Waledac Botnet Reappears as New Password Stealing Variant


The Waledac spam botnet has reawakened, and its new
password-stealing capabilities make it a much more dangerous threat than the
older one Microsoft shutdown more than a year ago, according to Palo Alto
Networks.

Computers infected with the new variant of Waledac still
sends out spam, but the malware has added capabilities to steal passwords and
authentication information from compromised systems, said Wade Williamson, a
senior security analyst at Palo Alto Networks. Palo Alto Networks first detected
the new variant
on Feb. 2 in customer networks, Williamson said. It
publicized its findings on Feb. 15.

The new Waledac malware sniffs user credentials for FTP, POP3
and SMTP accounts as well as stealing configuration files for FTP and BitCoin,
the virtual currency often used for online transactions. The core behavior,
communications methods, internal operations and delivery mechanism remain the
same, said Williamson. The source code is essentially the same, Palo Alto
Networks has determined.

Waledac is back, but the gang behind it is “being much
more quiet and trying to stay under the radar this time,” said Williamson.

Microsoft “famously” took down the Waledac botnet
by seizing the malicious domains associated with the botnet and law enforcement
authorities seized command and control servers in 2010. Since then, Waledac
“wasn’t there at all,” Williamson said.

Before its takedown, Waledac was a “decent-sized”
spam botnet that accounted for about 1 percent of the global spam volume.
Unlike its newer variant, the original Waledac was devoted to spewing out spam
as fast as it could to as many targets as possible. While it was not pleasant
for enterprises to have a spam bot operating on its networks, the impact was
generally limited to just higher bandwidth bills and network congestion, said Williamson.

The new Waledac is easily “more dangerous” because
it is capable of sifting out login credentials and sensitive information and
transmitting it to external adversaries to use in other attacks. Recent events
have shown that serious breaches and compromises could be traced back to having
the password on an email account being stolen, said Williamson.

In fact, attackers relied on login credentials stolen from
seven senior executives to break into Nortel Networks in 2000, according to a
Feb. 14 Wall Street Journal report about the decade-long security breach.

Williamson noted that even though the source code is
essentially the same, the current threat is a variant of the original botnet
and uses new domains and command and control servers. The new Waledac also uses
proxies and exhibits other dynamic behavior when looking for the CC server
to connect to, said Williamson.

Palo Alto Networks is still analyzing the variant and it was
still too soon to speculate whether the group behind the original Waledac has
resumed operations, or if a brand-new group had somehow acquired the code, said
Williamson. It is clear, however, that criminals are reusing infrastructure and
techniques that have been proven to work.

The Waledac sighting comes a few days after Kaspersky Lab researchers
discovered a new variant of Kelihos botnet. The new samples are based on
original Kelihos code, but uses different encryption keys, said Maria Garnaeva,
a Kaspersky researcher. Like its predecessor, the latest Kelihos is also
sending out large volumes of spam.

“It means that we are dealing with another
botnet,” said Alex Gostev, chief security expert of Kaspersky Lab.

Kelihos was taken offline last September after Microsoft
seized the domains used by the CC infrastructure. Microsoft was aided in
its efforts by Kaspersky Lab. As part of the takedown, Microsoft introduced a
new server into the botnet infrastructure and pushed out the IP address to all
the infected machines to connect to this server instead of other malicious
ones.

“It appears [a] new botnet infrastructure may be being
built with the new variant of Kelihos malware,” Richard Boscovich, senior
attorney in Microsoft’s digital crimes unit, wrote Feb. 3 on Microsoft’s Technet blog.

Like Waledac, Microsoft still has control over the original
Kelihos botnet. The CC servers that had controlled Kelihos is not sending
any commands to infected machines and no spam is being sent by the machines
infected with the earlier version of the malware, according to Gostev.

The timing of both botnets reappearing around the same time
is interesting, as security experts believe Waledac source code was used in
developing Kelihos.

It’s really difficult to tell at this point whether the
perpetrators are resuming operations, having learned some lessons from the
takedown, or if the code has been sold to newcomers, said Williamson.

 



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