Deja Vu: Reincarnated Botnet Struck Down

The hard-to-kill Kelihos/Hlux botnet -- now in its second and much larger version -- was crippled and shut down over the past few days by a team of researchers from Kaspersky Lab, CrowdStrike, Dell SecureWorks, and The Honeynet Project.

The researchers announced today that they had wrested control of the botnet, the descendent of the infamous Storm botnet, by poisoning the peer-to-peer network-based botnet with their own code, which ultimately diverted some 110,000 infected machines to their sinkhole server and out of the hands of the botnet operators.

Kelihos/Hlux (a.k.a. Hlux/Kelihos), which was taken down in the fall by Microsoft, Kaspersky, and researchers from several other organizations, had been spotted by researchers re-emerging over the past few months with a new version of its malware. The so-called Hlux.B/Kelihos.B, also a peer-to-peer botnet, was built for spamming, information-stealing, and some DDoS activity like its predecessors, but also came with an new function -- stealing Bitcoins and electronic wallets, as well as a flash-drive infection capability, according to the researchers. It was about three times as large as the first Hlux/Kelihos botnet.

But this time, Microsoft and its legal team weren't part of the operation. Kaspersky and CrowdStrike did not explain why, but acknowledged that they did not use legal force this time around. Microsoft has been on an aggressive litigation-based campaign against botnets during the past year, with its latest conquest of a massive Zeus botnet operation it announced earlier this week that allowed the software giant to physically seize command-and-control (C&C) servers.

"We commend Kaspersky and their industry partners for their action against the new Kelihos.b botnet. There is clearly a strong momentum happening in the fight against botnets. Cybercriminals should take recent disruptive events as a clear warning that private industry, law enforcement and the security community are on the move and it’s time for criminals to find a different, legitimate line of business," said Richard Boscovich, senior attorney in the Microsoft Digital Crimes Unit, in a statement.

Some security experts question whether the nonlegal route taken this time will be as effective, and there's still the bigger problem of not capturing the bad guys behind the botnet. The alleged botmaster, Andrey N. Sabelnikov, who was named in a legal filing by Microsoft, remains at large. Microsoft says Sabelnikov lives in St. Petersburg, Russia, is a contractor for a software development and consulting firm, and once worked as a software engineer and project manager at a firewall and antivirus firm, which was later identified in press reports as Agnitum.

Security experts agree that dismantling botnets is a game of whack-a-mole unless the bad guys are caught. "Taking down a botnet without capturing the bot masters/herders and malware authors is essentially the same as seizing guns from criminals without any arrests. A criminal can always find more guns," says Jerry Tubbs, CTO of Unveillance, which provides botnet and data-leakage monitoring services for enterprises.

And Kaspersky and CrowdStrike researchers do expect the criminals behind Hlux/Kelihos to keep trying to reinvent their botnet operation. "We can say we expect to see a new version as well," said Tillman Werner, senior research scientist at CrowdStrike, in a press briefing today detailing the latest takedown.

Hlux.B/Kelihos.B was designed to encrypt HTTP and Port 80 C&C traffic, and two layers of obfuscation for its binary code. Like previous versions, it uses a sophisticated layered architecture that keeps the botnet operators well-hidden, as well as the C&C servers. "It's a fairly complex architecture," Werner said.

So how did the researchers take down the botnet? "We have injected false information into the botnet ... fake job server lists that all pointed to our sinkhole machine, which then talks to the bots and makes sure they can't talk to [any other botnet]," Tillman said.

This botnet is known for its relative size, prolific spamming capabilities, as well as its staying power: It's technically in its fifth version, and it has a long history of being hunted and reinventing itself. It started out as the massive Storm botnet back in 2007, which later was replaced by Waledac (later taken down by researchers), then a short-lived Storm2 that was snuffed out before it got off the ground, and, most recently, the Kelihos/Hlux versions. What set this latest version apart is that it about five times bigger than the previous Kelihos version, and with its Bitcoin-stealing features, is not just for spamming and DDoSing anymore.

Most of the victims were in Poland, which had about one-fourth of the bots, followed by the U.S. (10.8 percent), Turkey (5 percent), Spain (3.7 percent), India (3.4 percent), Argentina (3.1 percent), Mexico (3.1 percent), Romania (2.9 percent), Bulgaria (2.6 percent), and the Ukraine (2.5 percent). The bulk of the infected machines were Windows XP-based, with 91,950 infections, followed by Windows 7, with 9,428, and Windows 7 SP1, with 5,335 infections.

Next Page: The botnet operators fight back The researchers said the operation to divert the bots began on March 21, when they set up the sinkhole lure. They found flaws in the peer-to-peer architecture that allowed them to inject messages into the botnet that propagated and redirected all of the bots to a sinkhole controlled by CrowdStrike. "They don't see any commands ... we pretend to be one of the peers in the peer-to-peer network. What we do instead of providing a real peer list is create a special peer list of entries to our peer system. We apply special tricks so it gets propagated to other machines," Werner said.

The Kelihos/Hlux botnet operators did try to fight back: They pushed out a new version of their bot software, and halted their spamming and DDoS attacks. But that didn't stop the takeover: The only way they could have prevented the takeover would have been to create an update within 10 to 15 minutes, according to CrowdStrike's Werner.

"Overall, this second sinkholing was very successful," said Marco Preuss, head of global research and analysis in Germany for Kaspersky Lab. "And what was also interesting to us is that this approach shows that peer-to-peer architectures in botnets are not protected from sinkholing."

Now it's up to the ISPs to get their users cleaned up. "We will keep the sinkhole up as long a necessary so no one gets control again," Tillman said. "We are working to take measure to inform the affected ISPs [to contact] their customers. Hopefully, we will see a decrease over time [of infected bots].

"But this is not the ultimate solution. This gang has been in operation since 2007 ... we need changes to legislative systems to [enact] new laws against cybercrime."

Kaspersky has provided an FAQ here on how the researchers disabled the botnet.

[ An emerging botnet based in the Republic of Georgia has caught the eyes of security researchers. See New Botnet Emanates From Republic Of Georgia, Researchers Say. ]

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