BLACK HAT USA - Las Vegas - Tom Grasso, unit chief of the FBI's cyber division, took the Black Hat stage to discuss the processes and partnerships leading up to the massive Avalanche takedown in December 2016.
Avalanche "wasn't a botnet," he noted at the beginning of his talk. It was an infrastructure for enabling botnets, created by two administrators and active since 2010. The multitiered network of servers was used to spread malware campaigns, facilitate "money mule" laundering schemes, and act as a fast-flux communication infrastructure for other botnets.
The network affected more than 500,000 systems and caused hundreds of millions of dollars in losses. Malware powered by Avalanche included Nymain ransomware and GozNym, a banking Trojan designed to steal credentials and initiate fraudulent wire transfers.
Grasso displayed an ad for Avalanche on criminal forum DirectConnection, where it was described as "ideal for hosting Trojans" with "bulletproof hosting" and high-speed uplinks. More than 800,000 malicious domains were associated with Avalanche; its complexity "demonstrates the great lengths criminals will go to, to make this work," he explained.
"We're not talking about some kid in his mom's basement; … we're talking about businessmen. This is a business to them," he said. "This was a strategic move by the criminals running this to add another level of complexity to make it unsusceptible to law enforcement intervention."
As part of his presentation, Grasso discussed the FBI's approach to reducing the threat of botnets. Its steps include neutralizing threat actors through arrest, charge, and prosecution; disabling the infrastructure; and mitigating the threat by sharing IOCs and signatures.
Working with the private sector is essential, he added. Private sector businesses identify priority threats and the FBI works with them to brainstorm solutions. Both sides share intel on the problem and determine a way to neutralize the threat.
The FBI worked with private companies, international organizations, and foreign governments to take down Avalanche. Partner organizations included FBI agents, German state and federal police, Ukrainian police, Shadowserver, nonprofit Registrar of the Last Resort, and Fraunhofer, a German company that mapped out the technical patterns of Avalanche.
"The criminals are really excellent at collaborating. … It's one of the reasons they're great at what they do," said Grasso. "If we're going to do something about these problems, it's gonna be a joint effort."
In November 2015, it was discovered the administrators behind Avalanche were using a private server in Moldova to communicate with clients and for the domain registration panel. In January 2016, they moved the functions of the Moldovan server to a private server in the US.
A search warrant on the private server revealed email addresses for the administrators and a buddy list with more than 200 clients. Official discovered easy-reg.net was an administrative panel that stated 3,000 domains run over Avalanche websites. One chat discovered by officials included an explanation of the "fast-flux" decisions driving criminal activity on the network.
The investigation of Avalanche included the arrest of five individuals and searches across four countries, the seizing of servers, and an "unprecedented effort" to sinkhole more than 800,000 malicious domains associated with the infrastructure.
Going forward, Grasso emphasized the importance of working with private and international partners as criminals conduct operations abroad.
"The bad guys are never in your country. … They're always somewhere else when you're investigating this stuff," he said.