The state of email security and phishing attacks

Employees send and receive hundreds of emails a day to keep businesses moving. Unfortunately, it just takes one employee to interact with an undetected phishing email to potentially put an entire organization at risk from cyber disruption. Attackers know this, which is why they continue to develop and improve email phishing attacks.  

Increased attack sophistication makes it harder than ever for traditional cyber security solutions like SEGs, firewalls, and spam filters to detect and mitigate increasingly novel and sophisticated email threats.

When there are tell-tale signs of a threat, these solutions can  identify an incoming message as suspicious. Pointers such as emails from unknown senders, messages which contain an unusual amount of poor spelling and grammar or encourage the receiver to respond to an unexpected but supposedly urgent request.

That is, if the phishing attacks weren’t blocked by security measures before reaching the victim’s inbox. But, this is happening more and more often as phishing campaigns are becoming more advanced. Attackers are showing signs of consistently bypassing traditional protections and getting through to exploit victims.  

Darktrace email threat reporting

In its End of Year Threat Report, Darktrace analyzed over 10 million phishing emails targeting customer environments between September 1 and December 31, 2023.  Our findings signal that attackers are starting to take advantage of advancements in artificial intelligence (AI), including using Generative AI tools such as Large Language Models (LLMs) to create more convincing and sophisticated phishing messages – and at scale.

LLMs and Phishing

With the right AI prompts, attackers can use these LLMs to help write convincing email messages designed to target specific countries, companies or even individuals – all without the suspicious hallmarks which are traditionally associated with standard phishing attacks. The attackers don’t even need to speak the language of the individuals or groups they’re targeting.  LLMs lower language barriers for attackers; using their native tongue, they can simply ask the Generative AI to write a message in the language of their choosing.  

These techniques are designed to build trust and manipulate recipients into giving up sensitive information like user credentials, intellectual property or bank information or coerce them into downloading malicious payloads which can be used to launch further attacks on business infrastructure.  With the appropriate research, attackers can tailor the messages to increase the chances of being successful, like making them look like a legitimate company email or request.

Social engineering phishing attacks

A year ago. Darktrace shared research which found a 135% increase in ‘novel social engineering attacks’ in the first two months of 2023, corresponding with the widespread adoption of ChatGPT. These novel phishing attacks showed a strong linguistic deviation compared to other phishing emails, which suggested to us that Generative AI was already providing an avenue for threat actors to craft sophisticated and targeted attacks at speed and scale

We’ve seen this trend continue. Our End of Year Threat Report found 38% of these emails were identified as utilizing novel social engineering techniques.

Attackers are also deploying another technique to make phishing emails look more convincing – they’re making the emails themselves longer and more sophisticated.  

A potential victim might be suspicious of an ‘urgent’ email which prompts them to take action without an explanation - but if there’s additional context in the text, it adds an aura of legitimacy which is difficult to act against.

And threat actors know this; 28% of phishing emails analyzed by Darktrace over the period were identified as having “significant” amount of text – containing over 1,000 characters, which equates to over 200 words.  

It’s a sign that attackers are innovating and bolstering their efforts to craft sophisticated phishing campaigns, potentially leveraging Generative AI tools to automate social engineering activity by creating longer, more convincing phishing emails.  

QR code phishing

But this is far from the only innovative method which attackers are using to bypass traditional security defences. Among the 10 million plus emails analyzed during the reporting period, Darktrace/Email detected over 639,000 malicious QR codes within the messages.

Malicious QR codes placed within emails have become an increasingly common form of phishing attack, especially as QR codes have become a more common method for sharing links to information or buying links for products in recent years.

Attackers are deploying QR codes because they provide a way of directing unsuspecting victims to malicious websites or download links without needing to use a traditional phishing URL.  

The advantage of implanting QR codes for attackers is that while phishing URLs are something which traditional security solutions are actively looking to identify and mitigate, malicious QR codes are more difficult for them to detect.

Applying AI to email security

Traditional security solutions which rely heavily on previously identified malicious emails and known bad senders are struggling to identify and defend against these novel and increasingly sophisticated email threats.

But by using AI that learns the unique digital environment and patterns of each business, Darktrace/Email can recognize the subtle deviations in expected email activity to determine whether any given email could represent a threat to the business. It is then able to make highly accurate decisions to mitigate and neutralize any email attack it faces helping to keep your organization safe from cyber disruption.

It’s therefore imperative that in the battle against ever-evolving, ever more sophisticated cyber threats, defenders are also embracing AI to keep businesses safe. By effectively applying AI to cyber security challenges, defenders can take a proactive approach to cyber security, staying one step ahead of malicious attackers, with real-time detection and automated response to known and unknown threats looking to disrupt the business via the inbox.  

Darktrace/Email was recently awarded a 2024 AI Excellence Award for Machine Learning by Business Intelligence Group.

Join Darktrace on 9 April for a virtual event to explore the latest innovations needed to get ahead of the rapidly evolving threat landscape. Register today to hear more about our latest innovations coming to Darktrace’s offerings.

How does Loader Malware work?

Throughout 2023, the Darktrace Threat Research team identified and investigated multiple strains of loader malware affecting customers across its fleet. These malicious programs typically serve as a gateway for threat actors to gain initial access to an organization’s network, paving the way for subsequent attacks, including additional malware infections or disruptive ransomware attacks.

How to defend against loader malware

The prevalence of such initial access threats highlights the need for organizations to defend against multi-phase compromises, where modular malware swiftly progresses from one stage of an attack to the next. One notable example observed in 2023 was Pikabot, a versatile loader malware used for initial access and often accompanied by secondary compromises like Cobalt Strike and Black Basta ransomware.

While Darktrace initially investigated multiple instances of campaign-like activity associated with Pikabot during the summer of 2023, a new campaign emerged in October which was observed targeting a Darktrace customer in Europe. Thanks to the timely detection by Darktrace DETECT™ and the support of Darktrace’s Security Operations Center (SOC), the Pikabot compromise was quickly shut down before it could escalate into a more disruptive attack.

What is Pikabot?

Pikabot is one of the latest modular loader malware strains that has been active since the first half of 2023, with several evolutions in its methodology observed in the months since. Initial researchers noted similarities to the Qakbot aka Qbot or Pinkslipbot and Mantanbuchus malware families, and while Pikabot appears to be a new malware in early development, it shares multiple commonalities with Qakbot [1].

First, both Pikabot and Qakbot have similar distribution methods, can be used for multi-stage attacks, and are often accompanied by downloads of Cobalt Strike and other malware strains. The threat actor known as TA577, which has also been referred to as Water Curupira, has been seen to use both types of malware in spam campaigns which can lead to Black Basta ransomware attacks [2] [3].Notably, a rise in Pikabot campaigns were observed in September and October 2023, shortly after the takedown of Qakbot in Operation Duck Hunt, suggesting that Pikabot may be serving as a replacement for initial access to target network [4].

How does Pikabot malware work?

Many Pikabot infections start with a malicious email, particularly using email thread hijacking; however, other cases have been distributed via malspam and malvertising [5]. Once downloaded, Pikabot runs anti-analysis techniques and checks the system’s language, self-terminating if the language matches that of a Commonwealth of Independent States (CIS) country, such as Russian or Ukrainian. It will then gather key information to send to a command-and-control (C2) server, at which point additional payload downloads may be observed [2]. Early response to a Pikabot infection is important for organizations to prevent escalation to a significant compromise such as ransomware.

Darktrace’s Coverage of Pikabot malware

Between April and July 2023, the Darktrace Threat Research team investigated Pikabot infections affected more than 15 customer environments; these attacks primarily targeted US and European organizations spanning multiple industries, and most followed the below lifecycle:

1. Initial access via malspam or email, often outside of Darktrace’s scope
2. Suspicious executable download from a URI in the format /\/[a-z0-9A-Z]{3,}\/[a-z0-9A-Z]{5,}/ and using a Windows PowerShell user agent
3. C2 connections to IP addresses on uncommon ports including 1194 and 2078
4. Some cases involved further C2 activity to Cobalt Strike endpoints

In October 2023, a second campaign emerged that largely followed the same attack pattern, with a notable difference that cURL was used for the initial payload download as opposed to PowerShell. All the Pikabot cases that Darktrace has observed since October 2023 have used cURL, which could indicate a shift in approach from targeting Windows devices to multi-operating system environments.

On October 17, 2023, Darktrace observed a Pikabot infection on the network of a European customer after an internal user seemingly clicked a malicious link in a phishing email, thereby compromising their device. As the customer did not have Darktrace/Email™ deployed on their network, Darktrace did not have visibility over the email. Despite this, DETECT was still able to provide full visibility over the network-based activity that ensued.

Darktrace observed the device using a cURL user agent when initiating the download of an unusual executable (.exe) file from an IP address that had never previously been observed on the network. Darktrace further recognized that the executable file was attempting to masquerade as a different file type, likely to evade the detection of security teams and their security tools. Within one minute, the device began to communicate with additional unusual IP addresses on uncommon ports (185.106.94[.]174:5000 and 80.85.140[.]152:5938), both of which have been noted by open-source intelligence (OSINT) vendors as Pikabot C2 servers [6] [7].

Around 40 minutes after the initial download, Darktrace detected the device performing suspicious DNS tunneling using a pattern that resembled the Cobalt Strike Beacon. This was accompanied by beaconing activity to a rare domain, ‘wordstt182[.]com’, which was registered only 4 days prior to this activity [8]. Darktrace observed additional DNS connections to the endpoint, ‘building4business[.]net’, which had been linked to Black Basta ransomware [2].

As this customer had integrated Darktrace with the Microsoft Defender, Defender was able to contextualize the DETECT model breaches with endpoint insights, such as known threats and malware, providing customers with unparalleled visibility of the host-level detections surrounding network-level anomalies.

In this case, the behavior of the affected device triggered multiple Microsoft Defender alerts, including one alert which linked the activity to the threat actor Storm-0464, another name for TA577 and Water Curupira. These insights were presented to the customer in the form of a Security Integration alert, allowing them to build a full picture of the ongoing incident.

As the customer had subscribed to Darktrace’s Proactive Threat Notification (PTN) service, the customer received timely alerts from Darktrace’s SOC notifying them of the suspicious activity associated with Pikabot. This allowed the customer’s security team to quickly identify the affected device and remove it from their environment for remediation.

Although the customer did have Darktrace RESPOND™ enabled on their network, it was configured in human confirmation mode, requiring manual application for any RESPOND actions. RESPOND had suggested numerous actions to interrupt and contain the attack, including blocking connections to the observed Pikabot C2 addresses, which were manually actioned by the customer’s security team after the fact. Had RESPOND been enabled in autonomous response mode during the attack, it would have autonomously blocked these C2 connections and prevented the download of any suspicious files, effectively halting the escalation of the attack.

Nonetheless, Darktrace DETECT’s prompt identification and alerting of this incident played a crucial role in enabling the customer to mitigate the threat of Pikabot, preventing it from progressing into a disruptive ransomware attack.

Conclusion

Pikabot is just one recent example of a modular strain of loader known for its adaptability and speed, seamlessly changing tactics from one campaign to the next and utilizing new infrastructure to initiate multi-stage attacks. Leveraging commonly used tools and services like Windows PowerShell and cURL, alongside anti-analysis techniques, this malware can evade the detection and often bypass traditional security tools.

In this incident, Darktrace detected a Pikabot infection in its early stages, identifying an anomalous file download using a cURL user agent, a new tactic for this particular strain of malware. This timely detection, coupled with the support of Darktrace’s SOC, empowered the customer to quickly identify the compromised device and act against it, thwarting threat actors attempting to connect to malicious Cobalt Strike and Black Basta servers. By preventing the escalation of the attack, including potential ransomware deployment, the customer’s environment remained safeguarded.

Had Darktrace RESPOND been enabled in autonomous response mode at the time of this attack, it would have been able to further support the customer by applying targeted mitigative actions to contain the threat of Pikabot at its onset, bolstering their defenses even more effectively.

Credit to Brianna Leddy, Director of Analysis, Signe Zaharka, Senior Cyber Security Analyst

Appendix

Darktrace DETECT Models

Anomalous Connection / Anomalous SSL without SNI to New External

Anomalous Connection / Application Protocol on Uncommon Port

Anomalous Connection / Multiple Connections to New External TCP Port

Anomalous Connection / New User Agent to IP Without Hostname

Anomalous Connection / Powershell to Rare External

Anomalous Connection / Rare External SSL Self-Signed

Anomalous Connection / Repeated Rare External SSL Self-Signed

Anomalous File / EXE from Rare External Location

Anomalous File / Masqueraded File Transfer

Anomalous File / Multiple EXE from Rare External Locations

Compromise / Agent Beacon to New Endpoint

Compromise / Beacon to Young Endpoint

Compromise / Beaconing Activity To External Rare

Compromise / DNS / DNS Tunnel with TXT Records

Compromise / New or Repeated to Unusual SSL Port

Compromise / SSL Beaconing to Rare Destination

Compromise / Suspicious Beaconing Behaviour

Compromise / Suspicious File and C2

Device / Initial Breach Chain Compromise

Device / Large Number of Model Breaches

Device / New PowerShell User Agent

Device / New User Agent

Device / New User Agent and New IP

Device / Suspicious Domain

Security Integration / C2 Activity and Integration Detection

Security Integration / Egress and Integration Detection

Security Integration / High Severity Integration Detection

Security Integration / High Severity Integration Incident

Security Integration / Low Severity Integration Detection

Security Integration / Low Severity Integration Incident

Antigena / Network / External Threat / Antigena File then New Outbound Block

Antigena / Network / External Threat / Antigena Suspicious Activity Block

Antigena / Network / External Threat / Antigena Suspicious File Block

Antigena / Network / Significant Anomaly / Antigena Breaches Over Time Block

Antigena / Network / Significant Anomaly / Antigena Controlled and Model Breach

Antigena / Network / Significant Anomaly / Antigena Enhanced Monitoring from Client Block

Antigena / Network / Significant Anomaly / Antigena Significant Anomaly from Client Block

Antigena / Network / Significant Anomaly / Antigena Significant Security Integration and Network Activity Block

List of Indicators of Compromise (IoC)

IOC - TYPE - DESCRIPTION + CONFIDENCE

128.140.102[.]132 - IP Address - Pikabot Download

185.106.94[.]174:5000 - IP Address: Port - Pikabot C2 Endpoint

80.85.140[.]152:5938 - IP Address: Port - Pikabot C2 Endpoint

building4business[.]net - Hostname - Cobalt Strike DNS Beacon

wordstt182[.]com - Hostname - Cobalt Strike Server

167.88.166[.]109 - IP Address - Cobalt Strike Server

192.9.135[.]73 - IP - Pikabot C2 Endpoint

192.121.17[.]68 - IP - Pikabot C2 Endpoint

185.87.148[.]132 - IP - Pikabot C2 Endpoint

129.153.22[.]231 - IP - Pikabot C2 Endpoint

129.153.135[.]83 - IP - Pikabot C2 Endpoint

154.80.229[.]76 - IP - Pikabot C2 Endpoint

192.121.17[.]14 - IP - Pikabot C2 Endpoint

162.252.172[.]253 - IP - Pikabot C2 Endpoint

103.124.105[.]147 - IP - Likely Pikabot Download

178.18.246[.]136 - IP - Pikabot C2 Endpoint

86.38.225[.]106 - IP - Pikabot C2 Endpoint

198.44.187[.]12 - IP - Pikabot C2 Endpoint

154.12.233[.]66 - IP - Pikabot C2 Endpoint

MITRE ATT&CK Mapping

TACTIC - TECHNIQUE

Defense Evasion - Masquerading: Masquerade File Type (T1036.008)

Command and Control - Application Layer Protocol: Web Protocols (T1071.001)

Command and Control - Non-Standard Port (T1571)

Command and Control - Application Layer Protocol: DNS (T1071.004)

Command and Control - Protocol Tunneling (T1572)

References

[1] https://news.sophos.com/en-us/2023/06/12/deep-dive-into-the-pikabot-cyber-threat/?&web_view=true  

[2] https://www.trendmicro.com/en_be/research/24/a/a-look-into-pikabot-spam-wave-campaign.html

[3] https://thehackernews.com/2024/01/alert-water-curupira-hackers-actively.html

[4] https://www.darkreading.com/cyberattacks-data-breaches/pikabot-malware-qakbot-replacement-black-basta-attacks

[5] https://www.redpacketsecurity.com/pikabot-distributed-via-malicious-ads-6/

[6] https://www.virustotal.com/gui/ip-address/185.106.94.174/detection

[7] https://www.virustotal.com/gui/ip-address/80.85.140.152/detection

[8] https://www.domainiq.com/domain?wordstt182.com