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Mustang Panda Upgrades CoolClient With a Kernel Rootkit
Mustang Panda's updated CoolClient backdoor deploys a signed kernel driver to hide processes, files and network activity in Asian intrusions.
Kaspersky analysis shows Mustang Panda (HoneyMyte) upgraded its CoolClient espionage backdoor with a signed kernel-mode driver installed as a Windows service, communicating via IOCTL requests to hide processes, files and registry entries. In a Myanmar campaign the actor deployed PlugX first, then CoolClient via a fake Windows Defender directory and Sangfor defender.exe DLL sideloading, with scheduled task and AutoRun persistence and UAC bypass. The updated variant was observed in intrusions across Pakistan, Mongolia and Myanmar, with victims also in Russia including confirmed government entities.
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Mustang Panda Adds Signed Windows Rootkit to CoolClient Backdoor for Stealth
Kaspersky reports Mustang Panda's updated CoolClient backdoor now deploys a signed kernel-mode Windows rootkit, hitting government victims in Myanmar, Mongolia, Pakistan, and Russia.
Kaspersky identified a new CoolClient variant attributed to HoneyMyte (Mustang Panda) that installs a digitally signed Windows kernel driver, msagent.sys, to hide and protect malicious processes, files, registry keys, and C2 network information. CoolClient is consistently deployed as a secondary backdoor after PlugX, with confirmed victims including government entities in Myanmar, Mongolia, Pakistan, and Russia. In a Myanmar campaign, PlugX was used to deploy CoolClient via a renamed Sangfor executable for DLL side-loading, a scheduled task for persistence, and RPC-based process creation with PPID spoofing. The driver, signed with a 2013 certificate issued to Nanjing Ranyi Technology, implements 33 IOCTL handlers, process hiding via unlinking, a filesystem minifilter, and registry callbacks.
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Hackers Turn Windows Shadow Copies Into a Tool for Credential Theft and Ransomware
Attackers abuse Windows VSS shadow copies to delete recovery points before ransomware and to extract NTDS.dit/SAM credentials, demanding context-aware detection.
Threat actors are weaponizing the Volume Shadow Copy Service (VSS) for two purposes: destroying local recovery points via vssadmin.exe, wmic.exe, diskshadow.exe, wbadmin.exe, and bcdedit.exe before encryption, and accessing static copies of locked files such as NTDS.dit and SAM for credential theft. Ransomware families tied to shadow-copy removal include Akira, Black Basta, BlackCat, Conti, LockBit, Qilin, RansomHub, REvil, Ryuk, and WannaCry. Huntress's analysis of the Nightmare-Eclipse tool showed the BlueHammer technique chaining a Windows Defender timing issue with a VSS snapshot to dump the SAM database and decrypt NT hashes. Defenders should correlate VSS operations with parent process, hive access, and subsequent encryption activity, and maintain immutable off-host backups.
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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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