Security firms disable the second Kelihos botnet

The second Kelihos botnet was made up of over 100,000 compromised computers, security researchers said

A group of malware experts from security companies Kaspersky Lab, CrowdStrike, Dell SecureWorks and the Honeynet Project, have worked together to disable the second version of the Kelihos botnet, which is significantly bigger than the one shut down by Microsoft and its partners in September 2011.

The Kelihos botnet, also known as Hlux, is considered the successor of the Waledac and Storm botnets. Like its predecessors, it has a peer-to-peer-like architecture and was primarily used for spam and launching DDoS (distributed denial-of-service) attacks.

In September 2011, a coalition of companies that included Microsoft, Kaspersky Lab, SurfNET and Kyrus Tech, managed to take control of the original Kelihos botnet and disable its command-and-control infrastructure.

However, back in January, Kaspersky Lab researchers discovered a new version of the botnet, which had an improved communication protocol and the ability to mine and steal Bitcoins, a type of virtual currency.

Last week, after analyzing the new botnet for the past several months, the new group of experts decided to launch a new takedown operation, said Stefan Ortloff of Kaspersky Lab in a blog post on Wednesday.

Disabling botnets with a decentralized architecture like Kelihos is more complicated than simply taking over a few command-and-control servers, because the botnet clients are also able to exchange instructions among themselves.

In order to prevent the botnet's authors from updating the botnet through the peer-to-peer infrastructure, the security companies had to set up rogue botnet clients around the world and use special techniques to trick all other infected machines to only connect to servers operated by Kaspersky Lab. This is known as sinkholing, said CrowdStrike researcher Tillmann Werner during a press conference Wednesday.

Once the majority of the botnet clients connected to the sinkhole servers, the researchers realized that the second Kelihos botnet was significantly larger than the one taken down in September 2011. It has almost 110,000 infected hosts compared to the first botnet's 40,000, said Kaspersky Lab's Marco Preuss during the same press conference.

Twenty-five percent of the new Kelihos bots were located in Poland and 10 percent were in the U.S. The high concentration of bots in Poland suggests that the cybercriminal gang behind Kelihos paid other botnet operators to have their malware distributed on computers from a country with cheaper pay-pay-install prices, Werner said.

The vast majority of Kelihos-infected computers -- over 90,000 -- run Windows XP. Around 10,000 run Windows 7 and 5,000 run Windows 7 with Service Pack 1.

Microsoft was not involved in the new takedown operation, but was informed about it, Werner said. During the September 2011 operation, the company's role was to disable the domain names the Kelihos gang could have used to take back control of the botnet.

However, this type of action was no longer necessary, because this fallback communication channel is only used by the Kelihos bots if the primary peer-to-peer-based channel is disrupted, which doesn't happen with sinkholing, Werner said.

Kaspersky will notify Internet service providers about the Internet Protocol addresses on their networks that display Kelihos activity, so that they can contact the subscribers who own the infected machines. The sinkhole will be kept operational for as long as it is necessary, Preuß said.

Various signs suggest that the Kelihos gang gave up on the botnet soon after it was sinkholed. However, given that this was their fifth botnet -- including the Storm and Waledac variants -- they're unlikely to give up and will most likely create a new one, Werner said.

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