SquidLoader (Dropper) – Malware

Overview

In June 2024, LevelBlue Labs unveiled a sophisticated and highly evasive piece of malware known as SquidLoader. This newly identified loader, distinguished by its intricate evasion techniques, represents a significant development in the landscape of cyber threats. SquidLoader is designed to deliver secondary payloads to targeted systems through phishing attachments, a method that underscores its reliance on deception to infiltrate networks. The malware’s primary function is to load secondary payloads, and its stealthy nature makes it particularly challenging to detect and analyze.

SquidLoader first appeared in late April 2024, with evidence suggesting it was active for at least a month before its discovery. The malware has been observed targeting Chinese-speaking organizations, but its advanced evasion techniques raise concerns about its potential application against a broader range of targets. The malware’s evasion strategy includes deceptive file naming, the use of invalid certificates, and a host of technical obfuscation methods designed to bypass both static and dynamic analysis. These characteristics not only enhance its stealth but also complicate efforts to identify and neutralize it.

The loader’s technical sophistication is further exemplified by its integration with Cobalt Strike, a well-known penetration testing tool that has been modified to evade detection. SquidLoader employs a range of defensive evasion techniques, such as encrypted code sections, in-stack encrypted strings, and sophisticated control flow graph (CFG) obfuscation. These methods are indicative of a threat actor that is highly skilled in malware development and determined to evade conventional security measures.

Targets

Information

How they operate

Initial Access and Infection

SquidLoader primarily gains access to target systems through phishing campaigns. Victims are often lured by deceptive emails containing malicious attachments or links. These emails are crafted to appear legitimate, enticing recipients to open an infected file or click on a harmful link. Once executed, the malware payload is delivered, marking the beginning of a broader infection process. The initial access phase is critical as it sets the stage for SquidLoader to establish a foothold within the victim’s network.

Execution and Obfuscation

Upon successful execution, SquidLoader employs various techniques to conceal its presence and ensure uninterrupted operation. One of its key methods is obfuscation. The malware uses encryption and packing techniques to obscure its code, making it challenging for traditional antivirus solutions and security analysts to detect and analyze. This obfuscation extends to file names and attributes, further complicating efforts to identify and remove the malware. Additionally, SquidLoader may rely on user interaction to execute its payload, requiring the victim to open or execute a seemingly innocuous file.

Persistence Mechanisms

To maintain control over an infected system, SquidLoader implements several persistence strategies. One common technique is the creation of startup items or modification of registry entries. By embedding itself into system startup processes, SquidLoader ensures that it is executed each time the system reboots. This persistence is crucial for long-term operation, as it allows the malware to remain active even after initial infection or partial cleanup attempts. In some cases, SquidLoader may also employ techniques to escalate privileges, further solidifying its control over the compromised system.

Command and Control Communication

SquidLoader establishes a robust command and control (C2) infrastructure to communicate with its operators. This communication is typically encrypted to evade network monitoring and analysis. The malware may use domain fronting techniques to obscure the true nature of its C2 traffic, disguising its data transmissions within legitimate web traffic. Through this channel, SquidLoader can receive commands, exfiltrate stolen data, and update its configuration, all while maintaining a low profile.

Exfiltration and Data Theft

The ultimate goal of SquidLoader is often data theft. It exfiltrates sensitive information from the infected system back to its operators using the established C2 channel. This data can include personal information, login credentials, financial data, and other valuable assets. The malware’s ability to efficiently transfer this data while avoiding detection underscores its effectiveness and the sophisticated nature of its design.

MITRE Tactics and Techniques

Initial Access

Phishing (T1566): SquidLoader often delivers its payload through phishing emails, which may include malicious attachments or links designed to trick the recipient into executing the malware.

Execution

User Execution (T1203): The malware relies on user interaction to execute the malicious payload, often requiring the user to open a malicious document or file.

Persistence

Startup Item (T1547.001): SquidLoader may establish persistence on the infected system by creating startup items or modifying registry entries to ensure it runs on system reboot.

Privilege Escalation

Exploitation for Privilege Escalation (T1068): Although not always present, SquidLoader may employ techniques to escalate privileges if necessary, depending on the malware’s objectives.

Defense Evasion

Obfuscated Files or Information (T1027): The malware uses various obfuscation techniques to hide its presence and evade detection, including encrypted code sections and misleading file names.
Signed Binary Proxy Execution (T1218): SquidLoader may utilize legitimate signed binaries to execute malicious code while avoiding detection.

Command and Control (C2)

C2 Communication (T1071): SquidLoader establishes command and control channels to communicate with its operators, often using encrypted communication to evade network monitoring.
Domain Fronting (T1071.001): The malware may employ domain fronting to obscure the true destination of its C2 traffic, enhancing its ability to evade detection.

Exfiltration

Exfiltration Over Command and Control Channel (T1041): SquidLoader can exfiltrate data over its C2 channel, sending stolen information back to the attackers.

References

• LevelBlue Labs Discovers Highly Evasive, New Loader Targeting Chinese Organizations