fairytale

[Content by Gemini 2.5]

Ransomware Brief: “Fairytale” (a.k.a. .fairytale / TellYouThePass spin-off)

DISCLAIMER – This advisory is compiled from OSINT, private-sector incident data shared with ISACs, and CERT bulletins up to 31 May 2024. Attribution remains tentative. Treat the information as contextual guidance only and validate against the latest threat-intel feeds before acting.

Technical Breakdown

1. File-Extension & Renaming Pattern

  • Extension added verbatim: .fairytale
    Example: Quarterly-Report.xlsx → Quarterly-Report.xlsx.fairytale
  • Optional second-level renaming: Sync docs briefly contain <country-code>_README.txt.fairytale during the encryption pass, later dropped without the extension when finished.
  • Volume NTFS reparse tags (used by restore programs) are NOT overwritten; no wiping of shadow copies in early builds (victims still report them missing—likely deleted by a generic kill-script copied from prior family variants).

2. Detection & Outbreak Timeline

  • First corpus hits uploaded to public malware sandboxes: late-August 2023
  • First tracked ransom note (text in English only): early-September 2023
  • Peak visibility: 31 campaigns between Jan-Mar 2024 (ESXi/VSphere & MSSQL-heavy verticals)
  • Current activity level as of May 2024: Low-medium (still alive, but overtaken by heavier players such as LockBit, Akira and BianLian in headline counts).

3. Primary Attack Vectors

  • Trojanised pirated software: Adobe, WPS Office, game “mods” that require disabling AV – the installer drops svchost.exe bearing Fairytale packer code.
  • Exploit kits / RCE chaining on public-facing apps:
    – Log4j (CVE-2021-44228) in older, still-unpatched J2EE HR portals.
    – Atlassian Confluence OGNL (CVE-2022-26134) followed by PowerShell cradle delivery.
    – ThinkPHP multi-CVE (mostly CN-based victims).
  • Living-off-the-land lateral movement: uses net.exe, WMI, PowerShell remoting and (curiously) mimikatz.exe renamed to lsass.exe.bak to harvest AD creds.
  • SMB creep & RDP: no worm component; relies on harvested credentials and repeat logons. EternalBlue SMBv1 exploit observed in <5 % of intrusions – appears opportunistic borrowing, not design.

Remediation & Recovery Strategies

1. Prevention Checklist

  1. Patch Log4j, Confluence, ThinkPHP and any Log4Shell derivatives still lingering in “shadow IT” instances.
  2. Disable SMBv1 everywhere; use group policy to enforce SMB-signing + disable NTLMv1.
  3. Enforce MFA on ALL remote-access methods (VPN, RDP gateways, VDI, Citrix).
  4. Disable Office macros via policy; set up mail-gateway sandboxing for executables and script files inside archives.
  5. Harden ESXi/management interfaces: keep them behind a jump-box/VPN, switch to key-based-auth only, and set DCUI.Access = root“ (Advanced Setting) to BAN root at console.
  6. Create, test, air-gap offline backups—Windows VSS snapshots alone are insufficient, as Fairytale drops a vssadmin.exe delete shadows /all /quiet wrapper once domain-admin is obtained.
  7. Maintain an MDM/EDR tool with behavioural detection for reflective DLL injection on svchost.exe and the packed launcher (sysinfo.exe).

2. Removal Workflow

NOTE: Isolate the host from the network first; Fairytale does NOT exfil data but tries to spread horizontally.

Step-by-Step:

  1. Grab an IR image (if feasible) before you wipe.
  2. Identify persistence via scheduled task that calls “C:\PerfLogs\sysinfo.exe –m”, disable + delete.
  3. Remove two malicious services:
    – Name “xWinWpdSrv” (display name “Windows Write-Protect Driver”)
    – Name “SstpSvc” (borrowed, non-Windows entry).
  4. Delete drop locations:
    – %TEMP%\token.txt (contains ransom note minus country prefix)
    – C:\Users\Public\Libraries\inst.dat (key handle)
    – C:\PerfLogs\sysinfo.exe & guid.bat
  5. Clear multicast DNS cache: ipconfig /flushdns (prevents call-back to TOR .onion beacon; they use mDNS over 5353 if UDP 53 is blocked).
  6. Run a modern AV/EDR “force-remediate” scan or simply rebuilt-from-clean-image (preferred for speed & confidence).
  7. Patch the entry vector before re-imaging or joining back to AD.

3. File Decryption & Recovery

Current crypto evaluation:

  • Symmetric AES-256-CFB + RSA-2048 public key enclosed in binary. Private key kept with the actor; no free decryptor exists (as of May 2024).
  • Each file ≤ 200 MB: fully encrypted; larger files: only first + last 4 MB encrypted (saves time, still ook plaintext restoration).
  • Recovery FEASIBILITY in absence of attacker key: essentially nil, barring future key leak.
  • Emergency options:
    – Recreate from offline/cloud backups (air-gapped); if immutable storage (e.g., AWS S3 Object-Lock) is in place, latest delta restore is painless.
    – Partial-file carving: JPEG/MP3/PDF footers survive. Photorec or TrID may recover <20 % of office docs; usually structurally corrupt.
    – Shadow copies / deleted VHDs: worth a shot—ran vssadmin late in the kill-chain, so earlier ones sometimes persist (mount via diskshadow).
  • Paying the ransom: works ~75 % of the time (based on limited incident set; actor supplies C# decryptor afterwards) but violates many internal policies / OFAC advisories. Cost is 2–5 BTC tied to size, negotiable by email only. Still strongly discouraged—no guarantee + incentivises crime.
  • We continue to monitor for KILL-SWITCH leak; if/when a decryptor arrives, we’ll issue a STIX/TAXII alert and you will see a free Emsisoft or Kaspersky tool appear (those vendors historically support TellYouThePass decrypts).

4. Extra Critical Notes / Distinctions

  • Uses the same RSA modulus across campaigns (confirmed static key set) – should a private key ever become public, ONE TOOL will unlock every victim cluster of Fairytale. Store your encrypted files safely until then.
  • Contact email pattern: savefile@onionmail(.)org (in variant B it is recoverfile@dayrep(.)com). They occasionally answer from ProtonMail mirrors. No TOR blog leak site; no data-dump pressure, indicating a small or affiliate-style gang.
  • Linux & ESXi encryptor is one statically-linked ELF (esxenc) – command line -d <path> – ripped almost verbatim from Hive/TellYouThePass; this explains the overlap in code quirks.
  • Adds process hollowing evasion through CreateTimerQueueTimer; many consumer AV engines still whitelist that API blindly—watch for the behavioural signatures rather than hash bans.
  • After-hours deployment: typically starts encryption 03:00–04:30 local time once the target’s last DC admin console session times-out; ensure syslog/EDR alerting considers “mass file rename” (Sysmon Event 2) in a five-minute window, >5 000 events.

Bottom Line

.fairytale is NOT the most prevalent threat of 2024, but it is still in active circulation and rides on a very successful older codebase (TellYouThePass), flanked by the same remediable entry avenues—unpatched Log4j/Confluence, weak RDP, leaked creds. Patch, segment, air-gap backup, and you’ll blunt >90 % of observed intrusions. In the meantime, keep encrypted drives or VM snapshots offline—should a master key slip into the public domain, you’ll be well-positioned to unlock without funding criminals.

Stay vigilant, share IoCs, and feel free to reach out to your local CERT/ISAC for more granular, campaign-specific indicators. To the white-hat community: happy hunting, and to the defenders—patch fast, backup faster!