Researchers see improvements in breakaway Zeus malware

A combination of the Zeus and SpyEye banking malware programs is taking shape, researchers say

A dangerous piece of malicious code responsible for stealing money from online bank accounts is being updated with new functions after its source code was leaked earlier this year, according to security researchers.

The Zeus malware has been a significant issue for banks. It is capable of intercepting login credentials in real-time on an infected computer and carrying out immediate transactions. Zeus is also frequently undetected by antivirus software.

Zeus is still used by cybercriminals, but it is believed active development on it has stopped. Its source code was leaked in March, and security researchers noticed that many of its functions were incorporated into a similar type of malware called SpyEye, a merger that has incrementally continued over the last few months.

The improvements are relatively minor at this point, such as tweaks to ensure that SpyEye evades security software programs, said Aviv Raff, CTO and cofounder of Seculert.

Another small improvement is that SpyEye's developers have made it harder for security researchers to track its command-and-control servers hosting the malware's configuration files. Servers hosting those configuration files -- which send instructions to computers infected with SpyEye -- could be tracked and monitored, but that has become more difficult with the version of SpyEye studied by Raff.

"They hide the configuration file of the malware behind a script which requires a specific key to download," Raff said in an interview over instant messenger. "The current tracker will need to know the key which the malware uses in order to download and analyze the malware configuration file."

That could pose problems for projects such as the Zeus and SpyEye trackers, which monitor live command-and-control servers for the programs.

There are many botnets that use the Zeus and SpyEye code. This latest one with the improvements is dubbed "Ice IX." The code needed to run the botnet is selling for around US$1,800, a competitive price, wrote Jorge Mieres, a malware analyst with Kaspersky Lab. SpyEye has been sold for as much as $10,000 in the past.

"It is clear that from now on, more new crimeware will be based on Zeus code," Mieres wrote on a Kaspersky blog. "New developers, hoping to profit from cybercrime, will attempt to create their own new alternatives based on this source."

Raff concurs with the prediction. "Unfortunately, I believe that we will see other cybercriminals take the source code of Zeus and add more harmful features," he said.

Earlier this month, a French security researcher who goes by the name Xylitol found a way to defeat a mechanism that prevented people who had not paid for SpyEye from using it. SpyEye uses VMProtect to lock an installation of the software program to a particular physical device, wrote Sean Bodmer, senior threat intelligence analyst, with the security company Damballa.

Xylitol's work helps security researchers since it opens up more information on how SpyEye is coded, which may help when developing defenses against it. Bodmer wrote.

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