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ASCII smuggling crosses over from AI prompt injection to phishing evasion
Microsoft details high-volume phishing campaign using ASCII smuggling (Unicode tag chars) for filter evasion, peaking at 2.3M messages.
Microsoft researchers observed a high-volume finance-themed phishing campaign using invisible Unicode tag characters (U+E0000–U+E007F), a technique known from AI prompt injection research as ASCII smuggling, to split lure words like 'funding' and evade email filters. Telemetry from Microsoft Defender for Office 365 showed signature hits jump from roughly 21,000 messages on February 8, 2026 to more than 1.3 million on February 9, peaking above 2.3 million on February 11, with elevated weekday activity lasting approximately three months. The discovery emerged from prompt injection protection research, showing AI-era evasion techniques crossing into traditional phishing. Most messages were flagged by layered Defender protections rather than a single Unicode-specific signal.
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Threat Assessment: Egregor Ransomware
Unit 42 assesses Egregor ransomware, a Sekhmet variant likely run by former Maze affiliates using Qakbot, IcedID, and Ursnif for initial access.
Since September 2020, Unit 42 observed Egregor ransomware attacks across the U.S., Europe, Asia-Pacific, and Latin America, coinciding with the Maze team's shutdown announcement. Egregor, a variant of the Sekhmet family, uses commodity malware such as Qakbot, IcedID, and Ursnif for initial access, followed by scripts that modify firewalls, enable RDP, and deploy Cobalt Strike for reconnaissance and exfiltration. A PowerShell script uninstalls the McAfee agent and downloads the Egregor DLL via BITS, executed with the -passegregor10 key. Victims face a three-day ransom deadline before exfiltrated data is published on the Egregor Hall of Shame leak site.
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Week in review: cPanel vulnerability actively exploited, DigiCert breach, LinkedIn job scams
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14 Trojanized npm Packages Drop RedC2 4.0 Linux Backdoor With AI
Trend Micro found 14 trojanized npm calendar utilities delivering RedC2 4.0, an AI-powered cross-platform backdoor sold for $99.99.
Trend Micro's TrendAI identified 14 functional but trojanized npm packages (streak-*, kit-map-vim, map-streak-kit) that load a bundled Linux implant, the RedShell beacon of RedC2 4.0, without requiring install hooks. RedC2 4.0, sold by Red Offsec for $99.99 and advertised on Hack Forums by actor MarlboroMan in June 2026, offers shell access, credential theft, SOCKS5 proxying, in-memory execution, and an LLM-driven component called Red Agent for natural-language post-exploitation. The framework has evolved from version 2.0 in August 2025 through 4.0, with the Linux beacon introduced in the latest release.
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Threat actors are coming for your AI assets to operationalize their use of AI
Google GTIG reports espionage and crime groups stealing AI models, prompts, and API credentials, plus distillation campaigns and agentic AI attack automation.
Google Threat Intelligence Group's quarterly AI Threat Tracker reports adversaries stealing proprietary models, source code, prompts, and API credentials from government, healthcare, and media targets, including China-based UNC6508 compromising clouds to run unauthorized LLM workloads. Distillation campaigns against Google's models exceeded 100 million prompts launched via thousands of stolen account credentials through proxy networks. Mandiant also observed a financially motivated actor deploy an autonomous multi-agent framework that harvested thousands of third-party credentials in under 6 hours, and a 'Recon' framework on a live C2 server managing over 23,000 stolen credentials including cloud and AI API keys.
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Six Chinese AI firms accused of aggressively copying US frontier models
NSA, CISA, and FBI accuse DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI of industrial-scale distillation of US frontier models via API abuse.
A joint NSA, CISA, and FBI release alleges six Chinese AI firms have extracted capabilities from US frontier models, including Claude, GPT, Gemini, and Grok, since at least late 2024, likely with Chinese government awareness. Tactics include bulk procurement of premium subscriptions with fraudulent accounts, proxy routing to evade geo-restrictions, and prompt injection to force models to reveal hidden chain-of-thought reasoning. Agencies recommend stronger identity verification, monitoring of anomalous usage, and quietly downgrading or adding noise to responses for suspected distillers, while warning these mitigations could frustrate legitimate users.
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⚡ Weekly Recap: Chrome 0-Day, AI Hacking Tools, DDR5 Bit
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China-Based Artificial Intelligence Companies Conducting Industrial-Scale Distillation Campaigns Against U.S. AI Companies
NSA, CISA, and FBI warn DeepSeek, Alibaba, and other Chinese AI firms ran industrial-scale distillation of U.S. frontier models, threatening U.S. AI leadership.
A joint NSA, CISA, and FBI Cybersecurity Advisory (AA26-251A) says China-based firms DeepSeek, Moonshot AI, Alibaba, MiniMax, StepFun, and Z.AI extracted billions of tokens from U.S. frontier models including Claude, GPT, Gemini, and Grok, likely with Chinese government knowledge. Campaigns running since at least late 2024 used native APIs, cloud providers, third-party aggregators, gray-market proxy "transfer stations", and shared premium subscriptions to bypass geographic restrictions, evade safeguards, and violate providers' terms of use. The agencies recommend detecting anomalous prompts, accounts, and usage patterns; subtly altering responses to suspected distillers; and cross-organization intelligence sharing. They also call DeepSeek's publicly cited $5.6M training cost misleading because it excludes data acquired through distillation.
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