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Six Chinese AI firms accused of aggressively copying US frontier models
NSA, CISA, and FBI accuse DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI of industrial-scale distillation of US frontier models via API abuse.
A joint NSA, CISA, and FBI release alleges six Chinese AI firms have extracted capabilities from US frontier models, including Claude, GPT, Gemini, and Grok, since at least late 2024, likely with Chinese government awareness. Tactics include bulk procurement of premium subscriptions with fraudulent accounts, proxy routing to evade geo-restrictions, and prompt injection to force models to reveal hidden chain-of-thought reasoning. Agencies recommend stronger identity verification, monitoring of anomalous usage, and quietly downgrading or adding noise to responses for suspected distillers, while warning these mitigations could frustrate legitimate users.
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Srsly Risky Biz: America's Drivers Licence Breach is a National Security Disaster
Dark web service Nexus sold 153 million US and Canadian driver's licenses, linked to identity verification firm IDScan under FBI investigation.
Krebs On Security reported that a dark web service called Nexus sold access to 153 million US and Canadian driver's licenses, claiming over a year of continuous exfiltration from a major identity verification company, with roughly 400,000 new licences added in a single day. Krebs verified the data as genuine and linked the incident via circumstantial evidence to identity verification firm IDScan, whose licences of senior US officials including Secretary of War Pete Hegseth appeared in the database; the FBI is investigating and IDScan has confirmed a breach inquiry. The article argues the data has national security implications, citing how Chinese APT espionage (Anthem, Equifax, Marriott, OPM) and Bellingcat investigations exploited leaked databases. Class action suits are being prepared, and the piece calls for stricter oversight of identity verification firms.
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Risky Bulletin: Two TeamPCP members arrested in Australia
Australian Federal Police arrested two alleged TeamPCP members behind supply-chain worm attacks that stole over 500,000 credentials from compromised open-source libraries.
The AFP arrested alleged TeamPCP leader Ruben Thomson, 21, and Louis Gaebler, 23, near Perth; both were charged and remain in custody. The group inserted a self-spreading credential-stealing worm into open-source projects including Trivy, KICS, LiteLLM, and Telnyx, harvesting more than 500,000 credentials used for network access, ransomware, extortion, and sales. About 78,000 tokens and secrets from nearly 2,200 organizations leaked online last month, and the FBI supported the investigation that began in April.
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Risky Bulletin: White House lets private companies carry out offensive cyber ops
A White House memo directs DHS to create a program letting vetted private companies conduct US-government-directed offensive cyber operations against cybercrime.
A presidential memo tasks the DHS National Coordination Center with building a program, under DOJ and DHS oversight, through which private-sector companies can conduct offensive cyber operations against large-scale cybercrime organizations. Requirements include secure facilities, vetted personnel, a $1 million escrow for damages, and written approvals co-signed by DHS and DOJ executive directors. The program must launch within 60 days, around October 11, expanding a March executive order targeting scam compounds, ransomware, and other large-scale cybercrime.
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US Agencies Warn China Is Systematically Extracting Frontier AI Capabilities
NSA, CISA and FBI warn Chinese AI firms including DeepSeek and Moonshot systematically extracted billions of tokens from US frontier models since late 2024.
The NSA, CISA, and FBI report that China-based AI companies including DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI extracted billions of tokens from US frontier models such as Claude, GPT-4/GPT-5, Gemini, and Grok 4 since late 2024. The distillation trained DeepSeek's R1 and V3 and Moonshot's Kimi-K2/K3 models, and the agencies mapped the tactics to MITRE ATLAS while noting additional novel techniques like subscription exploitation and request metadata sanitization. They describe the activity as a strategic economic threat to US technological leadership and recommend behavioral detection, differential privacy, and targeted cost-imposing responses.
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Srsly Risky Biz: China's Private Sector Botnets Are Worth Disrupting
DoJ seized domains of Chinese espionage botnet platforms QScan and QTRouter, run by private firm QTFY for MSS and PLA targeting.
The US Department of Justice disrupted QScan, a distributed vulnerability scanning system with nearly a decade of internet scanning data, and QTRouter, a covert communications platform routing traffic through compromised IoT devices, operated by QTFY under Chinese company Nanjing Xinjiuwei Network Technology. FBI and NSA advisories say QTFY customers include China's Ministry of State Security and the People's Liberation Army, targeting federal agencies, the US Senate, hospitals, telecoms and financial institutions. This is the third Chinese state-backed botnet disrupted since December 2023, following the KV botnet (Volt Typhoon) and Raptor Train (Flax Typhoon), and a sister network, JDY, has more than doubled since the KV disruption. Separately, the Qilin ransomware group claimed a breach of the ATF's CALEA system, briefly publishing 6.3 GB of case folders and forensic data.
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US and Canadian Court Records Breached Following Thomson Reuters Incident
Thomson Reuters disclosed a breach of its C-Track court software exposing sensitive case records across Ontario courts and 11 US states.
Thomson Reuters detected unauthorized access to its C-Track case management product on June 30 and disclosed the incident on September 2. Files from three Ontario courts and appellate courts in 11 US states plus the US Virgin Islands were affected, potentially exposing names, Social Security numbers, driver's license numbers, medical information, dates of birth and health insurance data. The company said financial transaction systems were not impacted and found no evidence of misuse; the investigation into exact scope is ongoing.
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