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Chinese APT Targets Telcos in 5G-Related Cyber-Espionage Campaign

Telemetry suggests that threat actor behind Operation Diànxùn is Mustang Panda, McAfee says.

A Chinese advanced persistent threat (APT) actor is targeting major telecommunications companies in the US, Europe, and Southeast Asia in a cyber-espionage campaign that appears designed to steal data pertaining to 5G technology.

The campaign — dubbed Operation Diànxùn — is likely motivated by the ban on the use of Chinese technology in 5G rollouts in several countries, McAfee says in a new report. According to the security vendor, the threat actor behind the campaign is using methods associated with Mustang Panda, a group that several security vendors previously have identified as working for the Chinese government.

Data related to Operation Diànxùn shows that victims were lured to a website purporting to be a career page for Huawei — widely regarded as the leader in the 5G space. Several governments, including the US, have barred the use of Huawei's 5G technology out of fears that it might contain backdoors that enable widespread spying. There's nothing to indicate that Huawei is in any way connected to the current threat campaign, however, McAfee says.

According to the security vendor, it's unclear how the attackers initially lured victims to the phishing site. But once victims got there, they were greeted with a webpage that looked very similar to Huawei's career site. The attackers used the fake website to download malware that masqueraded as a Flash application. The site from which the Flash application was downloaded also was carefully designed to appear like the official webpage in China for the Flash download site. The malware, among other things, downloaded the Cobalt Strike attack kit on compromised systems.

Thomas Roccia, senior security researcher with McAfee's Advanced Threat Research group, says that available telemetry suggests that Mustang Panda is the group behind the ongoing Operation Diànxùn threat campaign. "The targets are mainly in the telecommunications sector," he says. "Most of the organizations where we have observed telemetry hits, were expressing concerns regarding the rollout of 5G technology from China," suggesting the campaign is tied to the global race to deploy next-gen communications technology, he says.

Mustang Panda first surfaced back in 2014 and has been associated with attacks on organizations perceived as being of interest to the Chinese government. In 2017, CrowdStrike reported observing Mustang Panda members targeting a US-based think tank and several nongovernmental organizations with a nexus to Mongolia and the Mongolian government.

More recently, between May and September 2020, several security vendors (including McAfee and Recorded Future) observed a group using methods similar to Mustang Panda targeting the Vatican and other Catholic organizations in Hong Kong and Italy. The intrusions occurred ahead of a planned renewal of a 2018 agreement between China and the Vatican involving the Catholic community in China and appeared designed to give Beijing advance intelligence on the Holy See's negotiating position, Recorded Future said. McAfee says it also observed Mustang Panda threat activity in September 2020 involving decoy documents related to Catholicism, Tibet-Ladakh relations, and the United Nations General Assembly Security Council.

Single Threat Actor
Other security vendors, such as Recorded Future have attributed last year's attacks on the Vatican and other religious entities to a group called RedDelta. But Roccia says McAfee's analysis shows there's just one actor behind the ongoing Operation Diànxùn campaign and the ones against the religious institutions last year. "McAfee believes with a high level of confidence that the campaign can be attributed to Mustang Panda," Roccia says. "While previous research mentioned RedDelta and Mustang Panda as two separate groups, we believe, based on our research, that Mustang Panda and RedDelta are in fact the same threat group."

Most of the previous attacks that Mustang Panda has carried out have involved the use of PlugX, a remote access Trojan that various attack groups have used since at least 2008 to steal files and modify files, download malware, log keystrokes, and control a computer's webcam. However, with Operation Diànxùn, the threat group has eschewed the use of that particular method, though it is continuing to use Cobalt Strike as it has in previous campaigns, according to McAfee.

McAfee advocates that organizations implement a multilayer security approach to address threats such as those presented by Mustang Panda and other APT groups. Capabilities such as URL reputation checks, SSL decryption, and malware emulation are critical for analyzing Flash, .Net, and other active Web content that can be easily weaponized. Organizations also need to have both signature and behavioral analysis capabilities to detect threats directed at the enterprise endpoint environment. Also critical are controls for detecting and blocking communications between compromised host systems and external command-and-control servers and for proactively identifying defense evasion and persistence mechanisms, according to McAfee.

The security vendor's blog has listed the indicators of compromise and operating methods associated with Operation Diànxùn along with advice on how to protect against the threat.

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