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Honeynet Project researchers witness stealthy new method of botnet communication

Now the bad guys have discovered a way to set up a stealthy, continuous connection between the machines they infect and their own command and control servers.

Researchers with the Honeynet Project have been studying a new method being used by botnet operators and other cyber criminals that sets up what's called a "reverse tunnel proxy" connection -- a connection through the victim's Network Address Translation (NAT)-based filtering device such as a home router or other router or firewall.

What makes this approach different from traditional botnet relationships is that the command and control machine doesn't rely on the bot to "check in" and get its latest instructions, so it's more of a continuous connection, says Ralph Logan, a member of the board for the Honeypot Project and its chief public relations officer.

"The bot and the C&C don't need to maintain a connection for reconfiguration, 're-tooling,' or retasking," says Logan, who is also principal with The Logan Group. "They've created a new way to bypass any kind of routing device that gives you private IP addresses behind it."

The Honeynet Project, which will publish these findings next week in the latest in its series of "Know Your Enemy" white papers -- called "Know Your Enemy Lite: Proxy Threats - Socks v666" -- says the reverse tunnel proxy botnet is different from the classic IRC-based approach because it sets up dedicated proxies inside the victim's network from which controllers can initiate connection requests. A traditional bot initiates its connection via IRC, HTTP, or a peer-to-peer connection, waits for a command, and then follows the orders on behalf of the C&C machine.

Although home routers are the obvious mark, Logan says the technique could also be used against corporate networks as well.

An underlying weakness here is the common misperception that NAT protects users against direct attacks by assigning private and non-routable IP addresses that attackers can’t "see." And attackers are abusing these systems, which typically aren't properly secured, according to the researchers.

First the client machine gets infected by downloading a Trojan in an email attachment or by visiting a malicious Website. Then the attacker can have a connection "hiding in plain sight," according to the Honeynet Project report. And the proxy can also bypass IDS detection.

The Honeynet Project researchers say they have seen bad guys using this reverse tunnel proxy technique for relaying millions of spam messages worldwide, and that there's even an underground market for proxy abuse and collection. Another benefit for the bad guys: The bots could be mistakenly identified as the source of an attack.

Aside from spam, the reverse tunnel proxy is also being used for executing Web exploits and for targeted attacks, according to the Honeynet Project. The researchers say several criminal networks are currently using this technique. The report also includes mitigation strategies for network providers, including using security tools such as Snort, IPS, blacklisting, restricting outbound email, and adding various security policies.