encoded

[Content by Gemini 2.5]

Technical Breakdown:

1. File Extension & Renaming Patterns

  • Confirmation of File Extension: The canonical extension appended after encryption is “.encoded”.
  • Renaming Convention: Original filenames are kept intact and the 4-byte extension is simply appended (e.g., 2024-salary.xlsx → 2024-salary.xlsx.encoded). No e-mail addresses, random IDs, or secondary markers are added.

2. Detection & Outbreak Timeline

  • Approximate Start Date/Period: First large-scale e-mail campaigns pushing “Encoded” were observed in late-August 2022; activity peaked January–April 2023 with a second wave in October 2023.

3. Primary Attack Vectors

  • Propagation Mechanisms:
  1. Mal-spam (“.html” → “.zip” → ISO or IMG) that drops the initial .NET loader (“Loader.exe”).
  2. Exploitation of unpatched SMB (EternalBlue-ms17-010) and RDP brute-force plus credential-stuffing tools such NLBrute and RdpScan.
  3. Weaponised software cracks and key-gen sites delivering the same loader under fake KMS or Adobe installers.
  4. Once inside, the malware uses WMIC / PsExec to move laterally and sets autorun key HKCU\Software\Microsoft\Windows\CurrentVersion\Run\SysHelper to keep persistence.

Remediation & Recovery Strategies:

1. Prevention

  • Proactive Measures:
  • Patch MS17-010 (disable SMBv1) and enforce NLA on RDP.
  • Apply application whitelisting (WDAC, AppLocker).
  • Filter macro/iso/lnk attachments at the mail gateway.
  • Mandate MFA for any remote admin tool (RDP, AnyDesk, etc.).
  • Keep up-to-date offline backups (3-2-1 rule) and store immutable snapshots.

2. Removal

  1. Physically isolate the box or power-off VLAN to stop lateral movement.
  2. Boot into WinRE → Safe Mode + Networking.
  3. Identify & kill the parent process (usually %TEMP%\Loader.exe) and delete:
  • %APPDATA%\SysHelper\ (main binary drop)
  • Scheduled task SysHelperUpdate
  1. Delete registry autorun value above.
  2. Run a reputable AV (Defender, Kaspersky, ESET, Sophos) – modern signatures detect the loader as “Trojan:Win32/Encoded.A” or “Ransom.Win32.ENCODED.SM”.
  3. Clear Volume-Shadow copies only after confirming no viable decryptor exists; otherwise leave them intact for recovery attempts.

3. File Decryption & Recovery

  • Recovery Feasibility: Files are encrypted with AES-256 (unique key per file) and the AES key(s) are RSA-2048-encrypted to a hard-coded attacker public key. No known flaw → decryption without the private key is currently impossible.
  • Venues to pursue:
    – Check whether the criminals left a free “test” decryptor; occasionally they unlock a few files to prove capability.
    – Upload a pair of original/encrypted files to NoMoreRansom.org; the “Encoded” decryptor hosted there only works for victims whose RSA key was leaked in April 2023 law-enforcement action (very limited set).
    – Rebuild from offline backups or Windows shadow copies the ransomware forgot to purge (rare).
    – File-recovery tools (Photorec, R-Studio) can sometimes rescue pre-encryption data blocks on HDDs with lots of free space.
  • Essential Tools/Patches:
  • Microsoft MS17-010 security update (KB4012598 for legacy OS).
  • Kaspersky “Encoder” tool (only if your RSA key was released).
  • Emisoft or Bitdefender “Encoded” standalone decryptor (check version date on NoMoreRansom to avoid fakes).
  • MSERT (Microsoft Safety Scanner) for post-cleanup double-check.

4. Other Critical Information

  • Additional Precautions:
  • Encoded terminates >200 processes (SQL, Exchange, Veeam, etc.) to unlock data files; expect service outages.
  • It deletes local shadow copies with vssadmin delete shadows /all and clears the event log “Application” to hinder forensic triage.
  • A marker file HOW_TO_RECOVER.hta (HTA-based note) is written to every folder; wallet address is static—easy to track payment stats on blockchain explorers.
  • Ransom demand averages 0.04 BTC (∼1 400 USD) with a 72-hour deadline, after which the note claims the key will be destroyed (typical pressure tactic).
  • Broader Impact:
  • Small offices / local governments with aging Server 2012 boxes account for the majority of public complaints.
  • Because the same RSA public key is reused within each campaign, one seized server (as happened in NL 2023) instantly supplies the master private key for every victim in that cluster—always report to law-enforcement as they may already be able to help.
  • Security products now detect and block the Delphi-based loader before payload deployment; therefore up-to-date endpoints have a high prevention rate, underscoring the importance of updating rather than paying.

Remain calm, power down networks quickly, and work through backups first—paying the ransom encourages the ecosystem and still does not guarantee recovery. Good luck, and patch early!