Cephalus Ransomware Exploits RDP for Initial Access in Latest Attack Campaign

Cybersecurity researchers at Huntress identified a novel ransomware variant dubbed Cephalus, deployed in two separate incidents targeting organizations lacking robust access controls.

This emerging threat, which claims its name from Greek mythology symbolizing inevitable tragedy, leverages exposed Remote Desktop Protocol (RDP) endpoints as its primary initial access vector, exploiting compromised credentials without multi-factor authentication (MFA).

The attacks, observed on August 13 and 16, involved sophisticated tactics including data exfiltration via the MEGA cloud storage platform and a unique DLL sideloading mechanism to evade detection.

Cephalus encrypts files with a .sss extension and drops ransom notes named recover.txt, pressuring victims by linking to purported news articles about prior breaches.

This development aligns with a broader trend of ransomware families, such as the recently documented Crux and KawaLocker variants, which similarly abuse legitimate tools and processes to infiltrate networks.

Threat actors behind Cephalus demonstrate a calculated approach, combining reconnaissance with rapid deployment to maximize disruption before endpoint detection and response (EDR) systems can intervene.

DLL Sideloading

A standout feature of Cephalus is its innovative execution chain, which exploits DLL sideloading through a legitimate SentinelOne executable, SentinelBrowserNativeHost.exe.

In both incidents, attackers placed this file in the compromised user’s Downloads folder and launched it without command-line arguments, suggesting a localized rather than network-wide deployment strategy.

The executable then loads SentinelAgentCore.dll, which in turn sideloads a data.bin file containing the core ransomware payload.

This method effectively masquerades malicious activity within trusted processes, complicating behavioral analysis by EDR tools.

Prior to encryption, Cephalus executes a series of embedded commands to dismantle system recovery options, starting with vssadmin delete shadows /all /quiet to erase Volume Shadow Copies.

It follows with multiple PowerShell invocations to add Windows Defender exclusions for paths like C:WindowsTemp and extensions such as .cache, .tmp, .dat, and .sss, while also disabling real-time monitoring via Set-MpPreference -DisableRealtimeMonitoring $true.

Registry modifications using reg.exe further cripple defenses by setting keys like HKLMSOFTWAREPoliciesMicrosoftWindows DefenderReal-Time ProtectionDisableRealtimeMonitoring to 1, effectively neutralizing antivirus capabilities.

Services including WinDefend, WdNisSvc, SecurityHealthService, and Sense are stopped and set to disabled startup types through additional PowerShell commands.

In one incident, Microsoft Defender detected and quarantined the payload, preventing full encryption, but the other resulted in successful file locking.

Data exfiltration was evident via MEGA, with processes like MEGAcmdUpdater.exe launched either directly or as scheduled tasks, copying sensitive files to remote repositories.

This exfil phase, often preceding ransomware activation, underscores the dual extortion model where stolen data amplifies leverage during negotiations.

Broader Implications for Threat Landscape

Cephalus ransom notes deviate from generic templates by incorporating personalized elements, such as addressing the victim’s domain directly and embedding links to articles on sites like InsecureWeb and DarkWebInformer detailing alleged prior data breaches from July and August 2025.

These notes assert data theft and provide GoFile.io links with passwords for sample verification, aiming to instill urgency and credibility.

The threat actors’ use of RDP highlights persistent vulnerabilities in remote access configurations, especially in environments without MFA or network segmentation.

While no direct affiliations to established ransomware-as-a-service (RaaS) groups like BlackByte have been confirmed, the tactics mirror those in Crux incidents, including abuse of legitimate binaries like svchost.exe and bcdedit.exe for recovery sabotage.

Organizations running SentinelOne or similar EDR solutions should monitor for anomalous executions in non-standard paths, such as user Downloads folders, and conduct regular audits of RDP exposures.

As ransomware evolves with AI-driven evasion and cloud-based exfiltration, proactive measures like least-privilege access, behavioral monitoring, and timely patching remain critical to mitigating these threats.

Huntress’s analysis emphasizes the value of threat hunting in identifying pre-encryption indicators, potentially averting full-scale incidents.

Indicator of Compromises (IoCs)

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