TEHRAN (Iran News) – The Central Bank of Iran (CBI) is to permit imports of goods into the country via domestically mined cryptocurrencies (rial-based ones); i.e., Iran will soon join the club of national crypto owners.

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Security incidents have been reported in the UK, Germany, and Switzerland, while a similar intrusion is rumored to have also happened at a high-performance computing center located in Spain.

The first report of an attack came to light on Monday from the University of Edinburgh, which runs the ARCHER supercomputer. The organization reported “security exploitation on the ARCHER login nodes,” shut down the ARCHER system to investigate, and reset SSH passwords to prevent further intrusions, ZDnet reported.

The bwHPC, the organization that coordinates research projects across supercomputers in the state of Baden-Württemberg, Germany, also announced on Monday that five of its high-performance computing clusters had to be shut down due to similar “security incidents.” This included:

• The Hawk supercomputer at the High-Performance Computing Center Stuttgart (HLRS) at the University of Stuttgart
• The bwUniCluster 2.0 and ForHLR II clusters at the Karlsruhe Institute of Technology (KIT)
• The bwForCluster JUSTUS chemistry and quantum science supercomputer at the Ulm University
• The bwForCluster BinAC bioinformatics supercomputer at the Tübingen University

Reports continued on Wednesday when security researcher Felix von Leitner claimed in a blog post that a supercomputer housed in Barcelona, Spain, was also impacted by a security issue and had been shut down as a result.

More incidents surfaced the next day, on Thursday. The first one came from the Leibniz Computing Center (LRZ), an institute under the Bavarian Academy of Sciences, which said it was disconnected a computing cluster from the internet following a security breach.

The LRZ announcement was followed later in the day by another from the Julich Research Center in the town of Julich, Germany. Officials said they had to shut down the JURECA, JUDAC, and JUWELS supercomputers following an “IT security incident.”

New breaches also came to light today, on Saturday. German scientist Robert Helling published an analysis on the malware that infected a high-performance computing cluster at the Faculty of Physics at the Ludwig-Maximilians University in Munich, Germany.

The Swiss Center of Scientific Computations (CSCS) in Zurich, Switzerland also shut down external access to its supercomputer infrastructure following a “cyber-incident” and “until having restored a safe environment.”

ATTACKERS GAINED ACCESS VIA COMPROMISE SSH LOGINS

None of the organizations above published any details about the intrusions. However, earlier today, the Computer Security Incident Response Team (CSIRT) for the European Grid Infrastructure (EGI), a pan-European organization that coordinates research on supercomputers across Europe, has released malware samples and network compromise indicators from some of these incidents.

The malware samples were reviewed earlier today by Cado Security, a US-based cyber-security firm. The company said the attackers appear to have gained access to the supercomputer clusters via compromised SSH credentials.

The credentials appear to have been stolen from university members given access to the supercomputers to run computing jobs. The hijacked SSH logins belonged to universities in Canada, China, and Poland.

Chris Doman, Co-Founder of Cado Security, told ZDNet today that while there is no official evidence to confirm that all the intrusions have been carried out by the same group, evidence like similar malware file names and network indicators suggests this might be the same threat actor.

According to Doman’s analysis, once attackers gained access to a supercomputing node, they appear to have used an exploit for the CVE-2019-15666 vulnerability to gain root access and then deployed an application that mined the Monero (XMR) cryptocurrency.

Making matters worse, many of the organizations that had supercomputers go down this week had announced in previous weeks that they were prioritizing research on the COVID-19 outbreak, which has now most likely been hampered as a result of the intrusion and subsequent downtime.

NOT THE FIRST INCIDENT OF ITS KIND

These incidents aren’t the first time that crypto-mining malware has been installed on a supercomputer. However, this marks the first time when hackers did this. In previous incidents, it was usually an employee who installed the cryptocurrency miner, for their own personal gain.

For example, in February 2018, Russian authorities arrested engineers from the Russian Nuclear Center for using the agency’s supercomputer to mine cryptocurrency.

A month later, Australian officials began an investigation into a similar case at the Bureau of Meteorology, where employees used the agency’s supercomputer to mine cryptocurrency.

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Still, Iran’s stringent regulations on digital mining have forced many operators to move to more crypto-friendly countries, Amir-Hossein Saeedi Naeeni, a member of the Information and Communications Technology (ICT) Guild Organization’s blockchain commission, said.

Digital mining, due to its rapid global expansion, generated quite a lot of interest among Iran’s IT operators who bought and deployed bitcoin extraction gear in the past two years.

But the enthusiasm was sapped by the government’s introduction of regulatory measures, Saeedi claimed.

“The laws announced by government institutions for crypto mining are very strict in comparison to other industries in the country, causing many miners to stop operating or migrate to the regional countries for investment,” he said.

Saeedi said license tariffs and electricity costs are such that make crypto mining less profitable in Iran, adding they have to be revised and made more transparent along with the regulatory measures.

He touched on the “special” situation of the country which is under the most restrictive American sanctions ever.

“The digital mining industry, besides bringing currency into the country, can facilitate trade where traders can use cryptocurrencies to import goods and bypass payment problems resulting from the banking sanctions,” he added.

Last August, the Iranian government enacted legislation that officially recognized cryptocurrency mining as an industry. The law requires miners to pay an export premium on electricity and prohibits them from mining during peak electricity-usage hours.

Other than that, cryptocurrency trading remains illegal in Iran, meaning the newly-minted coins need to be exported and yields repatriated, making them subject to taxation.

The decision to regulate digital mining came in response to illegal miners who took advantage of the country’s cheap and subsidized energy to set up farms across Iran.

Last summer, officials blamed a surge in activities related to mining of digital currencies like bitcoin for up to seven percent increase in the country’s monthly electricity consumption.

Ministry of energy officials said at the time that the country’s power grid had become unstable as a result of increased mining of cryptocurrencies.

Nevertheless, media reports said last year that Iranian government officials were considering developing a domestic digital currency to counter US sanctions.

Alireza Daliri of the Directorate for Scientific and Technological Affairs of the Presidential Office said a number of domestic knowledge-based companies were working over the project in cooperation with the Central Bank of Iran (CBI).

The head of the company contracted by the CBI to design and develop a national digital currency said then a blockchain and cryptocurrency research lab had been set up in Iran.

Blockchain is a digital ledger or database where transactions in Bitcoin and other cryptocurrencies are recorded.

According to Iranian media reports, a state-backed national cryptocurrency backed by the local fiat unit, the rial, has already been developed but it has yet to be approved for use by the central bank.

Iran’s currency was targeted by the first round of US sanctions imposed in May 2018 after President Donald Trump withdrew from a landmark 2015 nuclear deal.

Under US pressures, the global banking network SWIFT has dropped Iran from its platform, making international financial settlements with the country almost impossible.

Blockchain and other digital ledgers holding cryptocurrency records process transactions without being controlled by any person or entity.

The US government has reportedly warned digital marketplaces that buy and sell bitcoin and companies that sell computers used to process bitcoin transactions to avoid providing services to Iranians.

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