Risky Business #825: "Palo Alto Networks blames it on the boogie"
February 18, 2026
Host: Patrick Gray
Guests/Panel: Adam Boileau, James Wilson

Episode Overview

In this episode, Patrick Gray, Adam Boileau, and James Wilson dive into the week’s top security news stories, from the Palo Alto Networks China attribution controversy to the economics of cyber scam states in Southeast Asia, active exploitation of major vulnerabilities, and the realities of AI and agentic tools in modern cyber offense and defense. The team also explores “old school” cybercrime tactics making a comeback and brings in in-depth research on password manager security. Sponsor segment features Adam Poynton, CEO of Knock Knock, discussing their new Windows agent and building for legacy enterprise environments.

Key Discussion Points and Insights

1. Ransomware & Data-Only Extortion Trends

[00:55]

• Arctic Wolf Report: Data-only extortion on the rise, though ransomware still dominates caseloads.
• Long-Tail vs. Immediate Impact: Data theft disperses costs over time and onto affected individuals rather than immediate business outages.
  • Adam: “The upfront impact of encrypting ransomware... is very immediate. Whereas the data theft one, the costs... are much longer tail, they're spread out across the user base...” [01:57]
• Societal trade-off suggested: data extortion is the "lesser evil" compared to outages impacting, for example, hospitals.

2. Palo Alto Networks’ China Attribution Controversy

[03:01]

• Reuters Story: Senior execs removed Chinese threat actor attribution to avoid potential Beijing retaliation.
• Corporate Dilemmas:
  • Adam: “If you're someone like Palo Alto... trying to have staff and everything there, at that point it is kind of too late.” [04:40]
  • Adam and James both express sympathy and realism—governments should lead attributions, and businesses will prioritize shareholder safety.
  • James: “This is a private entity. It's a business. They're going to prioritize shareholders, profits, et cetera... I also don't think that the lack of attribution makes a material impact to the value of the research they did.” [06:27]

3. Southeast Asia’s Scam Economy and “Scam States”

[07:04]

• Catalin Cimpanu’s Bulletin: Cambodian government promises to dismantle scam networks—but skepticism reigns.
• Scam Centers as GDP: 30%+ of Cambodia’s GDP, up to 68% in Laos, driven by cyber scams.
  • Patrick: “Can you think of any government that is willingly going to destroy economic activity within its borders that contributes 30% of GDP?” [08:05]
  • Adam: “It’s kind of too big to fail... Even if Cambodia is entirely above board... it's not going to change the existence of a very, very large pile of cash.” [08:45]
• James: “This is straight up supply and demand. It doesn't do anything to address either side of that equation... someone else will come up and want to set up the next industry around this.” [11:01]
• Foreign aid and demand-side reduction mentioned as only viable long-term strategies.

4. Actively Exploited: BeyondTrust PAM Vulnerability

[12:14]

• Recent high-severity BeyondTrust bug (CVSS 9+) was flagged and is now actively exploited.
  • Adam: “There are bugs like this, are in big demand by attackers and of course they're going to be using it... it's such a sweet place to shell that.” [12:42]
• Observed used by groups like Silk Typhoon, U.S. Treasury targeted.
• Commentary on the risky reality of internet-exposed PAM systems.

5. CISA: Staff on Furlough and Ongoing Challenges

[13:18]

• Funding issues at DHS severely impacting CISA; over a third of staff working without pay.
  • Adam: “Their election security work... was great work. But of course now they got punished for it... not surprised people are quitting.” [14:09]
• High turnover, low morale—“CISA’s century of humiliation.”

6. Kimwolf Botnet Fumbles and i2p Overload

[15:25]

• Kimwolf: A residential proxy IoT botnet keeps losing endpoints due to operator mistakes.
  • Patrick: “Instead of using Tor, we're going to be like anonymity network hipsters, and we're going to use i2p... when they joined like 700,000 boxes to this tiny little anonymity network, it started falling over.” [15:48]
  • Adam: “You can't put 700,000 nodes onto a 50,000 node network and still have anonymity... you have to be the crowd, not be the crowd.” [16:56]
• James: “This is a team that has some coaching opportunities ahead of them... not a highly skilled operation.” [18:12]

7. Old School Attacks: IIS SEO Botnet & VK Malicious Extensions

[18:48] "Back to the Future" Section

• Elastic's write-up: BadIIS module spreading casino/porn SEO spam via hacked IIS servers.
  • Patrick: “Such old school black hattery... It's just, it's just kind of funny and, you know, it's kind of heartwarming in a way...” [19:56]
• VK (vContacte) breach: Malicious Chrome extensions compromised 500,000+ accounts for click fraud.
  • James: “Chef kiss bit... you could put in your payment details and get some extra merch as well. And then they snapped your payment details as well. It was just like. It was beautiful.” [21:45]

8. Password Manager Security Research—ETH Zurich & Swiss Institute

[22:49]

• ETH Zurich & Università della Svizzera Italiana paper: Password manager claims of zero-visibility are nuanced.
  • Account recovery and “layers and features around them” present real attack vectors.
  • James: “When the password managers claim they can't see your password, it's not entirely true... these are relatively secure but... features around them quickly expose you to problems.” [24:51]
  • Apple anecdote: For mass markets, key recovery is a necessity, so true zero-knowledge is opt-in.
• Adam: “You just have to trust people who write your software... compartmentalize down who inside the company really matters...” [27:02]
• Emphasis on compartmentalization and validating internal controls.

9. APTs & AI: Offensive Use, Model Cloning, and Detection

[29:59] and following—a core section

• Google report: AI agentic capabilities increasingly found in offensive operations.
  • Debate over speed/scale vs. stealth; attackers are still experimenting but adoption is fast.
  • James: “It’s not just little skunk works [anymore], I think this is now probably a bit more mainstream... and rapidly changing the visibility of this from frontier model perspective is the most interesting thing.” [31:33]
• Agentic AI in hacking—disposable tools and rapid iteration.
  • Adam: “Being able to build exactly what you need when you need it... The strength of modern AI dovetails exactly with that.” [33:33]
• Model distillation attacks:
  • Research: 70,000 prompting pairs sufficient to clone Llama, approaching 90% ChatGPT performance [36:47].
  • James: “This is how an adversary goes from an open weights, open source model, adds in these prompts, closes the gap of reasoning and the other skills...” [36:47]
  • Adam: “How do you stop this?... We've got so much experience in bypassing scraping prevention techniques, we're kind of into a how do you stop web scraping problem at that point.” [39:42]
• Commercial “AI security” startups, mostly proxy front-ends; real risks remain at authentication and access control layers.
  • James: “All of these things are basically just like little proxy shims stuffed into the front of these agents. And you’re not particularly bullish on the technology...” [41:28]

10. Oddities & Quick Hits

[44:25+]

• U.S.: Police use Bluetooth scanner to track kidnapped woman by detecting her pacemaker’s signals from helicopter.
  • Adam: “It’s so cyberpunk dystopic future right there. And yet also quite a legitimately good idea.” [45:41]
• Dutch official jokes about “jailbreaking an F-35”—Patrick skeptical about real import.
• Dutch police accidentally expose crime witness uploads; man extorts police, is immediately arrested.
  • Adam: “Who could have forced it.” [48:22]

Notable Quotes

• “If you're someone like Palo Alto... trying to have staff and everything there, at that point it is kind of too late.”
  —Adam Boileau [04:40]

• “This is a private entity. It's a business. They're going to prioritize shareholders, profits, et cetera.”
  —James Wilson [06:27]

• “Can you think of any government that is willingly going to destroy economic activity within its borders that contributes 30% of GDP?”
  —Patrick Gray [08:05]

• “All of these things are basically just like little proxy shims stuffed into the front of these agents. And you're not particularly bullish on the technology.”
  —Patrick Gray, summarizing James Wilson's views on new AI security tools [41:28]

• “You just have to trust people who write your software... compartmentalize down who inside the company really matters.”
  —Adam Boileau [27:02]

• “This is how an adversary goes from an open weights, open source model, adds in these prompts, closes the gap of reasoning and the other skills... and if they can get the chips... we have completely lost visibility to these attacks.”
  —James Wilson [36:47]

Sponsor Segment: Knock Knock – Embracing Legacy, Windows, and Self-Defending Hosts

[52:46+]
Adam Poynton (Knock Knock CEO) details the journey of building agents for legacy systems (Solaris SPARC, HP-UX RISC) and the practical realities of using GenAI tools for fuzzing and automated tests—even with old-school C code.

• Windows Agent: Now available back to Windows Server 2019; seamless orchestration of Windows Firewall to provide micro-segmentation and "self-defending" hosts, especially for vulnerable jump hosts and internal-only assets.
  • “Self-defending hosts... instead of more of a centralized control approach.” —Adam Poynton [58:37]
• Cloud/SaaS Integrations: Support for AWS, Azure, DigitalOcean, Cloudflare allowlists, Salesforce—covering more of the modern environment and reducing attack surface “one asset at a time.”

Timestamps for Major Segments

• Data-only extortion trends: [00:55]
• Palo Alto/China attribution: [03:01]
• Scam state GDP/prospects: [07:04]
• BeyondTrust active exploitation: [12:14]
• CISA/DHS issues: [13:18]
• Kimwolf Botnet & i2p: [15:25]
• IIS SEO Botnet/Old School: [18:48]
• VK Chrome extensions: [21:45]
• Password manager security: [22:49]
• AI in offensive operations: [29:59]
• Model distillation: [36:47]
• AI security startups: [41:28]
• Bluetooth/pacemaker case: [44:25]
• F-35 “jailbreak”: [46:06]
• Dutch police file sharing mishap: [47:27]
• Sponsor segment – Knock Knock: [52:46]

Episode Flow & Tone

Fast-paced and analytic, with the hosts’ trademark dry wit and candor. Technical commentary is grounded and actionable, often referencing personal experience and long-term trends. Discussions balance skepticism with pragmatic realism, particularly around vendor, government, and criminal behavior.

Useful Resources

• Arctic Wolf Report: Data-only extortion trends
• Catalin Cimpanu: Scam state GDP breakdowns (Risky Bulletin)
• Elastic: IIS SEO botnet report
• ETH Zurich password manager research
• Google/AWS research on AI model distillation, agentic cyber threats

For more, visit the Risky Business website for show notes and subscription info.