The threat actor "ToddyCat," a Chinese-linked threat actor, is being observed exploiting a vulnerability in ESET security software to spread a newly discovered malware strain known as TCESB, a new strain that has recently been discovered.
In a recent study by cybersecurity company Kaspersky, the group's evolving tactics and expanding arsenal were highlighted in an analysis released by the company. The TCESB software, which consists of a novel addition to ToddyCat's toolkit, has been designed specifically to be able to stealthily execute malicious payloads without being detected by existing monitoring and protection software installed on compromised computers, according to Kaspersky.
The malware's ability to bypass security measures illustrates its sophistication and the calculated approach adopted by its operators. In recent years, TeddyCat has actively participated in several cyber-espionage campaigns primarily targeting Asian organizations, primarily targeting organisations. In at least December 2020, the group began to conduct attacks against high-value entities in the region, and it has gained notoriety for a number of these attacks, including sustained attacks on high-value entities throughout the region.
The intrusions are believed to be intended to gather intelligence, often by compromising targeted environments for a long time. In a comprehensive report released last year, Kaspersky detailed ToddyCat's extensive use of custom and off-the-shelf tools to establish persistent access within victim networks. As part of the report, the group is also described as exfiltrating large volumes of sensitive information on an industrial scale, from a wide variety of organisations in Asia-Pacific. As part of its operations, the group is also able to exfiltrate large amounts of sensitive information.
It was ToddyCat's tactic, technique, and procedure (TTPS) that was significantly evolved by exploitation of a security flaw in ESET software to deliver TCESB. There is an increasing trend among advanced persistent threat (APT) actors to exploit software supply chain vulnerabilities and trusted security tools as a way of infiltration by utilising these vectors. It has recently been reported by cybersecurity researchers that a group of advanced persistent threats (APT) known as ToddyCat, which has been attributed to cyber-espionage operations originating in China, has been involved in a disturbing development.
According to an analysis published by Kaspersky, the threat actor has been exploiting a vulnerability in ESET security software to distribute a newly discovered and previously unknown malware strain dubbed TCESB by exploiting a vulnerability in ESET security software. During this malware, the group has demonstrated significant advances in their offensive capability, and the evolution of its offensive toolkit has been continuous.
The TCESB malware is notable for its stealthy design, allowing it to execute malicious payloads without being detected by endpoint protection or monitoring software, thus demonstrating how it can accomplish its goals. By deploying it through a legitimate security solution, such as ESET, it underscores how sophisticated and strategically planned its actors are. As well as facilitating deeper penetration into targeted systems, the technique also complicates detection and response efforts by blending malicious activity with otherwise trusted processes, which is one of the most important advantages of this technique.
ToddyCat has been active since December 2020 and has conducted a variety of targeted intrusions across a wide range of sectors within Asia. According to Kaspersky, the organisation's operations are mostly intelligence-driven, with a particular focus on maintaining access to high-value targets for data exfiltration. Previous reports have demonstrated that the group maintains persistence within compromised environments by using both custom-built and widely available tools. It is important to note that, during their campaigns, they have been perpetrating large-scale data theft, which has been described by researchers as industrial-scale harvesting, primarily from Asian entities.
As ToddyCat's operations have recently changed, it illustrates the broader trend among nation-state threat actors to weaponise trusted software platforms as a method of delivering TCESB, and marks a tactical shift in ToddyCat's operations. As a result of this incident, concerns have been raised regarding vulnerabilities in the software supply chain, as well as the increasingly sophisticated evasion techniques employed by APT actors to maintain access and achieve long-term strategic goals. Following a responsible disclosure procedure, ESET corrected the identified security vulnerability in January 2025. To mitigate the vulnerability that was exploited by ToddyCat to deploy the TCESB malware, the company released a patch to mitigate it.
The latest security updates for ESET's widely used endpoint protection software are highly recommended for organisations using the system, as they strongly recommend implementing these updates as soon as possible. It remains critical to maintain an effective patch management process to avoid exposure to emerging threats and reduce the risk of compromise by addressing known vulnerabilities. In addition to updating their systems, organisations are advised to implement enhanced monitoring procedures to detect suspicious activity linked to the use of similar tools to detect suspicious activity.
It is Kaspersky's belief that effective detection depends upon monitoring the events that are associated with the installation of drivers that are known to contain vulnerabilities. Furthermore, organizations should be cautious for instances involving Windows kernel debug symbols being loaded onto endpoints, particularly on endpoints where kernel debugging is not a routine or expected process. An anomaly of this kind could be indicative of a compromise and, therefore, requires immediate investigation to prevent further intrusions or data exfiltration.
It has been determined that the TCESB malware is based on an open-source tool called EDRSandBlast, a modified variant of the malware. This adaptation incorporates advanced functionalities that are specifically intended to manipulate kernel structures, which are an integral part of the Windows operating system. It is capable of deactivating notification routines, also called callbacks, as part of its primary capabilities.
It is crucial for security and monitoring tools to work properly that these routines allow drivers to be alerted about specific system events, such as the creation of new processes or the modification of registry keys, to the extent that they will be able to be notified about these events. By enabling these callbacks, TCESB effectively makes security solutions unaware of the presence and activity of the compromised system by disabling them. Using the Bring Your Vulnerable Driver (BYOVD) technique, TCESB can achieve this degree of control.
In this particular instance, the malware can install a legitimate but vulnerable Dell driver by using the Windows Device Manager interface – DBUtilDrv2.sys. There is a security vulnerability affecting the driver known as CVE-2021-36276 that could allow attackers to execute code with elevated privileges by granting access to the driver. There has been a precedent of Dell drivers being exploited for malicious purposes for years.
For example, in 2022, a group of North Korean advanced persistent threat actors, known as the Lazarus Group, exploited another Dell driver vulnerability (CVE-2021-21551 in dbutil_2_3.sys) in a similar BYOVD attack to disable security defences and maintain persistence against malware. When the susceptible driver has been successfully deployed to the operating system, TCESB initiates a continuous monitoring loop in which two-second intervals are checked to see if a payload file with a specific name is present in the current working directory.
Andrey Gunkin, a researcher at Kaspersky, has pointed out that the malware is designed to operate when there is no payload at launch, and that when the malware detects the payload, it deploys an algorithm to decrypt and execute it. While the payload samples themselves were not available during the analysis period, forensic investigation revealed that the payload samples are encrypted with AES-128 and are immediately decoded and executed as soon as they are identified in the specified location, once the AES-128 algorithm has been used.
Cybersecurity experts recommend vigilant system monitoring practices because the TCESB is so stealthy and technically sophisticated. Organizations need to monitor events related to the installation of drivers that may contain security flaws, as well as the loading of kernel debug symbols by Windows in environments where kernel-level debugging is not commonly used. It is important to investigate and investigate these behaviors immediately as they may indicate that advanced threats are trying to undermine the integrity of the system.
A recent analysis from threat intelligence analysts ESET claims that threat actors are increasing their attacks worldwide, with geographic events determining which locations are most heavily targeted. The principal author of the research recommends that CISOs to intensify their protection plans in light of the activity, even if he claims that no new attack techniques have been discovered.
The director of threat research at ESET, Jean-Ian Boutin said that current attack methods "still work well." Thus, attackers don't always need to use innovative vectors. According to Boutin, CISOs are defending against these attacks properly; they only need to fortify themselves even more.
The researchers claim that because the primary worldwide assault trends that ESET has identified have been directly impacted by regional stability difficulties, these challenges are also affecting the cyber sphere. The report focuses on activities of specific advanced persistent threat (APT) groups from October 2023 to March 2024, the experts said in the report.
Researchers from ESET also observed that organizations connected with Russia were concentrating on espionage activities throughout the European Union in addition to assaults against Ukraine.
Along with operations against Ukraine, ESET researchers also saw that entities connected with Russia were concentrating on espionage across the European Union. However, the researchers noted that several threat actors with ties to China took use of flaws in software and public-facing hardware, including firewalls and VPNs, as well as Confluence and Microsoft Exchange Server, to gain first access to targets across a variety of sectors.
Using emotions to keep the assault from being disclosed is one of the more recent strategies ESET is witnessing in North Korea; this will probably increase the tactic's usefulness and duration. According to Boutin, the method has been used for years, but North Korean APT organizations are making a small adjustment.
Under the guise of a job application, the hack targets programmers and other technical talent at numerous significant US corporations. The victim is exposed to the malware and the trap is set when the attacker poses as a recruiter for such companies and requests that the victims complete an online test to demonstrate their technical proficiency.
A cyberespionage group called XDSpy has recently attacked Russian military-industrial enterprises, as per new research.
XDSpy is said to be a state-controlled hacker, in the game since 2011, that mainly targets counties across Eastern Europe and the Balkans. In its recent November campaign, attackers tried to get entry into the Russian metallurgical enterprise systems and a research organization involved in the production and development of guided missile weapons, as per Russian cybersecurity form F.A.C.C.T.
F.A.C.C.T. — an offshoot of Singapore-based cybersecurity firm Group IB — reported earlier this week that hackers sent phishing emails to their victims, posing as a research organization dealing in nuclear weapon design.
The group's tactics were similar to those used in their earlier attack on Russian companies, which included a well-known scientific facility in July. During that event, the hackers pretended to be Russia's Ministry of Emergency Situations and sent phishing emails with malicious PDF files. Researchers did not say whether attackers could break into the victims' systems and steal data.
According to F.A.C.C.T., Russia is the major target of XDSpy hackers. According to analysts, the gang used to target the country's government, military, financial institutions, and energy, research, and mining firms.
Even though the group has been active for years, there is no proof of its strikes on Russia, particularly since many foreign cybersecurity companies fled the country following the Russian takeover of Ukraine.
ESET, a cybersecurity firm based in Slovakia, has been monitoring XDSpy's behavior since 2020, and researcher Matthieu Faou said that the group has constantly undertaken spearphishing efforts aimed mostly at important companies in Eastern Europe.
ESET lost first-hand visibility of cyberattacks occurring in Russia and Belarus after leaving these countries, both targets of XDSpy. However, the business announced last week that it had spotted the group's attack on a Ukrainian aerospace company.
Hackers utilized a breach chain nearly identical to the one described by F.A.C.C.T. in this attempt, which was not officially reported by Ukrainian security services and was likely unsuccessful. "We do agree with their analysis and also attribute this to XDSpy," stated Faou.
Despite the group's extensive history, analysts have not been able to pinpoint the country that is funding it. XDSpy may not have an exceptionally sophisticated toolbox, but "they have very good operative defense," according to Faou. "So far, we haven't found any errors that could point toward a specific country."
Because many Western corporations have little access to computer systems in the region, reports about cyberattacks against Russia are rare.
This week, on the other hand, has been jam-packed with reports from Russian cybersecurity organizations. In addition to the XDSpy attack, F.A.C.C.T. recorded a DarkWatchman malware-based strike on Russian banks, telecom providers, logistics organizations, and IT firms. A phishing email was disguised as a newsletter from a Russian courier delivery firm by the hackers. The outcome of these strikes is uncertain.
According to the Russian cybersecurity firm Positive Technologies, which has been sanctioned by the US, another cyberattack was carried out by a new hacker gang called Hellhounds. Hellhounds has already infiltrated at least 20 Russian businesses, including government institutions, technology firms, and space and energy industries.
Rare Wolf hackers were also recorded by the cybersecurity firm BI.ZONE. According to researchers, the gang has targeted approximately 400 Russian companies since 2019.
These assessments do not reveal which countries are responsible for the attacks against Russia. However, analysts at the cybersecurity firm Solar stated in a November report that the majority of state-sponsored attacks against Russia come from North Korea and China, with a primary focus on data theft.
According to ESET researcher Lukas Stenfanko who examined a sample after getting a tip from MalwareHunterTeam, it was found that one of the noteworthy new features seen in the most recent GravityRAT version is the ability to collect WhatsApp backup files.
A remote access tool called GravityRAT has been used in targeted cyberattacks on India since at least 2015 and is known to be in use. There are versions for Windows, Android, and macOS, as previously reported by Cisco Talos, Kaspersky, and Cyble. However it is still unknown who is the actor behind GravityRAT, the group has been internally defined as SpaceCobra.
Although GravityRAT has been active since at least 2015, it only began specifically focusing on Android in 2020. Its operators, 'SpaceCobra,' only employ the malware in specific targeting tasks.
According to ESET, the app is delivered via “bingechat[.]net” and other domains or distribution channels, however, the downloads require invites, entering valid login information, or creating a new account.
While registrations are currently closed, this method only enables the threat actors to distribute the malware to targeted users. Additionally, accessing a copy for analysis becomes more difficult for researchers.
Upon installation on the target's smartphone, the BingeChat app makes dangerous requests for access to contacts, location, phone, SMS, storage, call records, camera, and microphone.
Since these are some typical permissions asked of the users for any instant messaging apps, the malicious app goes unsuspected.
The program provides call records, contact lists, SMS messages, device location, and basic device information to the threat actor's command and control (C2) server before the user registers on BingeChat.
Along with the aforementioned records, files, and document files of jpg, jpeg, log, png, PNG, JPG, JPEG, txt, pdf, xml, doc, xls, xlsx, ppt, pptx, docx, opus, crypt14, crypt12, crypt13, crypt18, and crypt32 types, have also been compromised.
While SpaceCobra’s malware campaign is mainly targeting India, all Android users are advised to refrain from downloading APKs anywhere other than Google Play and be very careful with potentially risky permission requests while installing any app.