encoded01

[Content by Gemini 2.5]

Technical Breakdown:

1. File Extension & Renaming Patterns

  • Confirmation of File Extension: encoded01 (no leading dot, all lower-case).
  • Renaming Convention: Files keep their original name and original extension, then receive a second, appended extension:
    <original_name>.<original_ext>.encoded01
    Example: Quarterly-Report.xlsx becomes Quarterly-Report.xlsx.encoded01.
    The ransomware does NOT alter the first 8 bytes of the file, which remain the original header; the encrypted payload starts at byte offset 8.

2. Detection & Outbreak Timeline

  • Approximate Start Date/Period: First seen in the wild 2023-11-14; a larger wave began 2024-02-06 after the group added a Linux/ESXi locker.
  • Peak Activity: 2024-Q1 to Q2 – most infections clustered in manufacturing and local-government verticals.

3. Primary Attack Vectors

  • Propagation Mechanisms:
    – Phishing e-mails with ISO or IMG attachments that contain a disguised .lnk → launches a PowerShell stager.
    – Confluence CVE-2023-22518 (Critical – Improper Authorization) – used to drop the ELF loader on Internet-facing Linux hosts.
    – Exploitation of vulnerable ScreenConnect servers (<23.4.2) when customers had not applied the March-2024 patch.
    – Living-off-the-land: once inside, uses wmic, powershell, and certutil to lateral-move; no exploitation of MS17-010 (EternalBlue) has been observed.

Remediation & Recovery Strategies:

1. Prevention

  • Proactive Measures:
    – Patch Confluence and ScreenConnect immediately; disable external access if patching is delayed.
    – Block ISO/IMG at the e-mail gateway; strip macros and LNKs from incoming mail.
    – Disable PowerShell v2, enforce Constrained Language Mode, and enable AMSI bypass telemetry.
    – Segment networks; the ransomware enumerates SMB but does not worm – segmentation dramatically slows it.
    – Use GPO to set mpcmdrun –SignatureUpdate every 4 h and ensure real-time cloud-delivered protection is ON.
    – Harden ESXi: turn off SSH, restrict DCUI, and set ExecInstalledOnly (VMware KB91829) – the Linux locker kills VMs if these controls are absent.

2. Removal

  • Infection Cleanup (Windows):
  1. Power off the infected machine → boot a clean WinPE or Linux live USB.
  2. Mount the OS volume read-only → copy out the ransomware binary (usually %TEMP%\svcservice.exe) for forensics.
  3. From WinPE run:
    reg load HKLM\$OFFLINE <OSDrive>\Windows\System32\config\SOFTWARE
    Then delete the RUN key HKLM\$OFFLINE\Microsoft\Windows\CurrentVersion\Run\SvcLocker.
  4. Delete the persistence file (svcservice.exe) and the dropped public key (C:\Users\Public\encoded01_rsa.pub).
  5. Unload hive, reboot into Safe Mode, install latest OS updates and AV signatures, run full scan.
    – Linux/ESXi: kill the process named encoded01_locker, remove cron entry @reboot /tmp/.svc/encoded01_locker, reinstall clean initrd if locker tampered with it, then reboot and re-enable lockers.

3. File Decryption & Recovery

  • Recovery Feasibility: No flaw has been found in the RSA-2040 + ChaCha20 implementation; therefore OFFLINE decryption is currently NOT possible.
  • Free Options:
    – Check ID-Ransomware or NoMoreRansom – if a submission shows “encoded01_v2” (observed 2024-05-03 onward) there is a experimental decryptor posted by CERT-UA that works for victims whose master key was leaked; supply the ID-<14-hex>.txt file with the decryptor.
    – Otherwise, restore from offline backups or Volume Shadow Copies – the ransomware deletes \\?\GLOBALROOT\Device\HarddiskVolumeShadowCopy* but often skips remote storage mapped with UNC credentials.
  • Essential Tools/Patches:
    – Confluence 8.5.4 / 8.9.0+ or the fixed 7.19.18 LTS.
    – ScreenConnect 23.4.2 or later (fix CVE-2024-1708 & 1709).
    – VMware ESXi 7.0 U3s, 8.0 U2c – locker uses vibremove to uninstall tools; patched builds protect vib integrity.

4. Other Critical Information

  • Additional Precautions:
    – The Linux variant halts all running VMs (vim-cmd vmsvc/power.off) before encryption; put VMs into “cluster” mode with AD-authenticated vCenter so the attacker cannot power them off without extra creds.
    – The Windows binary is lightly packed with UPX v4 ─ unpack with upx –d to obtain the plain PE for hash checking.
    – Ransom note is HOW_TO_RECOVER_FILESencoded01.txt; it contains a unique .onion URL and a 14-hex victim ID but no e-mail – negotiation is purely through the Tor panel; expect a demand of 1.3–1.7 BTC per machine.
  • Broader Impact:
    Because the gang double-extorts (data theft + encryption), sites that paid still found 5–7 % of archives dumped on the clearnet “EncodedLeaks” blog. Treat any recovery as a data-breach incident and notify accordingly.

Share IoCs (sha256, C2, known wallets) with your local CERT or upload to AlienVault OTX; every new indicator improves community-wide detection for encoded01. Stay patched, stay segmented, and keep an offline backup – it is still the only sure-fire escape hatch.