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Bitcoin Malware Attack Exploits Russia-Ukraine Crisis

(@mpmcsweeney) | Published on August 27, 2014 at 22:45 GMT

A hacker group is trying to leverage the ongoing conflict between Russia and Ukraine as it distributes malware that is capable of targeting bitcoin wallets.

A report by Bitdefender Labs, a cybersecurity firm that focuses on the digital currency market, highlights how an alleged hacker group disguised one form of malware as another. According to the report, the perpetrators distributed software that they described as capable of disrupting the digital activities of Western governments fighting against Russia.

In reality, the program secretly installs a malware package called Kelihos. This malicious program, first identified nearly five years ago, is capable of stealing the contents of a user’s bitcoin wallets, among other negative effects.

Notably, the most recent attack targeted Ukrainian Internet users disproportionately, accounting for roughly 40% of those impacted. In a statement, Bitdefender analyst Doina Cosovan explained:

“Some of the IPs might indicate the origin of servers specialized in malware distribution or other infected computers that became part of the Kelihos botnet. As most of the infected IPs are from Ukraine, this either means that computers in the country were also infected, or that Ukraine itself is home to the main distribution servers.”

Beyond bitcoin theft, the Kelihos malware is capable of enslaving a host computer to a global botnet, allowing a hacker to use that machine to distribute spam, scan data or even continue the spread of the malicious software.

Masked as nationalist initiative

Bitdefender indicated that the hackers tried to pass off their “software” as a way for affected users to create problems for the Russian government. Notably, the message accompanying the malware claimed that the hacker group was located inside Russia itself.

The message read:

“We, a group of hackers from the Russian Federation, are worried about the unreasonable sanctions that Western states imposed against our country. We have coded our answer and bellow [sic] you will find the link to our program. Run the application on your computer, and it will secretly begin to attack government agencies of the states that have adopted those sanctions.”

As Bitdefender explained, the message included a link that downloads the Kelihos program – and with it, the capability for the hackers to begin seizing control of the computer.

Malware threat still exists

Despite improvements in the ways that people can store their digital currency, the threat of malware attacks targeting bitcoin balances remains.

Recent reports suggest that attempts to steal bitcoin are growing more common. As noted by Kaspersky Labs, 22% of malware attacks related to finance targeted bitcoin. Malware attempts have been disguised in a number of ways, including wallpaper apps on the Google Play store.

The malware problem has attracted the attention of government officials and financial regulators, and often forms the basis for consumer and investor warnings on the topic of digital currency.

Agencies such as the US Consumer Financial Protection Bureau and the Securities Exchange Commission have weighed in on the issue. Overall, the malware problem is cited as a key reason for users to be wary of digital currency.

Image credit: a katz / Shutterstock.com

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