Microsoft has disclosed that Chinese cyber actors are leveraging the Quad7 botnet, also known as CovertNetwork-1658, to target SOHO (small office/home office) routers for credential theft. Initially discovered by researcher Gi7w0rm, Quad7 consists of compromised routers from popular brands like TP-Link, ASUS, Ruckus, Axentra, and Zyxel, repurposed as part of an extensive botnet infrastructure.
Attackers exploit these devices through custom malware that allows remote Telnet access, setting unique port configurations for each device type to evade detection.
Additionally, attackers install a SOCKS5 proxy server on each compromised device, enabling them to blend malicious traffic with legitimate network activity for enhanced stealth. Microsoft’s report links the Quad7 botnet to multiple Chinese threat actors, notably Storm-0940, who use stolen credentials obtained through password-spray attacks on target networks.
Quad7’s operators are careful to minimize detection by attempting only a limited number of sign-ins per account each day, allowing them to bypass traditional security alarms. Once access is obtained, attackers swiftly infiltrate the network, moving laterally to dump credentials and install tools like Remote Access Trojans (RATs) and additional proxy services.
These measures establish persistence within the network, giving attackers prolonged access to sensitive information. Researchers from Sekoia observed that the Quad7 threat actors likely utilize a zero-day vulnerability in OpenWRT, a widely used open-source router operating system, to compromise SOHO routers. Sekoia documented how Quad7 used a combination of file disclosure and command injection vulnerabilities to gain unauthorized access to routers.
Although Microsoft and Sekoia cannot yet confirm the full extent of the exploit methods, the presence of such vulnerabilities in widely deployed devices highlights a critical risk for many organizations and remote workers relying on these devices for secure connectivity.
Microsoft advises companies to bolster network defenses, particularly focusing on SOHO devices used in remote workforce setups, to prevent further attacks.
The report highlights the importance of updating router firmware, monitoring for abnormal login activity, and implementing multi-factor authentication.
The Quad7 botnet and its sophisticated exploitation tactics underscore the rising risks posed by targeted cyber espionage campaigns and emphasize the need for heightened security awareness around personal and organizational network devices.
Reference:
