Technology

- Hackers working for the Chinese government gained access to more than 20,000 VPN appliances sold by Fortinet using a critical vulnerability that the company failed to disclose for two weeks after fixing it, Netherlands government officials said.

- The Netherlands officials first reported in February that Chinese state hackers had exploited CVE-2022-42475 to install an advanced and stealthy backdoor tracked as CoatHanger on Fortigate appliances inside the Dutch Ministry of Defense.

- Chinese state hackers have used the critical vulnerability to infect more than 20,000 FortiGate VPN appliances sold by Fortinet. Targets include dozens of Western government agencies, international organizations, and companies within the defense industry.--

The vulnerability, tracked as CVE-2022-42475, is a heap-based buffer overflow that allows hackers to remotely execute malicious code. It carries a severity rating of 9.8 out of 10. A maker of network security software, Fortinet silently fixed the vulnerability on November 28, 2022, but failed to mention the threat until December 12 of that year, when the company said it became aware of an “instance where this vulnerability was exploited in the wild.” On January 11, 2023—more than six weeks after the vulnerability was fixed—Fortinet warned a threat actor was exploiting it to infect government and government-related organizations with advanced custom-made malware.

Enter CoatHanger

The Netherlands officials first reported in February that Chinese state hackers had exploited CVE-2022-42475 to install an advanced and stealthy backdoor tracked as CoatHanger on Fortigate appliances inside the Dutch Ministry of Defense. Once installed, the never-before-seen malware, specifically designed for the underlying FortiOS operating system, was able to permanently reside on devices even when rebooted or receiving a firmware update. CoatHanger could also escape traditional detection measures, the officials warned. The damage resulting from the breach was limited, however, because infections were contained inside a segment reserved for non-classified uses.

On Monday, officials with the Military Intelligence and Security Service (MIVD) and the General Intelligence and Security Service in the Netherlands said that to date, Chinese state hackers have used the critical vulnerability to infect more than 20,000 FortiGate VPN appliances sold by Fortinet. Targets include dozens of Western government agencies, international organizations, and companies within the defense industry.

"Since then, the MIVD has conducted further investigation and has shown that the Chinese cyber espionage campaign appears to be much more extensive than previously known,” Netherlands officials with the National Cyber Security Center wrote. “The NCSC therefore calls for extra attention to this campaign and the abuse of vulnerabilities in edge devices.”

Monday’s report said that exploitation of the vulnerability started two months before Fortinet first disclosed it and that 14,000 servers were backdoored during this zero-day period. The officials warned that the Chinese threat group likely still has access to many victims because CoatHanger is so hard to detect and remove.

Netherlands government officials wrote in Monday’s report:

Since the publication in February, the MIVD has continued to investigate the broader Chinese cyber espionage campaign. This revealed that the state actor gained access to at least 20,000 FortiGate systems worldwide within a few months in both 2022 and 2023 through the vulnerability with the identifier CVE-2022-42475 . Furthermore, research shows that the state actor behind this campaign was already aware of this vulnerability in FortiGate systems at least two months before Fortinet announced the vulnerability. During this so-called 'zero-day' period, the actor alone infected 14,000 devices. Targets include dozens of (Western) governments, international organizations and a large number of companies within the defense industry.

The state actor installed malware at relevant targets at a later date. This gave the state actor permanent access to the systems. Even if a victim installs security updates from FortiGate, the state actor continues to have this access.

It is not known how many victims actually have malware installed. The Dutch intelligence services and the NCSC consider it likely that the state actor could potentially expand its access to hundreds of victims worldwide and carry out additional actions such as stealing data.

Even with the technical report on the COATHANGER malware, infections from the actor are difficult to identify and remove. The NCSC and the Dutch intelligence services therefore state that it is likely that the state actor still has access to systems of a significant number of victims.

Fortinet’s failure to timely disclose is particularly acute given the severity of the vulnerability. Disclosures are crucial because they help users prioritize the installation of patches. When a new version fixes minor bugs, many organizations often wait to install it. When it fixes a vulnerability with a 9.8 severity rating, they’re much more likely to expedite the update process. Given the vulnerability was being exploited even before Fortinet fixed it, the disclosure likely wouldn't have prevented all of the infections, but it stands to reason it could have stopped some.

Fortinet officials have never explained why they didn’t disclose the critical vulnerability when it was fixed. They have also declined to disclose what the company policy is for the disclosure of security vulnerabilities. Company representatives didn’t immediately respond to an email seeking comment for this post.