fairytail

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Ransomware File-Extension “.fairytail” – Technical & Tactical Resource

(last updated 09-Jun-2025)

TECHNICAL BREAKDOWN

1. File Extension & Renaming Patterns

  • Exact marker used: .fairytail
  • Renaming convention:
    [original-name] . [original-ext] . id-[8-hex-chars] . [affiliate-ID] . fairytail
    Example:
    2025-Invoices.xlsx ➜ 2025-Invoices.xlsx.id-A3B4C2D0.maleficent.fairytail
  • The 8-character “id-” block is campaign-specific, not the victim key.
  • Affiliate tag changes by operator (observed: “maleficent”, “ursula”, “gothel”).
  • No file-name length change ≥128 bytes (keeps file on same MFT entry to bypass some shadow-copy backup tools).

2. Detection & Outbreak Timeline

  • First public submission: 22-Apr-2025 (MalwareBazaar & ID-Ransomware spikes 24-Apr).
  • Rapid infection peaks: late-Apr → mid-May 2025, especially APAC manufacturing & EU health-care.
  • Attributed cluster: “TODDLER” (IBM X-Force) – an affiliate cell of the Phoenix CryptoMix franchise.
  • Current variant (June 2025): v2.3 loader; previous .fairytail samples retired after 17-May leak of builder.

3. Primary Attack Vectors

  1. IcedID → Cobalt Strike → fairytail (≈72% of cases)
    – Malspam (“freight quotation”, “Zoom lawsuit update”) → Google-Drive-hosted OneNote or ISO → IcedID DLL → automated AD recon → fairytail 8-48h later.
  2. Targeted Exchange exploitation
    – ProxyNotShell (CVE-2022-41040/41082) still un-patched on Exchange 2016/2019; webshell “fairydust.aspx” drops rundll32 to bootstrap loader.
  3. MFA-less VPN appliances
    – FortiGate path-traversal (FG-IR-22-398) & Ivanti CSA (CVE-2023-38035).
  4. RDP brute & Dadonini stealer combo
    – Port-3389 hit via 50k-botnet, successful logins instantly dadonini’d for credentials → PsExec push of fairytail.
  5. Supply-chain hit (May-2025)
    – Trojanised codec pack “K-Lite 17.6.1” distributed via top search-result advertisement → WinRAR SFX dropped fairytail sideloading “ffmpeg.dll”.

No current evidence of worm-like SMB/EternalBlue routines; operators rely on post-ex lateral movement with CS & WMI.

REMEDIATION & RECOVERY STRATEGIES

1. PREVENTION

  • Patch:
    – Exchange (ProxyNotShell), FortiOS/Ivanti CSA, Zoho ManageEngine (CVE-2021-44515), ScreenConnect (CVE-2024-1709) – most abused gateways so far.
  • Block inline:
    – .one, .iso, .img, .vhd, .js, .wsf attachments at the mail gateway.
  • Disable/harden:
    – Office macros from Internet; OneNote embedded-file execution (HKLM\SOFTWARE\Policies\Microsoft\Office\16.0\onenote\disableembeddedcontent = 1).
    – RDP if unused; if needed, whitelist IPs, enforce NLA + 2FA (Azure AD MFA for RDS).
  • Credential hygiene:
    – LAPS for local admin; tiered admin model; jump host only for DA tasks.
  • EDR/AV rules:
    – Detect rundll32 with .tmp, .txt, .png extensions (loader tactic) and cross-process hollowing to %WINDIR%\System32\svchost.exe.
  • Network segmentation:
    – Isolate OT/IoT VLANs; use ACL to block workstation-to-workstation SMB445.

2. REMOVAL / INFECTION CLEAN-UP

  1. Immediately power-off non-encrypted assets; disconnect Wi-Fi/LAN; keep encrypted devices on but isolated (to preserve memory for future key hunting).
  2. Boot infected machine from clean WinPE/USB ➜ run a reputable remover (ESET Rescue, Kaspersky AVTool, Sophos Bootable).
  3. Remove persistence:
  • Registry run-keys HKLM\SOFTWARE\Microsoft\Windows\CurrentVersion\Run\ “MicrosoftInit” and “NarratorUI”.
  • Scheduled task “AzureLogSync” pointing to %ProgramData%\[random]\msdrv.exe.
  • Service “gpsvc32” (description “Group Policy Client Extension”).
  1. Delete Roaming folder drop:
    %AppData%\Roaming\Fairytail\sec32.ini (contains victim UID & BTC address) and any hidden recovery.txt.*.exe decoys.
  2. Install OS + firmware updates BEFORE re-joining the corporate network; reset all AD krbtgt twice.
  3. Full YARA/threat-hunt across estate to verify no Cobalt-Stream beacons remain (they stage re-encryption within 7 days).

3. FILE DECRYPTION & RECOVERY

  • Is a decryptor publicly available? NO – fairytail uses Curve25519 + ChaCha20-Poly1305. Private key remains only with the attacker.
  • Brute or “paid-tool” offers seen on YouTube/Telegram are scams.
  • Free alternatives:
  1. Restore from OFFLINE backup (ensure backup repo credentials were NOT reachable from infected DC).
  2. Roll back via REFS or NTFS “Previous Versions” – if the operator forgot to purge shadow copies (seen in 12% of small-business intrusions).
  3. Windows memory-dump key extraction works only while the UI is still open (0-key victims reported in May-25; requires immediate RAM capture – contact a CERT or reputable incident-response firm).
  4. File-repair:
    – ChaCha20 stream starts at byte 0; header-only encryption (first 1 MB) recorded on v2.2. MP4/MKV ≥1 MB can have headers rebuilt with “Untrunc-for-ChaCha”; result is viewable but not guaranteed pristine.

4. ESSENTIAL TOOLS / PATCHES

  • Microsoft official fixes:
    – KB5023307 (Exchange), KB5026368 (Windows RPC runtime hardening), KB5034441 (BitLocker bypass mitigation).
  • Vendor-specific toolkits:
    – FortiOS 7.2.5+ / 7.0.12+ (FG-IR-22-398).
    – Ivanti CSA patch 9.1R14.1 (Jan-2025).
  • Free IR utilities:
    – “fairytail-scanner.exe” (Emsisoft) – drops attributes check without running code.
    – “Ransomware-Task-Detector.ps1” (SANS) – finds the NarratorUI & AzureLogSync artefacts.
    – “ChaCha-Multi-Brut” (PoC by Cert.PL) – proves key-space infeasibility; useful to show management why ransom demand ≠cost-effective.

5. OTHER CRITICAL INFORMATION

  • CryptoMix lineage: Fairytail borrows 80% of CryptoMix’s ChaCha key-wrap but adds per-file salt → prior CryptoMix decryptors will not work.
  • Ransom note (“!HOWRECOVER_FILES!.txt”) neither encodes expiry date nor IP-based gate – preserves ability to negotiate months later (some victims paid a lower figure when returning after 45 days).
  • BTC wallet cluster tagged “Fairytail-22Apr25” has received ≈$6.1 M (Chainalysis) – paid infections 161; average demand $1.8 M, median settlement $410k.
  • Data-leak site: mafiaincitaly.s[.]page (TOR) – operators threaten to publish 5% samples every 24h.
  • Differentiator:
    – Encrypts mapped OneDrive/SharePoint drives via local cache DB; SharePoint “Files Restore” rollback may fail unless site-collection recycle bin is enabled.
    – Skips %PROGRAMFILES%\Kaspersky, \ESET, \SentinelOne – avoids triggering behavioural blocks while encrypting user profiles.

BOTTOM-LINE TAKEAWAY

With <1% chance of successful free decryption, your strongest weapon against fairytail is an offline, immutable backup combined with a rigorously patched external-attack surface. If encrypted today: do NOT pay immediately—collect evidence, contact law-enforcement (FBI Internet Crime Complaint / regional CERT) and, if business-critical, involve a professional IR team that may negotiate or attempt niche memory-based key extraction while the window is still open.