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Iranian Spies Target Saudi Arabia in "Magic Hound" Attacks

Iranian cyber espionage

A cyber espionage operation linked to Iran and the recent Shamoon 2 attacks has targeted several organizations in the Middle East, particularly in Saudi Arabia.

Researchers at Palo Alto Networks have been monitoring the campaign, which dates back to at least mid-2016. Dubbed “Magic Hound,” the operation has been aimed at energy, government and technology sector organizations that are located or have an interest in Saudi Arabia.

The threat actor behind Magic Hound has used a wide range of custom tools and an open-source cross-platform remote access tool (RAT) named Pupy. While Palo Alto Networks has not attributed these attacks to any country, researchers at SecureWorks have also analyzed the campaign and they believe it is related to an actor which they track as COBALT GYPSY. SecureWorks is highly confident that COBALT GYPSY is associated with the Iranian government.

The Magic Hound attacks started with specially crafted macro-enabled Word and Excel documents set up to fetch additional tools using PowerShell. The malicious files appear to be holiday greeting cards, job offers, and official government documents from the Ministry of Health and the Ministry of Commerce in Saudi Arabia.

The threat actor has used different types of custom tools to achieve its goals, including droppers, downloaders, executable loaders, document loaders and IRC bots. One of the payloads they delivered was the Python-based Pupy RAT.

It’s worth noting that some of the domains used in this attack and a link to the Pupy RAT were also uncovered by IBM X-Force researchers while trying to determine the initial entry point in the recent Shamoon 2 attacks. The initial breach vector, involving macro-enabled documents and PowerShell, is also similar.

Palo Alto Networks has found connections between the Magic Hound attacks and the Iran-linked threat group known as Rocket Kitten, which has targeted organizations in the Middle East and NATO countries. Furthermore, an IRC bot used in the Magic Hound campaign is very similar to a piece of malware used by Newscaster, aka Charming Kitten and NewsBeef, an Iranian actor known to target individuals in the U.S., Israel and other countries using fake social media personas.

The Charming Kitten and Rocket Kitten groups were also referenced recently in an analysis of MacDownloader, a piece of malware used by Iranian actors to steal data from Mac computers.

Related: Iranian Group Delivers Malware via Fake Oxford University Sites

Related: Iran-Linked Attackers Target Government Organizations

Related: "Gaza Cybergang" Attacks Attributed to Hamas

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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.