Li Xiaoyu had a problem. At some point in his decade-long hacking spree with former college classmate Dong Jiazhi, as alleged in a recent Justice Department indictment, the Chinese national found himself unable to break into the mail server of a Burmese human rights group. The usual methods apparently hadn’t worked. For Li, the solution came from having a friend in high places: An officer with China’s Ministry of State Security handed him zero-day malware—unknown to security vendors, and so harder to defend against—to help finish off the job.
Other countries have long blurred the lines between criminal and state-sponsored hacking, particularly Russia, Iran, and North Korea. But in a detailed indictment unsealed by the Department of Justice Tuesday, the United States has for the…
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