DoJ indicts Chinese nationals for stealing terabytes of weapon designs, COVID19 research, source code, drug information, and personal data

In a significant development that underscores systemic issues that the Trump Administration is addressing with regard to it relations with China, the U.S. Justice Department has indicted two Chinese nationals over their role in the decade-long cyber espionage campaign that Beijing has been running while targeting commercial and defense companies.

In the current charge, U.S. authorities said Li Xiaoyu and Dong Jiazhi, contractors for the Chinese government, have stolen terabytes of weapons designs, software source code, drug information, and personal data from targeted companies.

During a virtual press conference, U.S. Assistant Attorney General for National Security, John Demers said, the hacking incidents showed China “is willing to turn a blind eye to prolific criminal hackers operating within its borders.”

“In this manner, China has now taken its place, alongside Russia, Iran, and North Korea, in that shameful club of nations that provides safe haven for cyber criminals in exchange for those criminals being on call for the benefit of the state.”

Although the indictment did not specifically name any of the targeted companies or individuals, U.S. Attorney William Hyslop, who spoke alongside Demers, cited “hundreds and hundreds of victims in the United States and worldwide.”

According to officials, the probe was triggered in 2015 when hackers broke into the network of a decommissioned U.S. nuclear complex in eastern Washington state.

Li and Dong were “one of the most prolific group of hackers we’ve investigated,” said FBI Special Agent Raymond Duda.

According to a July 7 indictment which has just been made public, Li and Dong were contractors for China’s Ministry of State Security, or MSS, a comparable agency to the U.S. Central Intelligence Agency.

According to prosecutors, the MSS supplied the hackers with information into critical software vulnerabilities to penetrate targets and collect intelligence. The targets also included Hong Kong protesters, a Chinese Christian non-profit entity as well as the office of the Dalai Lama.

In January 27, when the coronavirus outbreak came into focus, Chinese hackers tried to steal COVID-19 vaccine research of an unidentified Massachusetts biotech firm, said the indictment.

“It is a fundamental threat to all governments around the world and we expect information relating to treatments and vaccines to be targeted by multiple cyber espionage sponsors,” said Ben Read, a senior analyst at cybersecurity company FireEye.

He went on to add, the Chinese government had long relied on contractors for its cyber espionage operations.

“Using these freelancers allows the government to access a wider array of talent, while also providing some deniability in conducting these operations,” said Read.

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