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Encryption and code refreshes to group’s main attack tool have made it stealthier and harder to stop, ESET says.

Fancy Bear, the Russian advanced persistent threat group associated with the infamous intrusion at the Democratic National Committee last year among numerous other break-ins, may have become just a little bit more dangerous.

The group — also referred to as Sednit, APT28, and Sofacy — appears to have recently refurbished its primary malware tool, Xagent, and added new functionality to make it decidedly stealthier and harder to stop, security vendor ESET said in an advisory Thursday.

The modular backdoor has been a central component of Fancy Bear’s campaigns for several years. Initial versions of the tool were designed to break into Windows and Linux systems. But it has been updated in the past two years to include support for iOS, Android, and, since the beginning of this year, OS X.

The fourth and latest version of the malware comes with new techniques for obfuscating strings and all run-time type information. The techniques, according to ESET, have significantly improved the malware’s encryption abilities. The Fancy Bear/Sednit group also has upgraded some of the code used for command and control (C&C) purposes and added a new domain generation algorithm (DGA) feature for quickly creating fallback C&C domains.

“The previous version of Xagent modular backdoor was already very complex, but the new version is even more,” says Thomas Dupuy, malware researcher at ESET.

ESET is still completing its analysis of the new features in Xagent, but the new encryption algorithm and DGA implementation are significant, he says. “The former makes the malware analysis more difficult while the latter makes domain takeover more challenging, as there are more domains to take down or seize,” Dupuy says.

In addition to the encryption and DGA, Fancy Bear also has some internal improvements such as new commands that can be used for hiding malware configuration data and other data on a target system. The authors of the malware have redesigned and refactored some existing components so it has become harder to recognize previously discovered mechanisms. Xagent also now has the ability to take screenshots of the target’s desktop.

The new version of Xagent has improved Fancy Bear/Sednit’s ability to stay under the radar, Dupuy says. “Some of these changes are definitely related to the fact that they are trying to avoid too much attention while others are to make security researchers’ jobs harder,” he notes.

Otherwise, Fancy Bear/Sednit’s tactics and techniques have remained largely unchanged. The group still relies heavily on the use of very cleverly crafted phishing emails to try and get targets to click on links that lead to malicious domains or to download malware.

It has largely stopped using Sedkit, an exploit kit used in numerous previous attacks, and has increasingly begun using a platform called DealersChoice to initially breach systems.

DealersChoice, according to ESET, can generate documents with embedded Adobe Flash Player exploits. One version of the platform is designed to first check which version of Flash Player a target system might be running and then exploit it. Another variant first contacts a C&C server and then deliver a selected Flash exploit.

Like the previous Sedkit exploit kit, DealersChoice is designed to scour international news stories and include references to relevant ones in the malicious emails it generates and sends to potential targets.

From a targeting standpoint, Fancy Bear/Sednit still appears to be focused on the same objectives, Dupuy says. It’s still attacking government departments and embassies all over the world, with a particular interest in Eastern Europe, where the group regularly targets individuals and organizations involved in geopolitics.

Generally, Fancy Bear’s tactics, techniques, and procedures have not changed a whole lot, Dupuy says. But the group has shown a tendency to vary its infection techniques, he adds. “The new version is more complex to analyze, which slows down ability to defend against the malware,” he notes.

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Jai Vijayan is a seasoned technology reporter with over 20 years of experience in IT trade journalism. He was most recently a Senior Editor at Computerworld, where he covered information security and data privacy issues for the publication. Over the course of his 20-year … View Full Bio

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