Group-IB reveals the unknown details of attacks from one of the most notorious APT groups: sophisticated espionage and APT techniques of the North Korean state-sponsored hackers
The North Korean hacker group named Lazarus has spied on the ideological enemies of the regime – state institutions and private corporations in the United States and South Korea – for years. Now Lazarus attacks banks and financial institutions around the world. Investigating not only the malicious code, but also the complex three-layer infrastructure of Lazarus, their encrypted channels and obfuscation tools, Group-IB reveals the previously unknown details of cyberattacks from one of the most notorious APT groups.

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There are two points of interest in the Potonggang district of Pyongyang – the National Defence Commission of the Democratic People's Republic of Korea (NDC) and the unfinished 105-storey Ryugyong Hotel. Both facilities are restricted for foreigners. The IPs identified in Group-IB's investigation refer to this area, we are unaware of other organisations or locations of interest and given the closed nature of the North Korean state cannot attribute further..
The Lazarus (aka DarkSeoul group) is allegedly controlled by Bureau 121, a division of the Reconnaissance General Bureau, a North Korean intelligence agency. Bureau 121 is responsible for conducting military cyber campaigns.
Lazarus is known to have specialized in DDoS attacks and corporate breaches targeting government, military, and aerospace institutions worldwide. Now that global economic pressure on North Korea has increased, Lazarus has shifted their focus to international financial organizations to conduct money thefts and espionage.

The most large-scale attack happened in February 2016, when hackers tried to steal about $1bln from the Central Bank of Bangladesh by exploiting weaknesses in the bank's security to infiltrate its system and gain access to computers with access to the SWIFT network. Due to a mistake in the payment document, the attackers managed to steal only $81 million. In March 2017, FBI and NSA officials publicly confirmed for the first time that Pyongyang was likely behind the attack on the Bangladeshi Central Bank.

In February 2017, several Polish banks were compromised.

Security researchers analysed the malware code, chiefly using this to attribute activity to Lazarus group. As tools are often reused by different groups, while helpful, malware analysis does not provide conclusive evidence of attribution.
Evolution of Lazarus
The major operations of the North Korean hacker group from 2009 to 2016
Troy operation
Period: 2009-2012
Target: cyber espionage against armed forces and governmental bodies of South Korea, sabotage.
Method: hacking websites, stealing information, DDoS-attacks.
DarkSeoul operation
Period: March 2013
Target: three broadcasting stations, a bank in South Korea.
Method: infecting with viruses, stealing and wiping information.
Attack on Sony Pictures
Period: November 2014
Target: Sony Pictures Entertainment (released the "Interview" movie, ridiculing the North Korean leader).
Method: infecting with malware, stealing and wiping data of the company's employees, correspondence, copies of unreleased films.
Attack on the Central Bank of Bangladesh
Period: 2016 year
Target: an attempt to steal $951million from the Central Bank of Bangladesh. Managed to steal only $81 million.
Method: a targeted attack on banks connected to SWIFT, the global financial messaging system.
Group-IB specialists have researched this group and now have evidence which identifies that North Korea is behind these attacks: We have detected and thoroughly analyzed multiple layers of C&C infrastructure used by Lazarus and have identified North Korean IP addresses from which the attacks were ultimately controlled. The following report is an outline of the criminal group's attack methodology for financial institutions, the malware employed and an overview of who they have planned to attack.
Through investigation of attacks on banks, we have proved that there is a strong connection between Lazarus and North Korea, while the analysis of IP addresses enables us to locate the attackers. We have detected and thoroughly analyzed the C&C infrastructure used by Lazarus. Our research shows how hackers gained access to the banks' information systems, what malware they used, and who their attempts were aimed at.
Dmitry Volkov
Head of Threat Intelligence Department, Сo-founder Group-IB
Attack Organizers: Involvement of North Korea
Due to analysis of Lazarus infrastructure, Group-IB specialists have detected that the attack was controlled from two IP addresses:

  • belongs to an autonomous system China Netcom. However, some sources indicate that the set of IPs is assigned to North Korea.

  • refers to a North Korean Internet service provider. The Whois service indicates that this address is allocated to the Potonggang District, perhaps coincidentally, where Natinal Defence Commission is located — the highest military body in North Korea.
Through investigation of public information, we came across a TV report from a South Korean news agency Arirang News dated 2016.
N. Korea hacks into 160 S. Korean public and private entities
In February 2016, the report said, North Korean hackers attacked two corporations:

  1. SK Group is one of the largest conglomerates in South Korea.
  2. The plot referred to the attack of North Korean hackers in February 2016 on two corporations: SK Group is one of the largest conglomerates in South Korea. Hanjin Group is the head company of Korean Airlines, its division produces under license combat helicopters and fighter jets.

On the screen behind the host, Group-IB specialists noticed two IP addresses and, which had been used to control Ghost RAT malware. Both IP addresses are in the same set of IP addresses as an IP address that was discovered by Group-IB specialists.

The South Korea's National Police Agency reportedly identified that the cyber- attack had been performed from the unfinished North Korean Ryugyong hotel. Group-IB could not confirm this location attribution.
Masquerading as Russian hackers
Starting in 2016, the Lazarus group tried to mask their activity by pretending to be Russian hackers:

  • The Client_TrafficForwarder module includes debugging symbols and strings containing Russian words in descriptions of commands received by malware from the C&C server.

    It's worth noting that "Russian commands" received from the server are not typical for a Russian native speaker, and in the case of the «poluchit» (to receive) command the meaning of the word contradicts the action (to send) it is intended for.
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  • To protect their executables, hackers used Enigma Protector, a commercial product, which was created by a Russian software developer.

  • Exploits for Flash and SilverLight were borrowed from the sets of exploits created by Russian-speaking hackers.

These masquerade techniques did originally mislead some researchers who conducted malware operational analysis.
Lazarus Infrastructure
Through analysis of Lazarus activity, Group-IB gained deep insight on a complex botnet infrastructure built by the hacker group to conduct their attacks. To mask malicious activity, the hackers used a three-layer architecture of compromised servers with SSL-encrypted channels established between them. In addition to encrypted traffic, data sent through SSL-channel was additionally encrypted. The attackers achieved anonymity by employing a legitimate VPN client - SoftEther VPN. In some cases, they also used corporate web servers that were part of the attacked infrastructure.
Unique tools
To control infected machines, the hackers employed multi-module tools, attempting to complicate malware analysis. That said, they managed to conduct several successful attacks without employing 0-day exploits. Lazarus demonstrated a flexible approach to attacks by applying different hacking tools, which prevented their detection by endpoint security solutions.
The earliest indicator of attacks on financial institutions compromise detected by Group-IB is dated March 2016. This was directly after the Central Bank of Bangladesh incidet, which took place in February 2016, where attackers attempted to steal $1 billion USD. Only a spelling mistake in an online bank transfer instruction helped prevent them from stealing more than $81 million USD. Following this incident, the group modified its tactics and tools, adapting them to the changing environment and misleading researchers.

Through analysis of compromised networks, Group-IB identified IP addresses of universities in the US, Canada, Great Britain, India, Bulgaria, Poland, Turkey, pharmaceutical companies in Japan and China, as well as government subnets in various countries.
Emerging trend
A state-sponsored hacker group Lazarus managed to gain fraudulent access to the SWIFT network of attacked banks. This is believed to be a growing trend: state-sponsored hackers are demonstrating an increased interest in conducting attacks on financial institutions, which are considered a component of the national critical infrastructure in some countries. At the moment, only a few similar incidents have been detected. For example, in 2010-2013 the NSA reportedly penetrated the SWIFT banking network and monitored a number of Middle East banks. In late 2016, attacks on Ukrainian banks were conducted, allegedly as part of the BlackEnergy operation. However, researchers expect that the number of attacks on financial institutions by state-backed hackers may significantly increase in the future.
To conduct attacks, the criminals developed toolsets to control C&C servers and infected machines, built a three-layer C&C infrastructure, and compromised dozens of large web resources. A detailed technical analysis of the infrastructure is in the chapter "Preparing and conducting an attack" in the full version of the report.
Infection of web resources
To infiltrate systems of their interest, Lazarus conducted watering-hole attacks leveraging compromised resources often visited by their potential victims, such as websites of financial regulators and government agencies in several countries.

Some of these resources are listed below:

  • knf.gov.pl — The Polish Financial Supervision Authority
  • cnvb.gob.mx — National Banking and Securities Commission, Mexico
  • brou.com.uy — Banco de la República Oriental del Uruguay, a state-owned bank in Uruguay
Through examination of a code on a web server with exploits, Group-
IB specialists detected a list of 255 IP address ranges. That said, hackers infected only those users who visited the website from a computer within the specified IP range. Based on this list, researchers have compiled a map of the countries that were of interest to the attackers, which is presented below.
Based on this list, researchers have compiled a map of the countries that were of interest to the attackers, which is presented below.
To gain access to websites of financial regulators and bank local networks, hackers used known vulnerabilities in JBoss and Liferay. They compiled an exploit for Silverlight CVE-2016-0034 (MS16-006) which earlier was included into RIG and Angler exploit kits, they also used Flash exploits from Neutrino Exploit Kit.
Establishment of C&C infrastructure:
Attackers created a 3-tier infrastructure that consisted of compromised servers, between which the hackers established SSL-encrypted channels. The network interaction with the attacked computer was carried out only from the Layer 1 server, which acted as a C&C server. In some cases, hackers placed the Layer 1 server inside the organization attacked in order to reduce the risk of detection. They gained access to these servers by brute forcing password for RDP.
Hackers used original set of tools
After trying to steal $ 1 billion from the Central Bank of Bangladesh in February 2016, hackers from Lazarus promptly changed their tactics and modified their unique set of tools.
Used to manage windows-based server infrastructure
Forwards traffic from one external server to another
Backend_ Listener
Establishes connection with servers with installed Server_RAT, gets commands directly from threat actor
Admin tool to send commands to infected computers
SWIFT toolbox
Used to work with SWIFT, consists of Alliance software Hook Files and SWIFT transactions Information Harvester
Through in-depth analysis of the tools used by the attackers, Group-IB specialists identified the scheme of communications between nodes within the C&C infrastructure.
Server_RAT was installed on all infrastructure levels to control the compromised infrastructure Server_RAT constantly listens on port 3365, to which attackers connected to control the server. To ensure the availability of the specified port, the malicious program added a special rule to the firewall that allowed incoming connections to this port. Infected computers performed an outgoing connection to the compromised server acting as proxy via port 443, which is usually open in corporate networks.

Based on analysis of the Server_RAT functionality, Group-IB specialists identified that Server_RAT responds to certain requests in a specific way. Keeping in mind that Server_RAT constantly keeps port 3365 open, we scanned the Internet for open ports 3365. Following this, we checked a list of detected servers to identify those servers where Server_RAT was installed. As a result, Group-IB specialists received a list of 74 IP addresses.
Server_TrafficForwarder was installed on the first and second server level — this module redirected traffic from one server to another.
In some cases, Server_TrafficForwarder was installed on servers inside the attacked organization. This approach allows the criminal to avoid detection of suspicious connections to the external network or bypass network connection restrictions with prohibited connections to the external network from specific computers/servers, which is often applied by companies to protect the most critical PCs, such as those of SWIFT operators.

After the start, Server_TrafficForwarder reads the contents of the key and certificate files from the root directory that will be used to create an SSL tunnel. That said, the file does not contain any information about the servers to which traffic should be transferred. At the first start, hackers manually specify the port to listen on as well as the address of the C&C server to which traffic is to be sent. In the event the port is not specified, the program listens on a random port and waits for incoming connections.

To verify communication with a compromised server, hackers check if the client is appropriate: they send the first network request; when a response is received from the client, they decrypt it and compare with a previously known response. In the event the responses are different, the connection is broken.
Backend_Listener is software installed by attackers on Layer 3 servers. The program performs communications with other servers, receives commands from the administrator and sends them in chain order to the end infected computer.
Backend_Listener listens on the two ports:

  • port 8080, to which it accepts SSL connections from Layer 2 servers.
  • port 9090, to which it receives requests from the control system, which Group-IB dubbed Admin_Tool.
To encrypt traffic, the wolfSSL open source library is used. After the application is launched, the private key and certificate files are loaded from the root directory. These files are used to encrypt traffic between the C&C server and connected clients.

To defend against security solutions designed to "unpack" SSL encrypted traffic, Backend_Listener encrypts all data sent over an SSL channel using an additional reversible encryption algorithm and performs legitimacy tests.

To reverse-engineer the protocol of server communications with clients, Group-IB specialists have developed a client that successfully connects to both above-mentioned ports.
VPN: the attackers installed SoftEther VPN (http://softether.net/) service supported by University of Tsukuba, Japan on some servers to unsure additional level of anonymity. Lazarus have chosen this service for the following reasons:

  • This legitimate application isn't detected by security solutions
  • It establishes VPN connection via ICMP or DNS to avoid detection by network security solutions
  • It contains Dynamic DNS function, which means that if a compromised system has a dynamic IP address, the attacker can always find it by DNS name connected to the VPN client
  • This VPN client supports Windows, Linux, FreeBSD, Solaris, Mac OS X

Tools to control infected PCs
In addition to multi-layer server structure, hackers developed a specialized toolset to perform remote control over infected PCs.

The group actively attempted to conceal their activity, complicating malware detection and analysis as much as possible. All tools consist of modules, which were delivered separately to target organizations only. To complicate malware investigation, criminals encrypted their tools.

Modular architecture of the victim's infection process provides both additional flexibility and anonymity throughout the cyber-attack. This scheme allows hackers to divide software development activity between teams, as well as to ensure the reuse of program code.
Recon is a backdoor that is initially installed on the target machine through successful execution of exploits. This module is used by hackers to perform initial reconnaissance to search for systems of interest.
Dropper extracts and decrypts Loader, embeds it into the system and extracts Client_RAT.
Loader is used to decrypt the payload — Client_RAT or Client_ TrafficForwarder — and inject it into the legitimate process (for example, in lsass.exe).
This module was installed on one of the PCs in the internal network of the attacked organization. It proxies traffic from C&C server to PCs in the local network of the attacked organization.
The Client_RAT program provides full control over the target system: it allows you to analyze the system, download and execute files, transfer data from the infected computer to the C&C server.
Taking into consideration strengthening economic sanctions against North Korea, as well as the geopolitical tension in the region, we expect new wave of Lazarus attacks against global financial institutions. With that said, we strongly recommend the banks to learn more about targeted attacks' tactics and techniques, increase corporate cybersecurity awareness, and cooperate with the companies providing relevant Threat Intelligence.
Dmitry Volkov
Head of Threat Intelligence Department Сo-founder Group-IB
Updates of software and operating systems
To prevent infection through execution of exploits, it is enough to update your Microsoft and Adobe software.The Lazarus group uses known and patched exploits, rather than leveraging 0day vulnerabilities. That's why, even usual software updates did not allow attackers to infiltrate corporate networks. Unfortunately, some of the attacked banks did not comply with this requirement.
Network traffic analysis
Even if the criminals have managed to obtain access to the corporate network, the attack can still be successfully prevented. After intrusion into the company's network hackers still need to find systems of their interest, and gain access to them. It takes days and even months sometimes, and this time should be used to detect the malicious activity.

Attackers use malicious programs that transfer data to the C&C server - Layer 1. Communications between the infected computer and the C&C server can be identified through network traffic analysis. All communications are encrypted, that is why you should use solutions that can detect network anomalies based on threat intelligence data.
Application whitelisting
Application whitelisting should be introduced into critical bank servers. This will prevent attackers from installing their remote control tools, monitoring financial transactions, and escalating privileges. It also helps to identify unauthorized attempts to run such malicious applications.
Checking indicators of compromise
The "Indicators of compromise" section contains current and historical intelligence data. With these indicators, you can check if your organization was, or is, under attack by Lazarus. The group uses legitimate compromised servers, that's why these indicators can give false positives. You will find a list of indicators in the full version of the report.
Professional response
And the most important thing: if you have detected trails of a targeted attack at any stage, you need to involve specialized companies for its analysis. Incorrect responses to the attack result in the attacker activity remaining partly undetected to enable criminals to achieve their goal — to steal money.
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