Cybercriminals are using fake AI-powered video generation tools to spread a newly discovered malware strain called ‘Noodlophile’, disguised as downloadable media content.

Fraudulent websites with names like "Dream Machine" are being promoted in high-visibility Facebook groups, pretending to be advanced AI tools that can generate videos from user-uploaded files. However, these platforms are actually fronts for distributing information-stealing malware.

While cybercriminals leveraging AI for malware distribution isn't new, Morphisec researchers have uncovered a fresh campaign that introduces this new infostealer. “Noodlophile” is currently being sold on dark web forums, frequently bundled with services like "Get Cookie + Pass," indicating it's part of a malware-as-a-service operation linked to Vietnamese-speaking threat actors.

Once a victim uploads their file to the fake site, they receive a ZIP archive that supposedly contains the generated video. Instead, the archive includes a misleading executable named "Video Dream MachineAI.mp4.exe" and a hidden folder housing essential files for subsequent malware stages. On systems with file extensions hidden, the file could appear to be a harmless video.

"The file Video Dream MachineAI.mp4.exe is a 32-bit C++ application signed using a certificate created via Winauth," explains Morphisec.

This executable is actually a modified version of CapCut, a legitimate video editing software (version 445.0), and the naming and certificate are used to deceive both users and antivirus software.

Once run, the file executes a sequence of commands that launch a batch script (Document.docx/install.bat). This script then uses the Windows tool 'certutil.exe' to decode and extract a base64-encoded, password-protected RAR file that mimics a PDF. It also adds a registry key to maintain persistence on the system.

The batch script then runs srchost.exe, which executes an obfuscated Python script (randomuser2025.txt) from a hardcoded remote server. This leads to the in-memory execution of the Noodlophile stealer.

If Avast antivirus is found on the system, the malware uses PE hollowing to inject its code into RegAsm.exe. If not, it resorts to shellcode injection.

"Noodlophile Stealer represents a new addition to the malware ecosystem. Previously undocumented in public malware trackers or reports, this stealer combines browser credential theft, wallet exfiltration, and optional remote access deployment," explains the Morphisec researchers.

The malware targets data like browser credentials, session cookies, tokens, and cryptocurrency wallets. Stolen information is sent through a Telegram bot, acting as a stealthy command and control (C2) channel. In some cases, Noodlophile is also packaged with XWorm, a remote access trojan (RAT), enabling more aggressive data theft.

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