Iran-linked Charming Kitten APT enhanced its POWERSTAR Backdoor

Pierluigi Paganini June 30, 2023

Iran-linked Charming Kitten group used an updated version of the PowerShell backdoor called POWERSTAR in a spear-phishing campaign.

Security firm Volexity observed the Iran-linked Charming Kitten (aka APT35PhosphorusNewscaster, and Ajax Security Team) group using an updated version of the PowerShell backdoor POWERSTAR in a spear-phishing campaign.

Iran-linked Charming Kitten group, (aka APT35PhosphorusNewscaster, and Ajax Security Team) made the headlines in 2014 when experts at iSight issued a report describing the most elaborate net-based spying campaign organized by Iranian hackers using social media.

Microsoft has been tracking the threat actors at least since 2013, but experts believe that the cyberespionage group has been active since at least 2011 targeting journalists and activists in the Middle East, as well as organizations in the United States, and entities in the U.K., Israel, Iraq, and Saudi Arabia

“However, in a recently detected spear-phishing campaign, Volexity discovered that Charming Kitten was attempting to distribute an updated version of one of their backdoors, which Volexity calls POWERSTAR (also known as CharmPower).” reads the report published by Volexity.

“This new version of POWERSTAR was analyzed by the Volexity team and led the to the discovery that Charming Kitten has been evolving their malware alongside their spear-phishing techniques”

The threat actors enhanced anti-analysis measures of their POWERSTAR malware.

The POWERSTAR implant was first analyzed by Check Point researchers in early January 2022 while investigating attacks exploiting the Log4Shell vulnerabilities.

Volexity first spotted the POWERSTAR backdoor in 2021, the experts observed the Iranian APT distributing the malicious code in a surprising number of different ways.

The version observed in 2021 was rudimentary, the threat actors distributed it using a malicious macro embedded in DOCM file.

In Many, Volexity observed Charming Kitten attempting to distribute POWERSTAR via spear-phishing messages with an LNK file inside a password-protected RAR file. Upon executing the LNK files, the POWERSTAR backdoor is downloaded from Backblaze and attacker-controlled infrastructure.

The researchers pointed out that in recent months, Charming Kitten replaced their previously preferred cloud-hosting providers (OneDrive, AWS S3, Dropbox) with privately hosted infrastructure, Backblaze and IPFS.

The target of the attack was an organization that had published an article related to Iran.

The threat actors initially contacted the victims, asking them if they would be open to reviewing a document they had written related to US foreign policy.

Once the victim accepted to review the document, Charming Kitten continued the interaction with another benign email containing a list of questions, to which the target then responded with answers. After multiple legitimate interactions, Charming Kitten finally sent a “draft report” to the victims. The “draft report” a password-protected RAR file containing a malicious LNK file. The attackers sent the password for the RAR archive in a separate email.

In order to make the backdoor hard to analyze, the decryption method is delivered separately from the initial code and avoids writing it on the disk.

“This has the added bonus of acting as an operational guardrail, as decoupling the decryption method from its command-and-control (C2) server prevents future successful decryption of the corresponding POWERSTAR payload.” continues the report.

The backdoor can remotely execute PowerShell and CSharp commands and code blocks. The malware achieves persistence via Startup tasks, Registry Run keys, and Batch/PowerShell scripts.

The malware used multiple C2 channels, including cloud file hosts, attacker-controlled servers, and IPFS-hosted files. The backdoor gathers system information, can take screenshots and enumerates running processes.

The Charming Kitten APT group expanded the cleanup module, which is used to erase all traces of the infection.

“Since Volexity first observed POWERSTAR in 2021, Charming Kitten has reworked the malware to make detection more difficult. The most significant change is the downloading of the decryption function from remotely hosted files. As previously discussed, this technique hinders detection of the malware outside of memory, and it gives the attacker an effective kill switch to prevent future analysis of the malware’s key functionality.”

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Pierluigi Paganini

(SecurityAffairs – hacking, IRAN)

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