New 0-Day Attacks Linked to China’s ‘Volt Typhoon’

Malicious hackers are exploiting a zero-day vulnerability in Versa Director, a software product used by many Internet and IT service providers. Researchers believe the activity is linked to Volt Typhoon, a Chinese cyber espionage group focused on infiltrating critical U.S. networks and laying the groundwork for the ability to disrupt communications between the United States and Asia during any future armed conflict with China.

Versa Director systems are primarily used by Internet service providers (ISPs), as well as managed service providers (MSPs) that cater to the IT needs of many small to mid-sized businesses simultaneously. In a security advisory published Aug. 26, Versa urged customers to deploy a patch for the vulnerability (CVE-2024-39717), which the company said is fixed in Versa Director 22.1.4 or later.

Versa said the weakness allows attackers to upload a file of their choosing to vulnerable systems. The advisory placed much of the blame on Versa customers who “failed to implement system hardening and firewall guidelines…leaving a management port exposed on the internet that provided the threat actors with initial access.”

Versa’s advisory doesn’t say how it learned of the zero-day flaw, but its vulnerability listing at mitre.org acknowledges “there are reports of others based on backbone telemetry observations of a 3rd party provider, however these are unconfirmed to date.”

Those third-party reports came in late June 2024 from Michael Horka, senior lead information security engineer at Black Lotus Labs, the security research arm of Lumen Technologies, which operates one of the global Internet’s largest backbones.

In an interview with KrebsOnSecurity, Horka said Black Lotus Labs identified a web-based backdoor on Versa Director systems belonging to four U.S. victims and one non-U.S. victim in the ISP and MSP sectors, with the earliest known exploit activity occurring at a U.S. ISP on June 12, 2024.

“This makes Versa Director a lucrative target for advanced persistent threat (APT) actors who would want to view or control network infrastructure at scale, or pivot into additional (or downstream) networks of interest,” Horka wrote in a blog post published today.

Black Lotus Labs said it assessed with “medium” confidence that Volt Typhoon was responsible for the compromises, noting the intrusions bear the hallmarks of the Chinese state-sponsored espionage group — including zero-day attacks targeting IT infrastructure providers, and Java-based backdoors that run in memory only.

In May 2023, the National Security Agency (NSA), the Federal Bureau of Investigation (FBI), and the Cybersecurity Infrastructure Security Agency (CISA) issued a joint warning (PDF) about Volt Typhoon, also known as “Bronze Silhouette” and “Insidious Taurus,” which described how the group uses small office/home office (SOHO) network devices to hide their activity.

In early December 2023, Black Lotus Labs published its findings on “KV-botnet,” thousands of compromised SOHO routers that were chained together to form a covert data transfer network supporting various Chinese state-sponsored hacking groups, including Volt Typhoon.

In January 2024, the U.S. Department of Justice disclosed the FBI had executed a court-authorized takedown of the KV-botnet shortly before Black Lotus Labs released its December report.

In February 2024, CISA again joined the FBI and NSA in warning Volt Typhoon had compromised the IT environments of multiple critical infrastructure organizations — primarily in communications, energy, transportation systems, and water and wastewater sectors — in the continental and non-continental United States and its territories, including Guam.

“Volt Typhoon’s choice of targets and pattern of behavior is not consistent with traditional cyber espionage or intelligence gathering operations, and the U.S. authoring agencies assess with high confidence that Volt Typhoon actors are pre-positioning themselves on IT networks to enable lateral movement to OT [operational technology] assets to disrupt functions,” that alert warned.

In a speech at Vanderbilt University in April, FBI Director Christopher Wray said China is developing the “ability to physically wreak havoc on our critical infrastructure at a time of its choosing,” and that China’s plan is to “land blows against civilian infrastructure to try to induce panic.”

Ryan English, an information security engineer at Lumen, said it’s disappointing his employer didn’t at least garner an honorable mention in Versa’s security advisory. But he said he’s glad there are now a lot fewer Versa systems exposed to this attack.

“Lumen has for the last nine weeks been very intimate with their leadership with the goal in mind of helping them mitigate this,” English said. “We’ve given them everything we could along the way, so it kind of sucks being referenced just as a third party.”

After FBI Takedown, KV-Botnet Operators Shift Tactics in Attempt to Bounce Back

The threat actors behind the KV-botnet made "behavioral changes" to the malicious network as U.S. law enforcement began issuing commands to neutralize the activity. KV-botnet is the name given to a network of compromised small office and home office (SOHO) routers and firewall devices across the world, with one specific cluster acting as a covert data transfer system for other Chinese

AVRecon Botnet Leveraging Compromised Routers to Fuel Illegal Proxy Service

More details have emerged about a botnet called AVRecon, which has been observed making use of compromised small office/home office (SOHO) routers as part of a multi-year campaign active since at least May 2021. AVRecon was first disclosed by Lumen Black Lotus Labs earlier this month as malware capable of executing additional commands and stealing victim's bandwidth for what appears to be an

Who and What is Behind the Malware Proxy Service SocksEscort?

Researchers this month uncovered a two-year-old Linux-based remote access trojan dubbed AVrecon that enslaves Internet routers into botnet that bilks online advertisers and performs password-spraying attacks. Now new findings reveal that AVrecon is the malware engine behind a 12-year-old service called SocksEscort, which rents hacked residential and small business devices to cybercriminals looking to hide their true location online.

In a report released July 12, researchers at Lumen’s Black Lotus Labs called the AVrecon botnet “one of the largest botnets targeting small-office/home-office (SOHO) routers seen in recent history,” and a crime machine that has largely evaded public attention since first being spotted in mid-2021.

“The malware has been used to create residential proxy services to shroud malicious activity such as password spraying, web-traffic proxying and ad fraud,” the Lumen researchers wrote.

Malware-based anonymity networks are a major source of unwanted and malicious web traffic directed at online retailers, Internet service providers (ISPs), social networks, email providers and financial institutions. And a great many of these “proxy” networks are marketed primarily to cybercriminals seeking to anonymize their traffic by routing it through an infected PC, router or mobile device.

Proxy services can be used in a legitimate manner for several business purposes — such as price comparisons or sales intelligence — but they are massively abused for hiding cybercrime activity because they make it difficult to trace malicious traffic to its original source. Proxy services also let users appear to be getting online from nearly anywhere in the world, which is useful if you’re a cybercriminal who is trying to impersonate someone from a specific place.

Spur.us, a startup that tracks proxy services, told KrebsOnSecurity that the Internet addresses Lumen tagged as the AVrecon botnet’s “Command and Control” (C2) servers all tie back to a long-running proxy service called SocksEscort.

SocksEscort[.]com, is what’s known as a “SOCKS Proxy” service. The SOCKS (or SOCKS5) protocol allows Internet users to channel their Web traffic through a proxy server, which then passes the information on to the intended destination. From a website’s perspective, the traffic of the proxy network customer appears to originate from a rented/malware-infected PC tied to a residential ISP customer, not from the proxy service customer.

Spur tracks SocksEscort as a malware-based proxy offering, which means the machines doing the proxying of traffic for SocksEscort customers have been infected with malicious software that turns them into a traffic relay. Usually, these users have no idea their systems are compromised.

Spur says the SocksEscort proxy service requires customers to install a Windows based application in order to access a pool of more than 10,000 hacked devices worldwide.

“We created a fingerprint to identify the call-back infrastructure for SocksEscort proxies,” Spur co-founder Riley Kilmer said. “Looking at network telemetry, we were able to confirm that we saw victims talking back to it on various ports.”

According to Kilmer, AVrecon is the malware that gives SocksEscort its proxies.

“When Lumen released their report and IOCs [indicators of compromise], we queried our system for which proxy service call-back infrastructure overlapped with their IOCs,” Kilmer continued. “The second stage C2s they identified were the same as the IPs we labeled for SocksEscort.”

Lumen’s research team said the purpose of AVrecon appears to be stealing bandwidth – without impacting end-users – in order to create a residential proxy service to help launder malicious activity and avoid attracting the same level of attention from Tor-hidden services or commercially available VPN services.

“This class of cybercrime activity threat may evade detection because it is less likely than a crypto-miner to be noticed by the owner, and it is unlikely to warrant the volume of abuse complaints that internet-wide brute-forcing and DDoS-based botnets typically draw,” Lumen’s Black Lotus researchers wrote.

Preserving bandwidth for both customers and victims was a primary concern for SocksEscort in July 2022, when 911S5 — at the time the world’s largest known malware proxy network — got hacked and imploded just days after being exposed in a story here. Kilmer said after 911’s demise, SocksEscort closed its registration for several months to prevent an influx of new users from swamping the service.

Danny Adamitis, principal information security researcher at Lumen and co-author of the report on AVrecon, confirmed Kilmer’s findings, saying the C2 data matched up with what Spur was seeing for SocksEscort dating back to September 2022.

Adamitis said that on July 13 — the day after Lumen published research on AVrecon and started blocking any traffic to the malware’s control servers — the people responsible for maintaining the botnet reacted quickly to transition infected systems over to a new command and control infrastructure.

“They were clearly reacting and trying to maintain control over components of the botnet,” Adamitis said. “Probably, they wanted to keep that revenue stream going.”

Frustratingly, Lumen was not able to determine how the SOHO devices were being infected with AVrecon. Some possible avenues of infection include exploiting weak or default administrative credentials on routers, and outdated, insecure firmware that has known, exploitable security vulnerabilities.

WHO’S BEHIND SOCKSESCORT?

KrebsOnSecurity briefly visited SocksEscort last year and promised a follow-up on the history and possible identity of its proprietors. A review of the earliest posts about this service on Russian cybercrime forums suggests the 12-year-old malware proxy network is tied to a Moldovan company that also offers VPN software on the Apple Store and elsewhere.

SocksEscort began in 2009 as “super-socks[.]com,” a Russian-language service that sold access to thousands of compromised PCs that could be used to proxy traffic. Someone who picked the nicknames “SSC” and “super-socks” and email address “michvatt@gmail.com” registered on multiple cybercrime forums and began promoting the proxy service.

According to DomainTools.com, the apparently related email address “michdomain@gmail.com” was used to register SocksEscort[.]com, super-socks[.]com, and a few other proxy-related domains, including ip-score[.]com, segate[.]org seproxysoft[.]com, and vipssc[.]us. Cached versions of both super-socks[.]com and vipssc[.]us show these sites sold the same proxy service, and both displayed the letters “SSC” prominently at the top of their homepages.

According to cyber intelligence firm Intel 471, the very first “SSC” identity registered on the cybercrime forums happened in 2009 at the Russian language hacker community Antichat, where SSC asked fellow forum members for help in testing the security of a website they claimed was theirs: myiptest[.]com, which promised to tell visitors whether their proxy address was included on any security or anti-spam block lists.

Myiptest[.]com is no longer responding, but a cached copy of it from Archive.org shows that for about four years it included in its HTML source a Google Analytics code of US-2665744, which was also present on more than a dozen other websites.

Most of the sites that once bore that Google tracking code are no longer online, but nearly all of them centered around services that were similar to myiptest[.]com, such as abuseipdb[.]com, bestiptest[.]com, checkdnslbl[.]com, dnsbltools[.]com and dnsblmonitor[.]com.

Each of these services were designed to help visitors quickly determine whether the Internet address they were visiting the site from was listed by any security firms as spammy, malicious or phishous. In other words, these services were designed so that proxy service users could easily tell if their rented Internet address was still safe to use for online fraud.

Another domain with the Google Analytics code US-2665744 was sscompany[.]net. An archived copy of the site says SSC stands for “Server Support Company,” which advertised outsourced solutions for technical support and server administration.

Leaked copies of the hacked Antichat forum indicate the SSC identity registered on the forum using the IP address 71.229.207.214. That same IP was used to register the nickname “Deem3n®,” a prolific poster on Antichat between 2005 and 2009 who served as a moderator on the forum.

There was a Deem3n® user on the webmaster forum Searchengines.guru whose signature in their posts says they run a popular community catering to programmers in Moldova called sysadmin[.]md, and that they were a systems administrator for sscompany[.]net.

That same Google Analytics code is also now present on the homepages of wiremo[.]co and a VPN provider called HideIPVPN[.]com.

Wiremo sells software and services to help website owners better manage their customer reviews. Wiremo’s Contact Us page lists a “Server Management LLC” in Wilmington, DE as the parent company. Server Management LLC is currently listed in Apple’s App Store as the owner of a “free” VPN app called HideIPVPN.

“The best way to secure the transmissions of your mobile device is VPN,” reads HideIPVPN’s description on the Apple Store. “Now, we provide you with an even easier way to connect to our VPN servers. We will hide your IP address, encrypt all your traffic, secure all your sensitive information (passwords, mail credit card details, etc.) form [sic] hackers on public networks.”

When asked about the company’s apparent connection to SocksEscort, Wiremo responded, “We do not control this domain and no one from our team is connected to this domain.” Wiremo did not respond when presented with the findings in this report.