FireEye discovered a new kind of malware today that thwarts antivirus software by, well, taking a nap. Nap, as it’s called, was found attacking financial institutions and hides hackers’ identities in the same way the New York Times‘ hackers stayed anonymous.

Currently, researchers are not sure how it enters your system, but they consider it a “malicious downloader” that sneaks in under the radar by putting itself to sleep. That is, many antivirus companies use what is called automated analysis systems. These systems watch a sample of whatever happens to be coming into your computer at that point in time and sees if it needs to quarantine anything. This screening process generally lasts seconds, according to FireEye senior malware researcher Abhishek Singh.

“Nap stops its execution for 10 minutes. So automated analysis system will time out and will not be able to capture its malicious behavior,” Singh told VentureBeat in an email.

Once in your system, Nap downloads a file called newbos2.exe that is considered an “information stealer.” FireEye found Nap

The malware writers protect themselves in a similar way to that of the attackers behind the New York Times hack. Both use a the Fast Flux method, which hackers use to hide their location by using a number of IP addresses from all over the globe. Singh explained that simply because the IP addresses are coming from locations far away from each other, it takes time to discover which, if any, is the right one.

Singh emphasized, however, that law enforcement has no evidence that the two attacks are connected.

Napping child image via Shutterstock

During the next few years, mobile security will become an even bigger issue than it is today. Smartphones are basically tiny PCs, and as such, we have to worry about how safe our data is on smart devices.

Mobile security startup TrustGo addresses that very real problem when it comes to Android, the most popular smartphone OS by market share worldwide. Its new TrustGo Antivirus & Mobile Security Android app secures your mobile personal data with several layers of protection and recovery.

“We look deeper than just malicious apps…we look at the permissions apps are asking for and prevent bad apps from getting on users phones to begin with,” said TrustGo head of marketing Jeff Becker at the DEMO Conference in Santa Clara, Calif., “TrustGo has scanned and categorized more than 1.5 million pieces of code. 17 percent of the apps we’ve scanned have malicious code in them, that’s 1 in 6 apps.”

The core of TrustGo’s focus is on protecting users from bad Android apps. The platform has struggled with malware and spyware apps, thanks to an app marketplace that resembles the Wild West. Apple’s App Store has a much more strict approval process so it it is easier to sneak shady apps into Google Play.

TrustGo lists the following features for the app:

• Security Scanner – On-demand or scheduled scans of all the apps on your phone, plus instant scans of new apps you download.
• System Manager – System tools and reports to manage apps, memory, data usage and more.
• Privacy Guard – A dashboard view of all the apps with access to your most sensitive data.
• Secure Web Browsing – Get an instant notification when a site you’re browsing is known to be malicious or par t of a phishing scheme.
• Data Backup – Store a backup copy of your phone’s data securely in the cloud.
• Device Protection – Remotely locate your phone if it is missing or stolen. Lock it, set off an alarm or wipe your personal information.

Android security concerns have been enough to attract TrustGo competitors like Lookout, AVG, and Avast to also play in this arena. However, even with so much compeitition, the TrustGo app has already garnered 250,000 downloads and a 4.6 out of 5 rating on Google Play.

Menlo Park, Calif.-based TrustGo was founded in June 2011 and has 45 employees. It is backed by $1.5 million in seed funding from Northern Light Venture Capital.

Check out TrustGo’s video explainer below:

Photo credit: Pavel Ignatov/Shutterstock

TrustGo is one of 80 companies chosen by VentureBeat to launch at the DEMO Spring 2012 event taking place this week in Silicon Valley. After we make our selections, the chosen companies pay a fee to present. Our coverage of them remains objective.

Peiter Zatko, a famous hacker (known as Mudge) from the early L0pht group, is now program manager for cyber security at the Pentagon’s Defense Advanced Research Projects Agency. At his keynote speech at the Black Hat security conference, he painted a grim picture of the cyber security landscape — and he proposed a new DARPA program to deal with the problems.

He noted that the number of viruses keeps rising, even though the amount of money the federal government is spending on cyber security is also rising.

“It looks like the Russian government during the Cold War,” he said, referring to how rising defense spending drove the old Soviet Union into ruin.

Zatko analyzed 9,000 samples of malware code and found that, on average, each consisted of 125 lines of software code. That’s not a lot of cost, time, or engineering effort. By comparison, the most sophisticated cyber protection software uses about 10 million lines of code. And, based on research by IBM, there are one to five bugs introduced in every 1,000 lines of code, Zatko said.

Malware writers thrive by finding bugs and exploiting the vulnerabilities that the bugs introduce. Modern day operating systems may consist of 150 million lines of code, which means that each new OS can introduce 150,000 bugs to exploit. These numbers make it seem like keeping up with the bad guys is a losing game, Zatko said.

Zatko was also cynical about antivirus software vendors. He said those vendors are motivated to create fixes that eliminate each new branch of malware. But he said the heavy cost of investing in software that takes out a whole new source of viruses — what he calls a tree — tends to scare off the antivirus vendors. They can charge subscription fees for patches that fix each little branch, but they usually can’t monetize a gigantic fix so easily. So the antivirus vendors are commercially motivated to keep putting Band-aids on the problem of an explosion of malware.

That’s why Zatko is proposing a new DARPA-funded program to fund lots of “maker spaces” for hackers and boutique security firms. He is doing so to try to get around the huge government contractors that tend to move too slow. He wants to fund the equivalent of the new Homebrew Computer Club, the creative maelstrom that led to the creation of the first personal computers. Dreamed up over the past nine months, the Cyber Fast Track is aimed at accelerating the government’s interaction with security startups and small vendors.

“The average government program is created in 81 months,” he said. “That’s six years. …Time is a hot commodity in cyber.”

He pointed out some examples of projects that got funding and took a few people a small amount of money to produce. He said one project created “attritable” unmanned aerial vehicles, with five people working for half a year. Zatko said this program is why he signed on with the government to get something done. Under the programs, the government gets government-purpose rights for whatever gets created and the creators can commercialize the technology.

About 20 to 100 projects will be funded each year, with 14 days as the target time to create a contract.

“We have to come up with a new process,” he said. “This is cool stuff. We can hack this stuff together.”

The case involved one of Russia’s few stand-out successes when it comes to technology. The kidnapping drew attention to the perils of crime in Russia — risks that admittedly exist in any country — at a time when the Russian government is trying to establish a high-tech industry in Russia. It reminds me of our story entitled, “Investing in Russia? Better hire bodyguards and hunker down.”

The raid freed Ivan Kaspersky, the 20-year-old son of Eugene, who founded one of the world’s largest antivirus software companies. Ivan Kaspersky was kidnapped Tuesday on his way to work at InfoWatch, a company owned by his mother, Natalya Kaspersky. The kidnappers had asked for $4.3 million in random money.

In a statement, the Moscow-based company said, “Kaspersky Lab confirms that an operation to free Ivan Kaspersky was carried out successfully by the Federal Security Service (FSB), the Criminal Investigation Department of the Moscow Police and Kaspersky Lab’s own security personnel. Ivan is alive and well and is currently located at a safe location. No ransom was paid during the rescue operation. Eugene Kaspersky and Natalya Kaspersky are currently unavailable for comment. “

General Atlantic bought the stake from Natalya Kaspersky, chairman and co-founder of Kaspersky Lab, which is based in Moscow. The company has more than 300 million users of its antivirus software and other security products. It adds more than 150,000 new users every day. Kaspersky Lab has more than 2,000 employees. General Atlantic will become the second-largest shareholder and will take a board seat. Eugene Kaspersky, chief executive, still owns 50 percent of the company.

The company reported revenue of $391 million in 2009 and its revenues grew an estimated 35 percent in 2009. The company is the No. 4 security software vendor, behind Symantec, McAfee and Trend Micro.

Federated Networks is one of 70 companies chosen by VentureBeat to launch at the DEMO Fall 2010 event taking place this week in Silicon Valley. After our selection, the companies pay a fee to present. Our coverage of them remains objective.

Today at the DEMO conference, Federated Networks plans to step up and take on one of the largest players in Internet security, Symantec, by unveiling its own cybersecurity suite designed to be cheaper and faster for the typical consumer.

The cybersecurity company will begin offering a security suite for about one-tenth the price of products like Symantec’s Norton Antivirus and McAfee’s antivirus programs.

Along the way to unseating the giants, Federated aims to replace the SSL encryption protocol that most websites use today with its Application Secure Layer Protocol. In so doing, it hopes to prevent a particular form of intrusion on e-commerce transactions called man-in-the-middle attacks, as well as better-known phishing threats, where hackers try to trick consumers with fake banking or shopping websites. The software also targets keystroke-logging and other input-logging spyware programs, which can be used to capture users’ passwords.

Federated Networks was founded in 2005 but has since worked in stealth mode under David Lowenstein, the board chairman of The Princeton Review. Lowenstein also has experience with several other public companies, including SourceCorp and Capital Environmental Services.

The software developer currently employs 11, and has raised about $5 million over several rounds of funding.

http://c.brightcove.com/services/viewer/federated_f8/980795693

The investment comes on the heels of Intel’s $7.68 billion acquisition of antivirus vendor McAfee, as well as a number of other deals that have made security technology companies a hot commodity. Prague-based Avast has upset the traditional antivirus market by giving away its software for free. In this “freemium” model, the company tries to upsell users on paid software with more features. The software protects more than 100 million users.

The company depends on word-of-mouth marketing from its users, and its software now protects about one out of every five computers around the world. Avast claims that independent tests show its software protects better than paid products.

Avast was founded in 1988 by Eduard Kucera and Pavel Baudis. They have seen the number of virus threats and the scope of their business grow dramatically in the past two decades. “After writing a program to remove the Vienna virus back in 1988, it was about six months before I saw another virus. Now our Virus Lab adds 3,000 new virus samples a day to its database,” said Baudis.

The company launched its free distribution model in the early 2000s. Rivals include Intel-McAfee (merger pending), Symantec, Trend Micro, AVG Technologies, Avira, Panda, Kaspersky, F-Secure, Bit-Defender and Eset. The company has 120 employees and has not received outside funding before.

The per share price is 60 percent more than McAfee’s $29.93 closing price on Wednesday. McAfee shares jumped 58 percent after the deal was made public to $47.42 in pre-market trading, while Intel shares dipped 2.5 percent to $19.11, the AP reports.

The boards of both companies have unanimously approved the deal, but it’s still pending McAfee shareholder and regulatory approval. Intel said the deal “reflects that security is now a fundamental component of online computing.” Intel went on to say that security is now just as important to the company as energy efficiency and internet connectivity.

McAfee will become a wholly owned subsidiary of Intel and will report to its Software and Services Group. Both companies are based in Santa Clara, Calif. Founded in 1987, McAfee has some 6,100 employees, and saw $2 billion in 2009 revenue.

Intel will benefit from McAfee’s entrenched position in the security field, and McAfee may be able to optimize its notoriously performance-hungry software now that it’s a part of the company that provides the CPUs to many computers.

Intel recently announced its best quarter ever with $2.9 billion in profit, thanks to an influx of delayed computer purchases by businesses.

Photo via cytech