As we discussed in the Introduction to the Network-based Malware Detection series, traditional approaches to detecting malware cannot protect us any more. With rapidly morphing executables, increasingly sophisticated targeting, zero-day attacks, and innovative cloaking techniques, matching a file to a known bad AV signature is simply inadequate as a detection mechanism. We need to think differently about how to detect these attacks, so our next step is to dig into each of these specific tactics to figure out exactly what a file is doing and determining whether it’s bad.

Sandboxing and Evolving Heuristics

We are talking about network-based malware detection, so we will assume you see all the streams coming into your network from the big bad Internet. Of course this depends on architecture, but let’s assume it for now. With visibility into all the ingress traffic, the perimeter device can re-assemble the files from these streams and analyze them. There are two main types of file-based analysis: static and dynamic. Static testing is basically taking a look at the file and looking for markers that indicate malware. This generally involves looking for a file hash which indicates a known bad file – effectively a signature – which may identify a file packer and function calls that indicate badness.

Of course network-based static testing provides limited analysis (and we wouldn’t want to bet on its findings) – especially given that modern malware writers encrypt and otherwise obscure what their files do. Which means you really need dynamic analysis: actually executing the file to see what it does. Yes, this is playing with live ammo – you need proper precautions (or to make sure your device includes them).

Dynamic analysis effectively spins up an isolated, vulnerable virtualized system (the proverbial sandbox) to host and execute the file; then you can observe its device and network impact. Clear indications of badness include configuration changes, registry tampering, installing other executables, buffer overflows, memory corruption, and a zillion other bad things malware can do. Based on this analysis, the perimeter gateway flags files as bad and blocks them.

Given the real-time nature of network security, it not feasible to have a human review all dynamic analysis results, so you are dependent on the detection algorithms and heuristics to identify malware. The good news is that these capabilities are improving and reducing false positives. But innovative malware attacks (including zero-days) are not caught by perimeter gateways – at least not the first time – which is why multiple layers of defense still make a lot of sense.

What’s the catch? Clearly sandbox analysis is less effective for advanced malware which is VM-aware. The malware writers aren’t dummies, so they now check whether the OS is running in a virtual environment and mask accordingly – typically going dormant. Obviously this isn’t the primary driver for virtualized desktops, but it is another upside to consider.

Network analysis

Another aspect of dynamic malware analysis is profiling how the malware leverages the network. Remember back to the Securosis data breach triangle: without exfiltration there is no breach. Any malware must rely on the network, both to get commands from the mother ship and to exfiltrate the data. So the sandbox analysis tracks what networks the malware communicates with as another indication of badness.

But how can these network-based devices keep track of the millions of domains and billions of IP addresses which might be command and control targets? The good news is that we have seen this movie before. Reputation analysis has evolved to track these bad IP addresses and networks. The first incarnation of reputation data was URL blacklists maintained by web filtering gateways. That evolved to analysis of IP addresses, predominately to identify compromised mail relays for anti-spam purposes.

Now that model been has extended to analyzing DNS traffic to isolate command and control (C&C) networks as they emerge. Malware writers constantly test malware and new obfuscation approaches for their C&C traffic. Similar heuristic approaches can identify emerging C&C targets by analyzing DNS requests, exfiltration attempts, and network traffic. For example, if an IP address is the target of traffic that looks an awful lot like C&C traffic, perhaps it’s an emerging bot master. It’s not brain surgery, and this type of analysis is increasingly common for network security gateway vendors. Obviously, to keep current, any vendor providing this kind of botnet tracking needs access to a huge amount of Internet traffic. So if your vendor claims to track botnets, be sure to investigate how they track C&C networks and substantiate their claims.

Why is isolating C&C traffic important? It all gets back to the detection window. Even with network-based malware gateways, you will miss malware on the way in. So devices will still be compromised, but obfuscated communications to known C&C targets are a strong indication of pwned devices. This may not be definitive, but it’s an excellent place to start, and a strong signal to work from.

Outside of C&C traffic, analyzing the network characteristics of malware also provides insight into proliferation. How does the malware perform reconnaissance and subsequently spread? What kind of devices does it target? We are discussing this analysis in great detail in our Malware Analysis Quant research, and of course network-based analysis is inherently limited, but it is worth mentioning (again) the wealth of information you can get from file-based malware analysis.

Wherefore art thou, malware?

The ultimate goal of any malware analysis is to be able to profile a malware file and then block it when it shows up again. That’s what AV did in the early days, and what your malware detection defense must continue to do. So that’s the what, but not necessarily the where. When designing your security architecture you need to determine the best place to look for these malware files. Is it on the devices, within content security gateways (web/email), on the network perimeter, or even in the cloud? Of course this isn’t an either/or question, but there are pros and cons to each approach. We’ll tackle where to look for malware next.