Multiple Chinese APTs establish major beachheads inside US infrastructure

Hacking teams working for the Chinese government are intent on burrowing into the farthest reaches of US infrastructure and establishing permanent presences there if possible. In the past two years, they have scored some wins that could seriously threaten national security.

If that wasn’t clear before, three reports released in the past week make it abundantly so. In one published by security firm Kaspersky, researchers detailed a suite of advanced spying tools used over the past two years by one group to establish a “permanent channel for data exfiltration” inside industrial infrastructure primarily in Europe and the US. A second report published Sunday by The New York Times said that a different group working for the Chinese government had hidden malware that could cause disruptions deep inside the critical infrastructure used by US military bases around the world. Those reports came nine days after Microsoft revealed a breach of email accounts belonging to 25 of its cloud customers, including the Departments of State and Commerce.

The operations appear to be coming from separate departments inside the Chinese government and targeting different parts of US and European infrastructure. The first group, tracked under the name Zirconium, is out to steal data from the targets it infects. A different group, known as Volt Typhoon, according to the NYT, aims to gain the long-term ability to cause disruptions inside US bases, possibly for use in the event of an armed conflict. In both cases, the groups are endeavoring to create permanent beachheads where they can surreptitiously set up shop.

APT seeks long-term relationship with air-gapped device

A report published by Kaspersky two weeks ago (part 1) and Monday (part 2) detailed 15 implants that give Zirconium an entire gamut of advanced capabilities. The implants’ capabilities range from stage one, persistent remote access to hacked machines, to a second stage that gathers data from those machines—and any air-gapped devices they connect to—to a third stage used to upload pilfered data to Zirconium-controlled command servers.

Zirconium is a hacking group that works for the People’s Republic of China. The unit has traditionally targeted a wide range of industrial and information entities, including those in government, financial, aerospace and defense organizations and businesses in the technology, construction, engineering, telecommunications, media, and insurance industries. Zirconium, which is also tracked under the names APt31 and Judgement Panda, is an example of an APT—or advanced persistent threat—a unit that hacks for, on behalf of, or as part of a nation-state.

When I last covered Zirconium in 2021, the government of France had warned the group had compromised large numbers of home and office routers for use as anonymity-providing relay boxes for performing stealth reconnaissance and attacks. France’s National Agency for Information Systems Security—abbreviated as ANSSI—warned national businesses and organizations at the time that the “large intrusion campaign [was] impacting numerous French entities.”

The Kaspersky report shows that around the same time of the large-scale router attack, Zirconium was busy with yet another major undertaking—one that involved using the 15 implants to ferret sensitive information fortified deep inside targeted networks. The malware typically gets installed in what are known as DLL hijackings. These types of attacks find ways to inject malicious code into the DLL files that make various Windows processes work. The malware covered its tracks by using the RC4 algorithm to encrypt data until just prior to being injected.

A worm component of the malware, Kaspersky said, can infect removable drives that, when plugged into an air-gapped device, locate sensitive data stored there and copy it. When plugged back into an Internet-connected machine, the infected disk device writes it there.

“Throughout the investigation, Kaspersky’s researchers observed the threat actors’ deliberate efforts to evade detection and analysis,” Kaspersky wrote. “They achieved this by concealing the payload in encrypted form within separate binary data files and embedding malicious code in the memory of legitimate applications through DLL hijacking and a chain of memory injections.”