Microsoft has uncovered a new “FakePenny” ransomware variant being deployed by a North Korean threat actor to target organizations in the software, information technology, education and defense industrial base sectors for both espionage and monetary gains.
The threat actor, which Microsoft tracks as Moonstone Sleet, was first observed delivering a new custom ransomware variant in April, to an undisclosed company whose networks it compromised a couple of months earlier.
The ransomware is straightforward and contains a loader and an encryptor module. North Korean threat actor groups have previously developed such custom ransomware, but “this is the first time we have observed this threat actor deploying ransomware,” the tech giant said.
“Microsoft assesses that Moonstone Sleet’s objective in deploying the ransomware is financial gain, suggesting the actor conducts cyber operations for both intelligence collection and revenue generation.”
FakePenny ransomware demands exorbitant ransoms, with recent demands reaching $6.6 million in Bitcoin. “This is in stark contrast to the lower ransom demands of previous North Korea ransomware attacks, like WannaCry 2.0 and H0lyGh0st,” Microsoft said.
Notably, the ransom note used by FakePenny ransomware closely resembles the one employed in the infamous NotPetya ransomware attack, which is attributed to the North Korean group Seashell Blizzard. This continuity in tactics highlights the interconnected nature of North Korean cyber operations.
Moonstone Sleet’s Strategy and Tradecraft
Moonstone Sleet has a diverse set of operations supporting its financial and espionage objectives. This group has been observed creating fake companies, employing trojanized versions of legitimate tools, and even developing malicious games to infiltrate targets. Their ability to conduct concurrent operations and quickly evolve and adapt their techniques is notable.
The threat actor, as noted earlier, has several different tradecrafts under its belt. In early August 2023, Moonstone Sleet delivered a compromised version of PuTTY, an open-source terminal emulator, through platforms like LinkedIn, Telegram, and freelancing websites. The trojanized software decrypted and executed the embedded malware when the user provided an IP and password mentioned in a text document contained in the malicious Zip file that the threat actor sent. The same technique was used by another North Korean actor Diamond Sleet.
Moonstone Sleet has also targeted victims using malicious “npm” packages distributed through freelancing sites and social media. These packages often masqueraded as technical assessments, lead to additional malware downloads when executed.
Since February 2024, Moonstone Sleet has also taken a different approach by using a malicious game called DeTankWar to infect devices. The group approached targets posing as a game developer or fake company, presenting the game as a blockchain project. Upon launching the game, additional malicious DLLs were loaded, executing a custom malware loader known as “YouieLoad.” This loader performs network and user discovery and browser data collection.
Fake Companies and Work-for-Hire Schemes
Since January 2024, Moonstone Sleet has created several fake companies, including StarGlow Ventures and C.C. Waterfall, to deceive targets. These companies posed as software development and IT service firms, often related to blockchain and AI, to establish trust and gain access to organizations.
Moonstone Sleet has also pursued employment opportunities in legitimate companies, which is consistent with reports of North Korea using remote IT workers to generate revenue. Recently, U.S. charged North Korean job fraud nexus that was amassing funds to support its nuclear program. The nexus scammed more than 300 U.S. companies and accumulated at least $6.8 million.
This employment tactic could also provide another avenue for gaining unauthorized access to organizations.
Moonstone Sleet’s notable attacks include compromising a defense technology company to steal credentials and intellectual property and deploying ransomware against a drone technology firm.
“Despite being new, Moonstone Sleet has demonstrated that it will continue to mature, develop, and evolve, and has positioned itself to be a preeminent threat actor conducting sophisticated attacks on behalf of the North Korean regime.”
Defending Against Moonstone Sleet
To defend against Moonstone Sleet, Microsoft recommends endpoint detection and response (EDR), implementing attack surface reduction rules to block executable content from email clients and webmail, preventing executable files from running unless they meet specific criteria, use advanced protection against ransomware, and block credential stealing from LSASS.
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