Chinese Hackers Caught Exploiting Popular Antivirus Products to Target Telecom Sector

A Chinese-aligned cyberespionage group has been observed striking the telecommunication sector in Central Asia with versions of malware such as ShadowPad and PlugX.

Cybersecurity firm SentinelOne tied the intrusions to an actor it tracks under the name “Moshen Dragon,” with tactical overlaps between the collective and another threat group referred to as Nomad Panda (aka RedFoxtrot).

“PlugX and ShadowPad have a well-established history of use among Chinese-speaking threat actors primarily for espionage activity,” SentinelOne’s Joey Chen said. “Those tools have flexible, modular functionality and are compiled via shellcode to easily bypass traditional endpoint protection products.”

ShadowPad, labeled a “masterpiece of privately sold malware in Chinese espionage,” emerged as a successor to PlugX in 2015, even as variants of the latter have continually popped up as part of different campaigns associated with Chinese threat actors.

Although known to be deployed by the government-sponsored hacking group dubbed Bronze Atlas (aka APT41, Barium, or Winnti) since at least 2017, an ever-increasing number of other China-linked threat actors have joined the fray.

Earlier this year, Secureworks attributed distinct ShadowPad activity clusters to Chinese nation-state groups that operate in alignment with the Chinese Ministry of State Security (MSS) civilian intelligence agency and the People’s Liberation Army (PLA).

The latest findings from SentinelOne dovetails with a previous report from Trellix in late March that revealed a RedFoxtrot attack campaign targeting telecom and defense sectors in South Asia with a new variant of PlugX malware named Talisman.

Moshen Dragon’s TTPs involve the abuse of legitimate antivirus software belonging to BitDefender, Kaspersky, McAfee, Symantec, and Trend Micro to sideload ShadowPad and Talisman on compromised systems by means of a technique called DLL search order hijacking.

In the subsequent step, the hijacked DLL is used to decrypt and load the final ShadowPad or PlugX payload that resides in the same folder as that of the antivirus executable. Persistence is achieved by either creating a scheduled task or a service.

The hijacking of security products notwithstanding, other tactics adopted by the group include the use of known hacking tools and red team scripts to facilitate credential theft, lateral movement and data exfiltration. The initial access vector remains unclear as yet.

“Once the attackers have established a foothold in an organization, they proceed with lateral movement by leveraging Impacket within the network, placing a passive backdoor into the victim environment, harvesting as many credentials as possible to insure unlimited access, and focusing on data exfiltration,” Chen said.

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