Unit 3

Computer
and
Internet Crime
Information System Ethics
Hempal Shrestha
Tech-Know-Legal & Knowledge Management Specialist
Visiting Faculty - Kathmandu University 2023
Objectives
1. What key trade-offs and ethical issues are associated with
the safeguarding of data and information systems?
2. Why has there been a dramatic increase in the number of
computer-related security incidents in recent years?
3. What are the most common types of computer security
attacks?
4. What are some characteristics of common computer
criminals, including their objectives, available resources,
willingness to accept risk, and frequency of attack?
Objectives…
5. What are the key elements of a multilayer
process for managing security vulnerabilities,
based on the concept of reasonable assurance?
6. What actions must be taken in response to a
security incident?
7. What is computer forensics, and what role does it
play in responding to a computer incident?
Unit -03 - Outline
3.1. IT Security Incidents
3.2. Types of Exploits
3.3. Types of Perpetrators
3.4. Implementing Trustworthy Computing
3.5. Risk Assessment
Unit -03 - Outline…
3.6. Establishing a Security Policy
3.7. Educating Employees and Contract Workers
3.7.1. Prevention
3.7.2. Detection
3.7.3. Response
IT Security
Incidents
Events and Incidents
IT Security Incidents: A Worsening Problem
● Security of information technology is of utmost importance
○ Safeguard;
■ Confidential data
■ Private customer and employee data
○ Protect against malicious acts of theft or disruption
○ Must be balanced against other business needs and
issues
● Number of IT-related security incidents is increasing
around the world
Why Computer Incidents Are So Prevalent
● Increasing complexity increases vulnerability
○ Computing environment is enormously complex
■ Continues to increase in complexity
■ Number of entry points expands continuously
■ Cloud computing and virtualization software
● Higher computer user expectations
○ Computer help desks under intense pressure
■ Forget to verify users’ IDs or check authorizations
● Computer users share login IDs and passwords
Why Computer Incidents Are So Prevalent…
● Expanding/changing systems equal new risks
○ Network era
■ Personal computers connect to networks with
millions of other computers
■ All capable of sharing information
● Information technology
○ Ubiquitous
○ Necessary tool for organizations to achieve goals
○ Increasingly difficult to match pace of technological
change
Why Computer Incidents Are So Prevalent…
Increased reliance on commercial software with known vulnerabilities
● Exploit
○ Attack on information system
○ Takes advantage of system vulnerability
○ Due to poor system design or implementation
● Patch
○ “Fix” to eliminate the problem
○ Users are responsible for obtaining and installing
○ Delays expose users to security breaches
Why Computer Incidents Are So Prevalent…
● Zero-day attack
○ Before a vulnerability is discovered or fixed
● Companies relying on commercial software
with known vulnerabilities
IT Security Incidents: A Worsening Problem
● Computer Emergency Response Team
Coordination Center (CERT/CC)
○ Charged with
■ Coordinating communication among experts
during computer security emergencies
■ Helping to prevent future incidents
● What about Nepal…
 Number
of
Vulnerabil
ities
Reported
to
CERT/CC
Types of Exploits
Events and Incidents
Types of Attacks
● Most frequent attack is on a networked computer from an outside
source
● Types of attacks
○ Virus
○ Worm
○ Trojan horse
○ Denial of service
○ Rootkit
○ Spam
○ Phishing (spear-phishing, smishing, and vishing)
○ …
Viruses
● Pieces of programming code
● Usually disguised as something else
● Cause unexpected and usually undesirable
events
● Often attached to files
● Deliver a “payload”
Viruses…
● Spread by actions of the “infected” computer user
○ Infected e-mail document attachments
○ Downloads of infected programs
○ Visits to infected Web sites
● Macro viruses
○ Most common and easily created viruses
○ Created in an application macro language
○ Infect documents and templates
Worms
● Harmful programs
○ Reside in active memory of a computer
○ Duplicate themselves
● Can propagate without human intervention
● Negative impact of virus or worm attack
○ Lost data and programs
○ Lost productivity
○ Effort for IT workers
Cost Impact of Worms
Trojan Horses
● Malicious code hidden inside seemingly
harmless programs
● Users are tricked into installing them
● Delivered via email attachment, downloaded
from a Web site, or contracted via a removable
media device
● Logic bomb
○ Executes when triggered by certain event
Denial-of-Service (DoS) Attacks
● Malicious hacker takes over computers on the Internet
and causes them to flood a target site with demands
for data and other small tasks
○ The computers that are taken over are called
zombies
● Does not involve a break-in at the target computer
○ Target machine is busy responding to a stream of
automated requests
○ Legitimate users cannot get in
Denial-of-Service (DoS) Attacks
● Spoofing generates a false return address on
packets
● Ingress filtering - When Internet service
providers (ISPs) prevent incoming packets
with false IP addresses from being passed on
● Egress filtering - Ensuring spoofed packets
don’t leave a network
Rootkits
● Set of programs that enables its user to gain
administrator-level access to a computer
without the end user’s consent or knowledge
● Attacker can gain full control of the system
and even obscure the presence of the rootkit
● Fundamental problem in detecting a rootkit is
that the operating system currently running
cannot be trusted to provide valid test results
Spam
● Abuse of email systems to send unsolicited email to large
numbers of people
○ Low-cost commercial advertising for questionable
products
○ Method of marketing also used by many legitimate
organizations
● Completely Automated Public Turing Test to Tell Computers
and Humans Apart (CAPTCHA)
○ Software generates tests that humans can pass but
computer programs cannot
Phishing
● Act of using email fraudulently to try to get the recipient to
reveal personal data
● Legitimate-looking emails lead users to counterfeit Web
sites
● Spear-phishing
○ Fraudulent emails to an organization’s employees
● Smishing
○ Phishing via text messages
● Vishing
○ Phishing via voice mail messages
Phishing
 Types of
Perpetrators
To Be or Not To Be
Ethical
Perpetrators
● Motives are the same as other criminals
● Perpetrators include:
○ Thrill seekers wanting a challenge
○ Common criminals looking for financial gain
○ Industrial spies trying to gain an advantage
○ Terrorists seeking to cause destruction
Perpetrators
● Different objectives and access to varying
resources
● Different levels of risk to accomplish an
objective
Classifying Perpetrators of Computer Crime
Classifying Perpetrators of Computer Crime
Classifying Perpetrators of Computer Crime
Hackers and Crackers
● Hackers
○ Test limitations of systems out of intellectual
curiosity
■ Some smart and talented
■ Others inept; termed “lamers” or “script kiddies”
● Crackers
○ Cracking is a form of hacking
○ Clearly criminal activity
Malicious Insiders
● Major security concern for companies
● Estimated 85 percent of all fraud is committed
by employees
● Fraud within an organization is usually due to
weaknesses in internal control procedures
● Collusion
○ Cooperation between an employee and an
outsider
Malicious Insiders
● Insiders are not necessarily employees
○ Can also be consultants and contractors
● Extremely difficult to detect or stop
○ Authorized to access the very systems they
abuse
● Negligent insiders have potential to cause
damage
Industrial Spies
● Use illegal means to obtain trade secrets from competitors
● Trade secrets are protected by the Economic Espionage Act
of 1996
● Competitive intelligence
○ Uses legal techniques
○ Gathers information available to the public
● Industrial espionage
○ Uses illegal means
○ Obtains information not available to the public
Cybercriminals
● Hack into corporate computers and steal
● Engage in all forms of computer fraud
● Chargebacks are disputed transactions
● Loss of customer trust has more impact than fraud
● To reduce the potential for online credit card fraud:
○ Use encryption technology
○ Verify the address submitted online against the issuing
bank
○ Request a card verification value (CVV)
○ Use transaction-risk scoring software
Cybercriminals…
● Smart cards
○ Contain a memory chip
○ Are updated with encrypted data every time
the card is used
○
Hacktivists and Cyberterrorists
● Hacktivism
○ Hacking to achieve a political or social goal
● Cyberterrorist
○ Attacks computers or networks in an attempt to
intimidate or coerce a government in order to
advance certain political or social objectives
○ Seeks to cause harm rather than gather information
○ Uses techniques that destroy or disrupt services
US Federal Laws for Prosecuting Computer
Attacks
Nepal Laws for Prosecuting Computer Attacks
● The Electronic Transactions Act 2063 (ETA ) to
regulate cybercrimes. Section 47 of the Act is the most
used section to prevent cybercrime in Nepal. This
section stipulates that if a person publishes or displays
material against morals, etiquette, hatred, or malice on
a computer, internet, and other electronic media, the
culprit can be punished with a fine of 1 lakh rupees or
imprisonment for up to 5 years or both.
Nepal Laws for Prosecuting Computer Attacks
● Section 48 of the Act is also used customarily, which stipulates that
if any person who has access to any record, book, register,
correspondence, information, documents or any other material
under the authority conferred under this Act or Rules framed
hereunder divulges or causes to divulge confidentiality of such
record, books, registers, correspondence, information, documents
or materials to any unauthorized person, he/she shall be liable to
the punishment with a fine not exceeding Ten Thousand Rupees
or with imprisonment not exceeding two years or with both,
depending on the degree of the offense.
Law of Nepal relating to pirating, destroying, or
altering computer source data?
● As per the ETA, 2063 (section 44), if any person,
knowingly or with malafide intention, pirates, destroys,
alters computer sources code to be used for any
computer, computer programmer, computer system or
computer network or cause, other to do so, he/she
shall be liable to the punishment with imprisonment not
exceeding three years or with a fine not exceeding two
hundred thousand Rupees or with both.
Unauthorized access to computer materials, a
cybercrime
● Unauthorized Acess is an offense punishable by law. If any person
to have access to any program, information, or data of any
computer, uses such a computer without authorization of the
owner of or the person responsible for such a computer or even in
the case of authorization, performs any act to have access in any
program, information or data contrary to from such authorization,
such a person shall be liable to the punishment with the fine not
exceeding Two Hundred thousand rupees or with imprisonment
not exceeding three years or with both depending on the
seriousness of the offense.[Section 45, ETA 2063]
Provisions regarding damage to any computer
and information system
● If any person knowingly and with a mala fide intention to
cause wrongful loss or damage to any institution destroys,
damages, deletes, alters, disrupts any information of any
computer source by any means or diminishes value and
utility of such information or affects it injuriously or causes
any person to carry out such an act, such a person shall be
liable to the punishment with the fine, not exceeding two
thousand Rupees and with imprisonment not exceeding
three years or with both.[Section 46, ETA 2063]
Publication of illegal materials in electronic
form
● If any person publishes or displays any material in electronic
media including computer, internet which is prohibited to publish or
display by the prevailing law or which may be contrary to public
morality or decent behavior or any type of material that may
spread hate or jealousy against anyone or which may jeopardize
the harmonious relations subsisting among the peoples of various
castes, tribes and communities shall be liable to the punishment
with the fine not exceeding One Hundred Thousand Rupees or
with the imprisonment not exceeding five years or with
both.[Section 47, ETA 2063]
Provisions of the law of Nepal regarding
computer fraud
● If any person, intending to commit any fraud or any other illegal
act, creates, publishes, or otherwise provides a digital signature
certificate or acquires benefit from the payment of any bill, the
balance amount of any one's account, any inventory or ATM card
in connivance of or otherwise by committing any fraud, amount of
the financial benefit so acquired shall be recovered from the
offender and be given to the person concerned and such an
offender shall be liable to the punishment with a fine not exceeding
one hundred thousand Rupees or with imprisonment not
exceeding two years or with both.[Section 52, ETA2063]
Person who abets others to commit a
computer-related offense
● If any person abuts another to commit an offense
relating to computer under ETA Act or who attempts or
is involved in a conspiracy to commit such an offense
shall be liable to the punishment of a fine not
exceeding fifty thousand Rupees or imprisonment not
exceeding six months or with both, depending on the
degree of the offense.[Section 53, ETA 2063]
Punishment for an offence committed outside
Nepal
● If any person commits any act which constitutes
an offense under ETA Act and which involves the
computer, computer system, or computer network
system located in Nepal, even though such an act
is committed while residing outside Nepal, a case
may be filed against such a person and shall be
punished accordingly. [Section 55, ETA 2063]
Implementing
Trustworthy
Computing
Trust & Worthy
Implementing Trustworthy Computing
● Delivers
secure, private,
and reliable
computing
● Based on
sound business
practices
Implementing Trustworthy Computing
● Security of any system or network
○ Combination of technology, policy, and people
○ Requires a wide range of activities to be effective
● Systems must be monitored to detect possible
intrusion
● Clear reaction plan addresses:
○ Notification, evidence protection, activity log
maintenance, containment, eradication, and
recovery
Risk Assessment
Assess the Risk in Advance
Risk Assessment
● Process of assessing security-related risks:
○ To an organization’s computers and
networks
○ From both internal and external threats
● Identifies investments that best protect from
most likely and serious threats
● Focuses security efforts on areas of highest
payoff
Risk Assessment…
Eight-step risk assessment process
● #1 Identify assets of most concern
● #2 Identify loss events that could occur
● #3 Assess likelihood of each potential threat
● #4 Determine the impact of each threat
● #5 Determine how each threat could be mitigated
● #6 Assess feasibility of mitigation options
● #7 Perform cost-benefit analysis
● #8 Decide which countermeasures to implement
Risk Assessment…
Risk Assessment…
Establishing a
Security Policy
Policy and Practice in Place
Establishing a Security Policy
● A security policy defines:
○ Organization’s security requirements
○ Controls and sanctions needed to meet the
requirements
● Delineates responsibilities and expected behavior
● Outlines what needs to be done
○ Not how to do it
● Automated system policies should mirror written
policies
Establishing a Security Policy…
● Trade-off between:
○ Ease of use
○ Increased security
● Areas of concern
○ Email attachments
○ Wireless devices
● VPN uses the Internet to relay communications but
maintains privacy through security features
● Additional security includes encrypting originating and
receiving network addresses
 Educating
Employees and
Contract Workers
Educate and Empower
Educating Employees, Contractors, and
Part-Time Workers
● Educate and motivate users to understand and follow policy
● Discuss recent security incidents
● Help protect information systems by:
○ Guarding passwords
○ Not allowing sharing of passwords
○ Applying strict access controls to protect data
○ Reporting all unusual activity
○ Protecting portable computing and data storage devices
 Prevention
Prevention is @gain the
Best Policy
Prevention
● Implement a layered security solution
○ Make computer break-ins harder
● Installing a corporate firewall
○ Limits network access
● Intrusion prevention systems
○ Block viruses, malformed packets, and other threats
● Installing antivirus software
○ Scans for sequence of bytes or virus signature
○ United States Computer Emergency Readiness Team
(US-CERT) serves as clearinghouse
Prevention…
Prevention…
Prevention….
● Safeguards against attacks by malicious insiders
● Departing employees and contractors
○ Promptly delete computer accounts, login IDs,
and passwords
● Carefully define employee roles and separate key
responsibilities
● Create roles and user accounts to limit authority
Prevention…
● Defending against cyberterrorism
○ Department of Homeland Security and its National Cyber
Security Division (NCSD) is a resource
■ Builds and maintains a national security cyberspace
response system
■ Implements a cyber-risk management program for
protection of critical infrastructure, including banking
and finance, water, government operations, and
emergency services
● How about Nepal?
Prevention…
● Conduct periodic IT security audits
○ Evaluate policies and whether they are
followed
○ Review access and levels of authority
○ Test system safeguards
○ Information Protection Assessment kit is
available from the Computer Security
Institute
 Detection
Detect if can’t Prevent
Detection
● Detection systems
○ Catch intruders in the act
● Intrusion detection system
○ Monitors system/network resources and activities
○ Notifies the proper authority when it identifies:
■ Possible intrusions from outside the organization
■ Misuse from within the organization
○ Knowledge-based approach
○ Behavior-based approach
Response
If you Detect,
Response,
X!ReactX
Response
● Response plan
○ Develop well in advance of any incident
○ Approved by:
■ Legal department
■ Senior management
● Primary goals
○ Regain control and limit damage
○ Not to monitor or catch an intruder
● Only 56% have response plan
Response…
● Incident notification defines:
○ Who to notify
○ Who not to notify
● Security experts recommend against releasing specific
information about a security compromise in public forums
● Document all details of a security incident
○ All system events
○ Specific actions taken
○ All external conversations
Response…
● Act quickly to contain an attack
● Eradication effort
○ Collect and log all possible criminal evidence
○ Verify necessary backups are current and complete
○ Create new backups
● Follow-up
○ Determine how security was compromised
■ Prevent it from happening again
Response…
● Review
○ Determine exactly what happened
○ Evaluate how the organization responded
● Weigh carefully the amount of effort required to
capture the perpetrator
● Consider the potential for negative publicity
● Legal precedent
○ Hold organizations accountable for their own IT
security weaknesses
Computer Forensic
F1
It Helps!
Computer Forensics
● Combines elements of law and computer
science to identify, collect, examine, and
preserve data and preserve its integrity so it is
admissible as evidence
● Computer forensics investigation requires
extensive training and certification and
knowledge of laws that apply to gathering of
criminal evidence
 So the

Summary
Summary
● Ethical decisions in determining which information systems
and data most need protection
● Most common computer exploits
○ Viruses
○ Worms
○ Trojan horses
○ Distributed denial-of-service attacks
○ Rootkits
○ Spam
○ Phishing, spear-fishing, smishing, vishing
Summary…
● Perpetrators include:
○ Hackers
○ Crackers
○ Malicious insider
○ Industrial spies
○ Cybercriminals
○ Hacktivist
○ Cyberterrorists
Summary…
● Must implement multilayer process for managing security
vulnerabilities, including:
○ Assessment of threats
○ Identifying actions to address vulnerabilities
● User education
● IT must lead the effort to implement:
○ Security policies and procedures
○ Hardware and software to prevent security breaches
● Computer forensics is key to fighting computer crime in a
court of law