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China Daily has reported that Chinese law enforcement officials raided a hacker training and resource operation in Hubei province with 12,000 members, shut it down and arrested three principals in November.

The paper said: “The three, who ran Black Hawk Safety Net, are suspected of offering others online attacking programs and software, a crime recently added to the Criminal Law. A total of 1.7 million yuan ($249,000) in assets were also frozen.

“Hubei province named Black Hawk Safety Net as the largest hacker training site in China, which openly recruited members and disseminated hacker techniques through lessons, Trojan software and online forum communications.

“Since it was established in 2005, the site had recruited more than 12,000 VIP members and collected more than 7 million yuan ($1.03 million) in membership fees. More than 170,000 people registered for free membership.”

The story also said: “According to a report released by the National Computer Network Emergency Response Coordination Center of China, the hacker industry in China caused losses of 7.6 billion yuan ($1.1 billion) in 2009.”

The New York Times reported that the shutdown actually occurred in November and quoted a noted China watcher as saying that the action was just “window dressing” since Chinese authorities have not shut down the well-known servers that were used to attack Google and other western companies recently.

Observers in the west have been trying to fathom the meaning of events in China ever since Marco Polo wandered there in the 13th century and lived to write a book about it. China is big, in some ways very disorganized and has a history of being strange to the rest of the world. It will be interesting to see if there are more take downs coming.

China Daily story here.

New York Times story here.

Update 02/09:

Dr. Johannes Ullrich of SANS said today on his Internet Stormcast that the Chinese press had reported that Black Hawk Safety Net was involved in using a botnet for denial-of-service extortion against Internet cafes. Authorities located them by tracing telephone calls. Ullrich described them as a “semi-organized group of script kiddies.”

Tom Kelchner