON (Reuters) -A Chinese hacking group exploited a software bug to compromise several internet companies in the United States and abroad, a cybersecurity firm said on Tuesday.

Researchers at the firm Lumen Technologies said in a blog post that the hackers took advantage of a previously unknown vulnerability in Versa Director - a software platform used to manage services for customers of Santa Clara, California-based Versa Networks. It said four U.S. victims and one Indian victim had been identified, although it declined to identify them.

Versa Networks issued an advisory on Monday acknowledging that the vulnerability had been exploited "in at least one known instance" by an advanced group of hackers, and urged customers to update their software to fix the bug. In an email, the company said it had confirmed three victims - including an internet service provider.

Lumen's blog post said that its researchers assessed with "moderate confidence" that the hacking campaign, which kicked off as early as June 12, was carried out by an alleged Chinese government-backed group nicknamed "Volt Typhoon." Lumen researcher Ryan English said that the internet companies were targeted for the attackers to surveil their customers.

"They very rarely go in through the front door," he said.

Doug Britton, an executive with Virginia-based RunSafe Security, said the research appeared sound and that the access described by Lumen would allow a group like Volt Typhoon "the ability to do broad, silent surveillance."

The Chinese Embassy in Washington said in a statement late Tuesday that “Volt Typhoon” was actually a gang of cybercriminals and was not "sponsored by any state or region." It accused the U.S. intelligence community of collaborating with cybersecurity companies to gin up the threat of  the "so-called Chinese government’s support for cyber attacks against the U.S."

Brandon Wales, the recently departed executive director of CISA, was quoted by the Washington Post on Tuesday saying that China's hacking effort had "dramatically stepped up from where it used to be."

Volt Typhoon has emerged as a group of particular concern to U.S. cybersecurity officials. In April, FBI Director Christopher Wray said China was developing the "ability to physically wreak havoc" on U.S. critical infrastructure.

(Reporting by Raphael Satter; Editing by Rod Nickel and Mark Porter)