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Photo: Castaneda Luis/AGF/UIG via Getty Images

The Department of Justice on Tuesday unsealed an indictment charging two individuals with working as hackers for the Ministry of State Security, China’s main civilian intelligence agency.

What we know: The campaign dates back to 2009 and targeted defense contractors, tech companies, dissidents —and, more recently, institutions involved in COVID-19 research.

  • The hackers stole terabytes of data and “hundreds of millions of dollars’ worth” of intellectual property and trade secrets, says the indictment.
  • Prosecutors say the hackers worked for the MSS as contractors, both freelancing for their own economic gain — in one case trying to extract a ransom payment from a victim company whose intellectual property the hackers had pilfered — as well as responding to specific tasking from MSS officials.

In one case, MSS officials provided the two contractors with a “zero day” exploit — that is, a previously unknown vulnerability — to hack into the network of Burmese human rights groups.

  • The campaign was truly global in scope, with victim companies in “the United States, Australia, Belgium, Germany, Japan, Lithuania, the Netherlands, South Korea, Spain, Sweden, and the United Kingdom,” among other countries, say prosecutors.
  • According to the indictment, the hackers breached a breathtaking number of targets across many sectors, including a Department of Energy facility in Washington State; gaming companies in Europe; a Japanese medical device maker; an Australian defense firm; a U.S. educational company, where the hackers stole personally identifiable data from “millions” of students and teachers; and many other private companies.

Our thought bubble: Though the indictment provides a fascinating glimpse into the tactics, techniques and procedures of hackers affiliated with Chinese intelligence, it is unlikely to have much of a deterrent effect.

  • The hackers’ targets fall squarely within the established parameters of nation-state spying — especially China’s focus on economic espionage. China’s spies won’t simply stop spying because a few contractors got busted.

But the indictment could potentially throw a wrench into China’s activities by revealing just how much the U.S. knows about them.

  • The indictment discloses, for instance, the name of an MSS facility in China that operated under a false name — and includes actual pictures of the building.
  • How did the U.S. learn about the facility? Who took the pictures? How long have U.S. intelligence personnel been sitting on this information? What other MSS facilities may the U.S. know about?
  • These are the types of questions China’s spies may be asking themselves, in various degrees of frenzy.

Between the lines: This type of disruptive, offensive counterintelligence campaign may be precisely what U.S. officials had planned by disclosing these facts in an indictment that will likely never go to trial.

Go deeper: Inside hackers' pivot to medical espionage

Go deeper

Oct 20, 2020 - World

China embraces hostage diplomacy

Illustration: Sarah Grillo/Axios

The Chinese government is threatening to detain foreign citizens unless their home governments do what Beijing demands. In some cases, China has already made good on those threats.

The big picture: This marks a potential evolution of China's "wolf warrior diplomacy" to outright rogue state behavior, putting it in the company of countries like North Korea and Iran, which have also engaged in hostage diplomacy.

Ben Geman, author of Generate
Oct 20, 2020 - Energy & Environment

The U.S.-China climate rupture

Illustration: Sarah Grillo/Axios

Well that, as Ron Burgundy would say, escalated quickly. China's foreign ministry is accusing the Trump administration of "major retrogression" on climate and being an environmental "troublemaker."

Why it matters: China's unusual statement Monday widens the rupture between the world's largest carbon emitters as global climate efforts are flagging and the pandemic's effect on emissions is too small to be consequential in the long term.

Mike Allen, author of AM
3 hours ago - Politics & Policy

Fauci fires back at Rand Paul for slam on tonight's "Axios on HBO"

Responding to charges by Sen. Rand Paul on Sunday's "Axios on HBO," NIAID director Anthony Fauci told "ABC This Week" that it's "molecularly impossible" for U.S.-funded bat virus research in China to have produced COVID-19.

Why it matters: The issue 0f Wuhan research was reignited on the right last week with a National Institutes of Health letter to Congress disclosing more about the research.

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