WatchGuard Threat Lab Report Finds Top Threat Arriving Exclusively Over Encrypted Connections

SEATTLE – December 15, 2022 – WatchGuard® Technologies, a global leader in unified cybersecurity, today released its latest quarterly Internet Security Report, detailing the top malware trends, and network and endpoint security threats analyzed by WatchGuard Threat Lab researchers in Q3 2022. Key findings from the data reveal the quarter’s top malware threat was detected exclusively over encrypted connections, ICS attacks are maintaining popularity, LemonDuck malware is evolving beyond cryptominer delivery, a Minecraft cheat engine is delivering a malicious payload, and much more.

“We can’t emphasize enough how important it is for HTTPS inspection to be enabled, even if it requires some tuning and exceptions to do properly. The majority of malware arrives over encrypted HTTPS, and not inspecting it means you’re missing those threats,” said Corey Nachreiner, chief security officer at WatchGuard Technologies. “Rightfully so, the big prizes for attackers like an Exchange server or a SCADA management system deserve extraordinary attention as well this quarter. When a patch is available, it’s important to update immediately, as attackers will eventually benefit from any organization who has yet to implement the latest patch.”

Other key findings from the Q3 Internet Security Report include:

 

1. The vast majority of malware arriving over encrypted connections – Although the Agent.IIQ placed third in the normal top 10 malware list this quarter, it landed in the #1 spot at the top of the encrypted malware list for Q3. In fact, if you look at the detections for it on both of these lists, you’ll see all Agent.IIQ detections come from encrypted connections. In Q3, if a Firebox was inspecting encrypted traffic, 82% of the malware it detected was through that encrypted connection, leaving only a meager 18% detected without encryption. If you’re not inspecting encrypted traffic on your Firebox, it’s very likely that this average ratio remains true, and you are missing a huge portion of malware. Hopefully, you at least have endpoint protection implemented for a chance to catch it further down the cyber kill chain.
   
    
2. ICS and SCADA systems remain trending attack targets – New to the top 10 network attacks list this quarter is a SQL injection-type attack that affected several vendors. One of these companies is Advantech, whose WebAccess portal is used for SCADA systems across a variety of critical infrastructure. Another serious exploit in Q3, which also appeared in the top five network attacks by volume, involved Schneider Electric's U.motion Builder software versions 1.2.1 and prior. This is a stark reminder that attackers aren’t quietly waiting for an opportunity – rather, they are actively seeking system compromise wherever possible.
   
    
3. Exchange server vulnerabilities continuing to pose risk – The most recent CVE among the Threat Lab’s new signatures this quarter, CVE-2021-26855, is a Microsoft Exchange Server Remote Code Execution (RCE) vulnerability for on-premises servers. This RCE vulnerability was given a 9.8 CVE score and is known to have been exploited. The date and severity of this CVE-2021-26855 should also ring a bell, as it is one of the exploits used by the group HAFNIUM. While most Exchange servers affected by it have likely been patched by now, most does not equate to all. Therefore, risks remain.
   
    
4. Threat actors targeting seekers of free software – Fugrafa downloads malware that injects malicious code. This quarter, the Threat Lab examined a sample of it that was found in a cheat engine for the popular game Minecraft. While the file shared primarily on Discord claims to be the Minecraft cheat engine Vape V4 Beta, that’s not all it contains. Agent.FZUW has some similarities to Variant.Fugrafa, but instead of installation through a cheat engine, the file itself pretends to have cracked software. The Threat Lab discovered this particular sample has connections with Racoon Stealer, a cryptocurrency hacking campaign used to hijack account information from cryptocurrency exchange services.
   
    
5. LemonDuck malware evolving beyond cryptominer delivery – Even with a dip in total blocked or tracked malware domains for the third quarter of 2022, it is easy to see that attacks on unsuspecting users are still high. With three new additions to the top malware domains list – two of which were former LemonDuck malware domains, and the other part of an Emotet classified domain – Q3 saw more malware and attempted malware sites that were newer domains than usual. This trend will change and modify with the landscape of cryptocurrency in turmoil as attackers look for other venues to trick users. Keeping DNS protection enabled is a way to monitor and block unsuspecting users from allowing malware or other serious issues into your organization.  
   
    
6. JavaScript obfuscation in exploit kits – Signature 1132518, a generic vulnerability for detecting JavaScript Obfuscation attacks against browsers, was the only new addition to the most-widespread network attack signatures list this quarter. JavaScript is a common vector for attacking users and threat actors use JavaScript-based exploit kits all the time – in malvertising, watering hole and phishing attacks, just to name a few. As the defensive fortifications have improved on browsers, so have attackers’ ability to obfuscate malicious JavaScript code.

7. Anatomy of commoditized adversary-in-the-middle attacks – While multi-factor authentication (MFA) is undeniably the single best technology you can deploy to protect against the bulk of authentication attacks, it is not on its own a silver bullet against all attack vectors. Cyber adversaries have made this clear with the rapid rise and commoditization of adversary-in-the-middle (AitM) attacks, and the Threat Lab’s deep dive on EvilProxy, the top security incident of Q3, shows just how malicious actors are beginning to pivot to more sophisticated AitM techniques. Like the Ransomware as a Service offering made popular in recent years, the September 2022 release of an AitM toolkit called EvilProxy has significantly lowered the barrier of entry for what was previously a sophisticated attack technique. From a defensive standpoint, successfully combatting this kind of AitM attack technique requires a mix of both technical tools and user awareness.
   
    
8. A malware family with Gothic Panda ties – The Threat Lab’s Q2 2022 report described how Gothic Panda—a state sponsored threat actor connected to China’s Ministry of State Security—was known to use one of the top malware detections from that quarter. Interestingly, the top encrypted malware list for Q3 includes a malware family called Taidoor, which was not only created by Gothic Panda but has only been seen used by Chinese government cyber actors. While this malware typically focuses on targets in Japan and Taiwan in general, the Generic.Taidoor sample analyzed this quarter was found primarily targeting organizations in France, suggesting that some Fireboxes in this region may have detected and blocked parts of a state-sponsored cyber attack.
   
    
9. New ransomware and extortion groups in the wild – Additionally this quarter, the Threat Lab is excited to announce a new, concerted effort to track current ransomware extortion groups and build out its threat intelligence capabilities to provide more ransomware-related information in future reports. In Q3, LockBit tops the list for Q3 with over 200 public extortions on their dark web page – nearly four times more than that of Basta, the second most prolific ransomware group WatchGuard observed this quarter.
   
    

WatchGuard’s quarterly research reports are based on anonymized Firebox Feed data from active WatchGuard Fireboxes whose owners have opted to share data in direct support of the Threat Lab’s research efforts. In Q3, WatchGuard blocked a total of more than 17.3 million malware variants (211 per device) and more than 2.3 million network threats (28 per device). The full report includes details on additional malware and network trends from Q3 2022, recommended security strategies, critical defense tips for businesses of all sizes and in any sector, and more.

For a detailed view of WatchGuard’s research, read the complete Q3 2022 Internet Security Report here.