Researchers Uncover Lazarus Group Admin Layer for C2 Servers

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An ongoing investigation into recent attacks by North Korea’s Lazarus group on cryptocurrency entities and software developers worldwide has uncovered a hidden administrative layer that the threat actor has been using to centrally manage the campaign’s command-and-control (C2) infrastructure.

The investigation by researchers at SecurityScorecard showed Lazarus using the newly discovered infrastructure to maintain direct oversight over compromised systems, control payload delivery on them, and efficiently manage exfiltrated data. Significantly, the threat actor is using the same Web-based admin platform in other campaigns, including one involving the impersonation of IT workers, the security vendor found.

Elaborate Operational Security

Though the threat actor has implemented elaborate operational security measures to try and evade attribution, SecurityScorecard said it was able to tie the campaign and infrastructure to North Korea with a high degree of confidence.

"[The] analysis makes it evident that Lazarus was orchestrating a global operation targeting the cryptocurrency industry and developers worldwide," SecurityScorecard said in a report this week. “The campaigns resulted in hundreds of victims downloading and executing the payloads, while, in the background, the exfiltrated data was being siphoned back to Pyongyang.”

SecurityScorecard discovered “Phantom Circuit,” the name by which it is tracking Lazarus group’s newly discovered admin layer, while conducting followup investigations involving “Operation 99,” a malicious campaign that it recently uncovered targeting the cryptocurrency industry and developers globally. In the campaign, members of the threat group have been posing as recruiters on LinkedIn and other online job forums to get software developers to engage in spurious project tests and code reviews.

Victims who fall for the scam are directed to clone a seemingly benign but harmful open source GitHub repository. The cloned repository connects to Lazarus group’s C2 infrastructure, which the threat actor has then been using to sneak data-stealing malware into the victim’s environment. As part of the campaign, Lazarus group actors have been inserting obfuscated backdoors into legitimate software products — including authentication apps and cryptocurrency software — and trying to trick developers into running them in their environments. SecurityScorecard estimates that more than 230 victims have downloaded the malicious payloads in the North Korean threat actor’s latest campaign.

Dual Motivations

“The motivation is twofold: cryptocurrency theft and infiltration of corporate networks,” Ryan Sherstobitoff, senior vice president of threat intelligence at SecurityScorecard says. More often than not, developers who fall victim to Lazarus group lures end up executing the cloned code on their corporate devices and in their work environments. “The payloads are designed to exfiltrate development secrets,” he says.

SecurityScorecard uncovered the Phantom Circuit admin layer when trying to understand how Lazarus actors were managing the information they stole via Operation 99. What the company discovered was Lazarus members using what it described as a sophisticated network of Astrill VPNs and proxies to access Operation 99’s C2 infrastructure in a highly concealed manner. Astrill, which has VPN servers in 142 cities and 56 countries, has a reputation for allowing users to browse the Web anonymously and bypass Internet restrictions in countries with heavy censorship.

SecurityScorecard researchers found Lazarus members using Astrill VPNs to connect to an intermediate proxy network registered with a freight company in Hasan, Russia. They then used the proxy network to connect to Operation 99’s C2 infrastructure in an elaborate attempt to try and hide their tracks. The C2 servers themselves were hosted on infrastructure registered with a most likely fictional “Stark Industries, LLC.”

"[SecurityScorecard] assesses with high confidence that the IPs used to connect to the C2s were merely a relay/proxy and used to obfuscate the true origin," the company wrote in its report this week. “The adversary was establishing a secondary session after connecting to the VPN with the proxy, thus obscuring the true origin of where they actually connected from.” SecureScorecard said it was able to identify a total of six distinct IP addresses in Pyongyang that the threat actor used to initiate the Astrill VPN connections to Operation 99’s C2 network.

“Phantom Circuit [is the] operational network behind the scenes that leads directly back to Pyongyang,” Sherstobitoff says. It is also the same proxy network, he adds, that Lazarus used in another campaign where members used stolen identities to impersonate IT workers to try and secure jobs at organizations they wanted to infiltrate.

About the Author

Jai Vijayan is a seasoned technology reporter with over 20 years of experience in IT trade journalism. He was most recently a Senior Editor at Computerworld, where he covered information security and data privacy issues for the publication. Over the course of his 20-year career at Computerworld, Jai also covered a variety of other technology topics, including big data, Hadoop, Internet of Things, e-voting, and data analytics. Prior to Computerworld, Jai covered technology issues for The Economic Times in Bangalore, India. Jai has a Master’s degree in Statistics and lives in Naperville, Ill.