North Korean threat actors have exploited the recently disclosed security flaws in ConnectWise ScreenConnect to deploy a new malware called TODDLERSHARK.

According to a report shared by Kroll with The Hacker News, TODDLERSHARK overlaps with known Kimsuky malware such as BabyShark and ReconShark.

"The threat actor gained access to the victim workstation by exploiting the exposed setup wizard of the ScreenConnect application," security researchers Keith Wojcieszek, George Glass, and Dave Truman said.

"They then leveraged their now 'hands on keyboard' access to use cmd.exe to execute mshta.exe with a URL to the Visual Basic (VB) based malware."

The ConnectWise flaws in question are CVE-2024-1708 and CVE-2024-1709, which came to light last month and have since come under heavy exploitation by multiple threat actors to deliver cryptocurrency miners, ransomware, remote access trojans, and stealer malware.

Kimsuky, also known as APT43, ARCHIPELAGO, Black Banshee, Emerald Sleet (previously Thallium), KTA082, Nickel Kimball, and Velvet Chollima, has steadily expanded its malware arsenal to include new tools, the most recent being GoBear and Troll Stealer.

BabyShark, first discovered in late 2018, is launched using an HTML Application (HTA) file. Once launched, the VB script malware exfiltrates system information to a command-and-control (C2) server, maintains persistence on the system, and awaits further instruction from the operator.

Then in May 2023, a variant of BabyShark dubbed ReconShark was observed being delivered to specifically targeted individuals through spear-phishing emails. TODDLERSHARK is assessed to be the latest evolution of the same malware due to code and behavioral similarities.

The malware, besides using a scheduled task for persistence, is engineered to capture and exfiltrate sensitive information about the compromised hosts, thereby acting as a valuable reconnaissance tool.

TODDLERSHARK "exhibits elements of polymorphic behavior in the form of changing identity strings in code, changing the position of code via generated junk code, and using uniquely generate C2 URLs, which could make this malware hard to detect in some environments," the researchers said.

The development comes as South Korea's National Intelligence Service (NIS) accused its northern counterpart of allegedly compromising the servers of two domestic (and unnamed) semiconductor manufacturers and pilfering valuable data.

The digital intrusions took place in December 2023 and February 2024. The threat actors are said to have targeted internet-exposed and vulnerable servers to gain initial access, subsequently leveraging living-off-the-land (LotL) techniques rather than dropping malware in order to better evade detection.

"North Korea may have begun preparations for its own production of semiconductors due to difficulties in procuring semiconductors due to sanctions against North Korea and increased demand due to the development of weapons such as satellite missiles," NIS said.

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