Cybercriminals Developing BugDrop Malware to Bypass Android Security Features

In a sign that malicious actors continue to find ways to work around Google Play Store security protections, researchers have spotted a previously undocumented Android dropper trojan that’s currently in development.

“This new malware tries to abuse devices using a novel technique, not seen before in Android malware, to spread the extremely dangerous Xenomorph banking trojan, allowing criminals to perform On-Device Fraud on victim’s devices,” ThreatFabric’s Han Sahin said in a statement shared with The Hacker News.

Dubbed BugDrop by the Dutch security firm, the dropper app is explicitly designed to defeat new features introduced in the upcoming version of Android that aim to make it difficult for malware to request Accessibility Services privileges from victims.

ThreatFabric attributed the dropper to a cybercriminal group known as “Hadoken Security,” which is also behind the creation and distribution of the Xenomorph and Gymdrop Android malware families.

Banking trojans are typically deployed on Android devices through innocuous dropper apps that pose as productivity and utility apps, which, once installed, trick users into granting invasive permissions.

Notably, the Accessibility API, which lets apps read the contents of the screen and perform actions on behalf of the user, has come under heavy abuse, enabling malware operators to capture sensitive data such as credentials and financial information.

This is achieved by means of what’s called overlay attacks wherein the trojan injects a fake lookalike login form retrieved from a remote server when a desired app such as a cryptocurrency wallet is opened by the victim.

Given that most of these malicious apps are sideloaded – something that’s only possible if the user has allowed installation from unknown sources – Google, with Android 13, has taken the step of blocking accessibility API access to apps installed from outside of an app store.

But that hasn’t stopped adversaries from attempting to circumvent this restricted security setting. Enter BugDrop, which masquerades as a QR code reader app and is being tested by its authors to deploy malicious payloads via a session-based installation process.

“What is likely happening is that actors are using an already built malware, capable of installing new APKs on an infected device, to test a session-based installation method, which would then later be incorporated in a more elaborate and refined dropper,” the researchers said.

The changes, should it become a reality, could make the banking trojans a more dangerous threat capable of bypassing security defenses even before they are in place.

“With the completion and resolution of all the issues currently present in BugDrop, criminals will have another efficient weapon in the war against security teams and banking institutions, defeating solutions that are currently being adopted by Google, which are clearly not sufficient to deter criminals,” the company noted.

Users are advised to avoid falling victim to malware hidden in official app stores by only downloading applications from known developers and publishers, scrutinizing app reviews, and checking their privacy policies.

Found this article interesting? Follow THN on Facebook, Twitter  and LinkedIn to read more exclusive content we post.