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Authorities Turn Sality's P2P Network Against Itself, Cutting Off New Malware Payloads
US and European authorities with CrowdStrike dismantled the two-decade-old Sality P2P botnet using peer-list manipulation, blocking payload delivery to infected hosts.
The US Department of Justice announced a coordinated takedown of the Sality peer-to-peer botnet, executed August 31, 2026 by authorities from the US, Bulgaria, Hungary, and Romania with CrowdStrike and the Shadowserver Foundation. Sality, active since 2003, infects Windows executables and delivers payloads including the EggJagger crypto clipper, which stole at least $150,000, and was used for DDoS campaigns. The operation abused the botnet's peer-list maintenance cycle to insert sinkhole nodes and isolate both super peers and NAT-hidden infections, cutting off URL and payload distribution to more than 15,000 infected machines across two P2P networks.
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ThreatsDay: 296K IoT Botnet, 100+ Water Systems Targeted, SharePoint RCE Chain + 27 New Stories
Weekly ThreatsDay bulletin details a ShinyHunters-style social engineering hit on ReliaQuest, the 296,000-device Dysphoria IoT botnet, and several new malware families.
ReliaQuest confirmed a social engineering attack on August 22, 2026, in which an attacker used a fake SSO page and MFA push approval to gain brief view-only access to an identity dashboard, with tactics matching ShinyHunters, which has since listed the firm on its leak portal. The Shadowserver Foundation reported the Dysphoria botnet has compromised nearly 296,000 IoT devices for DDoS attacks and recently added residential proxy capability. Cisco Talos documented JWR, an operator-driven phishing-as-a-service framework linked to The Outsider that harvests credentials, identity documents, and 2FA codes over an encrypted WebSocket. New malware coverage includes the Octagon Android fraud bot ($1,400/month), the C2Looper Rust backdoor delivered via ClickFix, and the Aeternum loader that moved C2 to the Polygon blockchain.
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Open VSX Removes 77 Malicious Evil Twin Extensions Exfiltrating Developer Data
77 malicious 'evil twin' Open VSX extensions impersonated developer tools and exfiltrated hostnames and detailed workspace reconnaissance to mangorbit.com.
Manifold Security found 77 extensions uploaded to the Open VSX marketplace between July 26 and August 1, 2026 that impersonate real Microsoft VS Code Marketplace tools, with all 77 sending data to mangorbit.com. 58 lightweight variants exfiltrate the hostname, while 19 recon variants collect editor details, OS username, Git remote hosts, CI environment variables (GitHub, GitLab, Azure DevOps, Buildkite, CircleCI, Codespaces, Gitpod), and installed extension IDs. The recon variant retries for up to seven days and can fall back to a DNS TXT record for exfiltration if the primary domain is blocked. The extensions were removed from Open VSX by August 3, 2026; the disclosure follows a separate npm supply chain campaign, ChainDrop, which compromised 450 packages with a Shai-Hulud worm variant.
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Muhstik Botnet Attacks Tomato Routers to Harvest New IoT Devices
Unit 42 found a Muhstik botnet variant brute-forcing Tomato router web authentication to harvest IoT devices for crypto mining and DDoS attacks.
Palo Alto Networks Unit 42 researchers in December 2019 identified a new Muhstik botnet variant scanning Tomato routers on TCP 8080 and brute-forcing default admin credentials, targeting roughly 4,600 exposed devices found via Shodan. The variant also scans WordPress and Webuzo installations and exploits the Oracle WebLogic deserialization flaw CVE-2019-2725 for unauthenticated remote code execution. Muhstik, active since March 2018, self-propagates like a worm and typically monetizes infections through cryptocurrency mining and DDoS attacks controlled via an IRC C2 channel.
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Almost Half of Malware Samples Communicate Direct to IP
Unit 42 analysis of 4 million malware reports finds 45% of C2-active samples connect directly to hard-coded IPs, bypassing DNS defenses.
Palo Alto Unit 42 analyzed over 4 million Advanced WildFire dynamic analysis reports and found that 45.32% of malware samples with C2 activity made at least one direct-to-IP connection, accounting for 23.17% of all C2 connection attempts. The firm proposes zero trust IP (ZT-IP), an enforcement approach that verifies whether outbound destinations were ever sanctioned by a DNS response. ZT-IP analysis surfaced Phorpiex ransomware droppers fetching payloads directly from C2 IPs, a persistent data exfiltration campaign using an obfuscated \GET protocol, and Mozi P2P botnet payloads delivered to IoT devices without DNS. Only 1% of benign samples connected directly to untrusted IP addresses.
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Tracking Shai-Hulud: Inside the ChainDrop NPM Worm
ChainDrop, a Mini Shai-Hulud variant tied to TeamPCP, worms through npm via a compromised maintainer account and anchors C2 in an Ethereum smart contract.
On August 4, 2026, the self-propagating ChainDrop worm entered the npm ecosystem through a compromised maintainer account, poisoning packages including keyv, cacheable, and flat-cache. ChainDrop is a variant of Mini Shai-Hulud linked to the actor TeamPCP. It anchors its C2 infrastructure in an Ethereum smart contract, allowing domain rotation with a single blockchain transaction and defeating domain-based blocklists. The compromised keyv maintainer's GitHub account caused the project's own GitHub Actions release pipeline to publish malicious package versions.
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