Security Experts:

CryptoWall 3.0 Uses I2P Anonymity Network For C&C Communications

Version 3.0 of the notorious file-encrypting ransomware CryptoWall has been spotted by researchers.

Almost two months have passed since the developers of CryptoWall released an updated version of the threat, but now they’re back to work. The malware, distributed via spam and malvertising campaigns, helped cybercriminals make a lot of money last year so it’s not surprising that its authors continue improving it.

According to Microsoft, which detects the threat as Win32/Crowti, there aren’t any major differences between CryptoWall 3.0 and the previous variant. The malware exhibits the same behavior and the instructions on how to recover the files are still only accessible over the Tor anonymity network. The company noted, however, that the names of the files containing the ransom demand have been changed to “HELP_DECRYPT.”

On January 12, Microsoft identified 288 unique devices infected with the latest version of the threat. Victims of the ransomware are given 168 hours (7 days) to pay $500 in Bitcoins if they want to recover their files. After the 7-day deadline, the amount increases to $1,000.

The French researcher who uses the online moniker Kafeine has also analyzed CryptoWall 3.0. The expert says the threat’s command and control (C&C) communications are encoded with the RC4 cipher.

An interesting feature of CryptoWall 3.0 is the use of I2P (Invisible Internet Project) for C&C communications. I2P is an anonymity network that is similar to Tor, but there are some important differences between the two.

“The two primary differences between Tor / Onion-Routing and I2P are related to differences in the threat model and the out-proxy design (though Tor supports hidden services as well). In addition, Tor takes the directory-based approach - providing a centralized point to manage the overall 'view' of the network, as well as gather and report statistics, as opposed to I2P's distributed network database and peer selection,” the I2P Project explains on its website.

A recently launched online drug bazaar called Silk Road Reloaded uses I2P to protect its infrastructure and the identity of its customers.

According to Kafeine, CryptoWall 3.0 is the first CryptoWall variant that uses I2P. The researcher told SecurityWeek that the malware developers seem to be chaining Tor and I2P for the file decryption services.

Sources told SecurityWeek that the computers of a government organization in Romania have been infected with the new CryptoWall. A large number of important documents have been encrypted as a result of the infection.

Researchers at Cisco have conducted an in-depth analysis of CryptoWall 2.0 and determined that the threat is capable of executing 64-bit code directly from its 32-bit dropper.

Crypto-ransomware is the “weapon” of choice for many cybercriminals. Trend Micro reported earlier this week that the TorrentLocker ransomware had helped cybercriminals make 810 BTC ($220,000) in a single month last year.

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Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.