Mystery Malware Destroys 600,000 Routers in 72 Hours: Why Encryption Alone Won't Save Your IoT

Introduction

Remember when good security in the network relied mainly on having strong passwords, network segmentation and encryption? Ah, the good old days. Last October, malware destroyed 600,000 routers from a single ISP in 72 hours, showing us that our old ways just don't cut it anymore. Encryption is vital, sure, but it’s like bringing a knife to a cyber gunfight.

At qomodo, we're taking XIoT security to the next level—because your IoT devices deserve better. In this blog, we’ll quickly dive into what happened with this malware attack thanks to a recent analysis from Lumen Technologies, why you need to rethink your security strategies when creating devices, especially if you're a product manager at an OEM or IoT developer, and how host-based detection and hardening could have mitigated the damage.

The Incident: 600,000 Routers Down in 72 Hours

The Attack Overview

In late October 2023, there was a large and growing number of complaints on public internet forums and outage detectors. By October 25th, it became clear that users of two specific ActionTec models, the T3200s and T3260s, were experiencing widespread internet outages. Reports indicated these routers displayed a static red light, and customer support centres informed users that the entire unit needed replacement.

Technical Details of the Attack

The Pumpkin Eclipse analysis provided key insights into the technical aspects of the attack:

Firmware Exploitation: The malware exploited vulnerabilities in the router firmware, bypassing encryption mechanisms.
Command and Control (C2): The malware used sophisticated C2 servers to coordinate the attack, making detection difficult for network-based analysis alone.
Destructive Payload: Once the routers were compromised, the malware deployed a destructive payload that bricked the devices, rendering them inoperable.
Propagation Method: The malware spread rapidly through the network by exploiting a known vulnerability in the TR-069 (CWMP) protocol used by the routers for remote management.

To validate their findings, Black Lotus Labs queried the scan data repository Censys for “ActionTec” on October 27. They analyzed the top service providers by Autonomous System Number (ASN) based on device count. Their week-long snapshot analysis revealed a 49% drop in the number of exposed devices for one specific ASN. Comparing banner hashes from October 27 to October 28, they observed a reduction of approximately 179,000 IP addresses with ActionTec banners. This also included a drop of around 480,000 Sagemcom devices, likely the Sagemcom F5380, which were issued by the same ISP.

Encryption Isn't Enough

While encryption is critical, it’s not the silver bullet we once thought it was. This attack is a vivd reminder that simply encrypting data doesn’t stop malware from wreaking havoc. Here’s why you should care:

Attack Surface: Encrypted data in transit is safe, but what about the device itself? Malware can still infiltrate and destroy hardware or firmware.
Complex Threats: Modern malware is sophisticated, often bypassing traditional encryption mechanisms and targeting system vulnerabilities.

Why IoT Needs More Than Just Encryption

The Convergence of OT and IT

Operational Technology (OT) and Information Technology (IT) are merging. The industrial devices you work on today need the same robust security protocols as corporate networks. Unfortunately, the mindset hasn’t fully shifted, but we are seeing a change.

Behavioural Profiling: A New Approach

At qomodo, we profile system-level behaviour using AI and machine learning. This includes detecting threats or suspicious activity such as hardware tampering, suspicious log-on activity, malicious network behaviour, and compromised files or memory tampering. It’s about catching threats before they cause damage.

Hardware Tampering: Identifying unauthorized modifications to devices, insertion of storage devices or removal of cellular capabilities.
Suspicious Log-on Activity: Monitoring unusual access patterns to prevent breaches.
Malicious Network Activity: Detecting anomalies in data flow that indicate potentially suspicious activity or even misconfiguration.
Compromised Files and Memory Tampering: Ensuring the integrity of system files and memory.

How Host-Based Detection and Prevention Could Have Helped

Understanding Host-Based Security

Host-based detection and prevention systems (HIDS/HIPS) monitor and analyze the internals of a computing system to detect and prevent attacks.

System Integrity Checks: Regularly verifying the integrity of system files and configurations can detect unauthorized changes early.
Behavioural Analysis: Analysing the behaviour of applications and network traffic to identify anomalies.
Intrusion Prevention: Blocking suspicious activities before they cause harm.

Hardening Your IoT Devices

Hardening involves strengthening the security of your systems to reduce vulnerabilities.

Firmware Updates: Regularly update firmware to patch known vulnerabilities.
Least Privilege Principle: Limit user and application privileges to only what is necessary.
Secure Boot: Ensure devices boot only trusted software by using cryptographic checks.

Case Study: Lessons from the 600,000 Router Incident

Understanding the Attack Vector

The malware in question likely exploited firmware vulnerabilities—bypassing encryption entirely. This demonstrates a crucial point: securing data in transit is not enough if the endpoint itself is compromised.

Implementing Comprehensive Security

To protect your IoT devices, you need to implement comprehensive security measures:

Multi-Layered Defense: Combine encryption with behavioural analysis and intrusion detection systems.
Regular Firmware Updates: Ensure all devices run the latest firmware to patch known vulnerabilities.
Endpoint Protection: Use embedded software agents to monitor and protect devices at the system level.

What is the cost of not doing anything?

Imagine facing a staggering (approx.) $200 million expense to roll out and then replace 600,000 routers mostly across the US, with $100 million for the initial rollout and another $85+ million for replacements and engineering costs—this highlights the significant costs involved in maintaining robust cyber resilience, without even accounting for the downtime experienced by businesses and customers.

The Future of IoT Security

Shifting Perspectives

It’s time to move beyond the outdated notion that encryption and password settings alone can secure IoT devices. As product managers and developers, we believe your role in shaping the future of IoT security is crucial, and we are here to make that easy. By adopting advanced security measures, you can protect your devices and, ultimately, your customers.

Our Vision at qomodo

At qomodo, we’re pioneering the next generation of IoT security. Our embedded software agents provide comprehensive universal protection utilising machine learning, ensuring that your devices are safe from the inside out. Because when it comes to security, it’s not just about what you do—it's about doing it right.

We may never be able to be one step ahead of threat actors, but with the right measures, we can significantly reduce business risk and put our best foot forward.

Contact us to find out more!