Sophos Uncovers Novel Ransomware TTPs: New LockFile Ransomware Uses Intermittent File Encryption to Avoid Detection

Sophos, a global leader in next-generation cybersecurity, has published new research, “LockFile Ransomware’s Box of Tricks: Intermittent Encryption and Evasion,” that reveals how the operators behind LockFile ransomware encrypt alternate bundles of 16 bytes in a document to evade detection. According to Sophos researchers, this novel approach, which Sophos is calling “intermittent encryption,” helps the ransomware to avoid triggering a red flag because the new encryption method looks statistically very similar to the unencrypted original. This is the first time that Sophos researchers have seen this approach used in ransomware.

“Partial encryption is generally used by ransomware operators to speed up the encryption process and we’ve seen BlackMatter, DarkSide and LockBit 2.0 ransomware implement this technique,” said Mark Loman, director of engineering at Sophos. “What sets LockFile apart is that, unlike the others, it doesn’t encrypt the first few blocks. Instead, LockFile encrypts every other 16 bytes of a document. This means that a file such as a text document remains partially readable and looks statistically like the original. This trick can be successful against ransomware detection software that relies on inspecting content using statistical analysis to detect encryption.

“LockFile ransomware has seemingly emerged out of nowhere and the operators behind it haven’t hesitated to exploit newly published and patched vulnerabilities – from the ProxyShell bugs to the recently published PetitPotam proof-of-concept. They also appear eager to leverage their novel approach of intermittently encrypting files to ensure their attacks work. The message here for defenders is that the cyberthreat landscape never stands still, and adversaries will quickly seize every possible opportunity or tool to launch a successful attack. Security is about being ready for and resilient against tomorrow’s attacks. This requires deep, intelligent technologies and human detection and response.”

The following visual comparison (the axis represent byte by text character distribution) shows the same text document encrypted by DarkSide and LockFile: 
 

Other key findings detailed in the new Sophos research include:

• LockFile ransomware uses a relatively uncommon process known as “memory mapped input/output (I/O)” to encrypt a file. This technique allows the ransomware to invisibly encrypt documents that are cached in the computer’s memory, without creating additional input/output telematic traffic that detection technologies will spot. This technique has also been used by WastedLocker and Maze ransomware
• In line with other human-directed ransomware, LockFile doesn’t need to connect to a command-and-control center to communicate. This reduces traffic and helps to keep the attack activity under the detection radar for as long as possible. Once the ransomware has encrypted all the documents on the machine, it deletes itself. This means that, after the attack, there is no ransomware binary for incident responders or endpoint protection software to find or cleanup
• As an additional evasion technique, Lockfile avoids encrypting some 800 different filetypes by extension, further confusing certain anti-ransomware protections

Sophos recommends the following best practices to help defend against LockFile and other types of ransomware, and related cyber-attacks:

• At a strategic level: 
  • Deploy layered protection. As more ransomware attacks also involve extortion, it is more important than ever to keep adversaries out in the first place. Use layered protection to block attackers at as many points as possible across an estate
  • Combine human experts and anti-ransomware technology. The key to stopping ransomware is defense-in-depth that combines dedicated anti-ransomware technology and human-led threat hunting. Technology provides the scale and automation an organization needs, while human experts are best able to detect the tell-tale tactics, techniques and procedures that indicate an attacker is attempting to get into the environment. If organizations don’t have the skills in house, they should enlist support from cybersecurity specialists
• At a day-to-day tactical level:
  • Monitor and respond to alerts – Ensure the appropriate tools, processes, and resources (people) are available to monitor, investigate and respond to threats seen in the environment. Ransomware attackers often time their strike during off-peak hours, at weekends or during the holidays, on the assumption that few or no staff are watching
  • Set and enforce strong passwords – Strong passwords serve as one of the first lines of defense. Passwords should be unique or complex and never re-used. This is easier to do if you provide staff with a password manager that can store their credentials
  • Use Multi Factor Authentication (MFA) – Even strong passwords can be compromised. Any form of multifactor authentication is better than none for securing access to critical resources such as e-mail, remote management tools, and network assets
  • Lock down accessible services – Perform scans of your organization's network from the outside and identify and lock down the ports commonly used by VNC, RDP, or other remote access tools. If a machine needs to be reachable using a remote management tool, put that tool behind a VPN or zero-trust network access solution that uses MFA as part of its login
  • Practice segmentation and zero-trust – Separate critical servers from each other and from workstations by putting them into separate VLANs as you work towards a zero-trust network model
  • Make offline backups of information and applications – Keep backups up to date and keep a copy offline
  • Inventory your assets and accounts – Unprotected and unpatched devices in the network increase risk and create a situation where malicious activities could pass unnoticed. It is vital to have a current inventory of all connected computers and IOT devices. Use network scans and physical checks to locate and catalog them
  • Make sure security products are correctly configure – Under-protected systems and devices are vulnerable too. It is important that you ensure security solutions are configured properly and to check and, where necessary, update security policies regularly. New security features are not always enabled automatically
  • Audit Active Directory (AD) – Conduct regular audits on all accounts in AD, ensuring that none have more access than is needed for their purpose. Disable accounts for departing employees as soon as they leave the company
  • Patch everything - Keep Windows and other software up to date. This also means double checking that patches have been installed correctly and, in particular, are in place for critical systems like internet-facing machines or domain controllers

Sophos security solutions, such Sophos Firewall and Intercept X, protect users by detecting malicious activity and the actions and behaviors of ransomware and other attacks. The act of attempting to encrypt files is blocked by Intercept X’s CryptoGuard feature, and customers running properly configured Intercept X products are protected against this novel ransomware.

To learn more, please read the LockFile article on SophosLabs Uncut.