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FCPA Blog Daily News

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Wednesday
Dec172014

Shades of Sony: Kenya arrests 77 China nationals after raid on ‘cybercrime command center’

Kenyan authorities arrested 77 Chinese nationals for allegedly operating a cybercrime command center capable of disrupting the country’s communication and financial systems.

Police raided a rented house in Nairobi after a fire broke out there and found “sophisticated” hacking and communications equipment, the Nation reported.

Of the 77 Chinese nationals arrested, 40 were charged in a Nairobi court with illegally operating a radio station. The rest are being detained for investigation.

The cybercrime center, suspected to be the biggest of its kind in Africa, is capable of infiltrating bank accounts, M-Pesa accounts, and ATMs, according to the Nation.

M-Pesa (M for mobile, pesa is Swahili for money) is a mobile-phone based money transfer service. It was launched in 2007 by Vodafone in Kenya and Tanzania. Since then it has expanded to Afghanistan, South Africa, India, and Eastern Europe. M-Pesa users with a national ID card or passport can deposit, withdraw, and transfer money with a mobile device.

Last month, a previously unknown group that calls itself the Guardians of Peace hacked Sony Pictures Entertainment. The group has since posted online financial figures and tens of thousands of emails between top Sony executives. Some of the emails deal with costs for upcoming films, casting decisions, release schedules through 2018, and corporate royalties from iTunes, Spotify, and Pandora.

There has been speculation that North Korea organized or paid for the Sony hack. Last summer, the country denounced a Sony film, "The Interview," a comedy that involved a plot to assassinate North Korean leader Kim Jong Un.

In Kenya, the director of the country's criminal investigations department, Ndegwa Muhoro, said preliminary investigations showed the Chinese hackers were involved in money laundering and attacks on websites. They were also suspected of preparing to attack the country’s communication systems, police said.

The Chinese ambassador to Kenya, who was summoned to the Kenyan foreign affairs ministry, has promised to send investigators to work with the Kenyan authorities on the matter.

According to Mao Yizong, a spokesperson for the Chinese Embassy in Kenya, the Chinese arrested in Nairobi probably were part of a telecommunications fraud group who disguise themselves as prosecutors or authorities and extort Chinese citizens by saying they have committed financial offenses.

“Chinese police recently arrested some suspects in Zhejiang Province in China and some of them have confessed to belong to the group in Nairobi,” Mao said.

Mao downplayed the arrests in Kenya. He said the 77 Chinese are not well educated and don't have the capacity to engage in sophisticated cyber crimes or high-security hacks such as threatening the M-PESA network, ATM accounts, or security networks.

Sources: Nation, Standard Media, All Africa, The Guardian, Xinhua News

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Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.