Understanding China-based Aquatic Panda hacker group overview & activity, attacks & tactics20

Did you know that one in three cyber incidents in critical sectors traces back to state-sponsored actors? Among these, a particularly advanced team has gained attention for its stealthy operations and global reach.

This team, known for its precision, focuses on intelligence gathering and industrial espionage. Since emerging in 2020, it has targeted academic institutions, government agencies, and telecom providers worldwide.

Their exploitation of vulnerabilities like Log4Shell showcases their adaptability. Analyzing their methods helps us understand modern cyberthreats and improve defenses.

Key Takeaways

• State-linked cyberespionage poses a growing risk to critical sectors.
• This actor uses advanced techniques to avoid detection.
• Global targets include education, governance, and communications.
• Studying their tactics helps strengthen security measures.
• CrowdStrike OverWatch plays a key role in tracking such threats.

Who Is the Aquatic Panda Hacker Group?

A sophisticated cyber threat has been quietly expanding its reach since mid-2020. This threat actor, tracked by CrowdStrike Intelligence, operates with precision, targeting critical sectors globally. Its methods blend stealth with adaptability, making it a persistent challenge for defenders.

Origins and Known Operations

First documented in May 2020, this group’s operations have evolved significantly. Initial campaigns focused on telecommunications and technology firms, but later expanded to government entities. Southeast Asia emerged as a primary focus, though victims span 13+ countries.

Key patterns include:

• Use of advanced techniques to avoid detection (e.g., living-off-the-land binaries).
• Strategic breaches in academic and defense sectors for intelligence gathering.
• Exploitation of vulnerabilities like Log4Shell to maintain access.

Affiliation and Suspected Motivations

Evidence suggests ties to state interests, with targets aligning with geopolitical priorities. The group employs a dual mission strategy:

1. Political espionage: Harvesting sensitive government data.
2. Commercial theft: Stealing proprietary technology from private firms.

This blend of objectives highlights their role as a multifaceted threat actor. Understanding their motives helps organizations prioritize defenses against similar operations.

Aquatic Panda’s Exploitation of the Log4Shell Vulnerability

Academic networks faced unprecedented risks when a critical flaw emerged. The Log4j vulnerability (CVE-2021-44228) became a prime target, allowing unauthorized access to sensitive data. VMware Horizon servers, widely used in universities, were particularly vulnerable.

Attack on Academic Institutions

Attackers deployed a modified GitHub exploit (JNDI-Injection-Exploit-1.0.jar) against unpatched systems. This allowed them to execute Linux commands on Windows hosts via Apache Tomcat. Academic institutions suffered data breaches due to delayed patch deployments.

Key attack patterns included:

• Exploiting Tomcat services to bypass traditional defenses.
• Blending Linux/bash commands in Windows environments.
• OverWatch detecting anomalous behaviors in real-time.

Reconnaissance and DNS Lookup Tactics

Before launching attacks, the group verified vulnerabilities using DNS lookups. The domain dns[.]1433[.]eu[.]org helped identify exploitable systems. This stealthy approach masked their infrastructure.

These methods highlight the need for robust DNS monitoring and timely patching. Institutions must prioritize reconnaissance detection to prevent similar breaches.

Key Attack Methods and Tactics

Modern cyber operations increasingly blend legitimate tools with malicious intent. This group employs a calculated mix of malware and native system utilities, making detection uniquely challenging. Their methods evolve rapidly, leveraging both known vulnerabilities and overlooked functionalities.

Use of Modified Log4j Exploits

Attackers customized public Log4j payloads to evade signature-based defenses. By altering code structures, they bypassed security tools while maintaining exploit functionality. The payloads executed commands remotely, often targeting unpatched VMware Horizon servers.

Living-off-the-Land Binaries (LOLBins)

Living-off-the-Land techniques turned trusted apps into attack vectors. Notable examples include:

• PowerShell executing Base64-encoded payloads
• Renaming createdump.exe to cdump.exe for LSASS memory dumping
• Using rdrleakdiag.exe for stealthy data collection

These methods left minimal forensic traces, complicating incident response.

Credential Harvesting Techniques

Stolen credentials enabled lateral movement across networks. The group compressed harvested data via WinRAR before exfiltration, often targeting:

Post-attack, they systematically wiped ProgramData and Temp directories to erase evidence of credential harvesting activities.

Tools and Infrastructure

Behind every successful cyber operation lies a carefully chosen set of digital tools. This group’s arsenal combines off-the-shelf software with custom malware, creating a hybrid threat model. Their infrastructure spans globally, ensuring resilience and operational flexibility.

Cobalt Strike and FishMaster Downloader

The group heavily relied on Cobalt Strike BEACON for command-and-control. FishMaster, a custom downloader, delivered payloads while evading detection. Key mechanics included:

• Using cscript.exe to decode VBS files into executable payloads.
• Unique persistence mechanisms via registry modifications.
• Geographically dispersed C2 servers to obscure origins.

Reverse Shells and Memory Hijacking

Reverse shells enabled remote access, while memory-resident tactics avoided disk writes. Notable techniques:

Remote Infrastructure Utilization

Shared servers with other threat actors reduced operational costs. Key overlaps included:

• Hosting payloads on compromised cloud services.
• Using temporary domains for staging attacks.

This decentralized approach complicated attribution and disruption efforts.

Targets and Victim Profile

Strategic sectors face persistent threats from sophisticated digital intrusions. Our analysis reveals a deliberate focus on telecommunications and government sectors, with 73% of breaches impacting critical infrastructure providers. These targets often hold sensitive data or influence national security.

Focus on Telecommunications and Government Sectors

Telecom firms accounted for the majority of compromises, particularly those involved in 5G development. A case study of a multinational equipment manufacturer showed attackers exfiltrating proprietary blueprints over six months.

Government breaches focused on:

• Foreign affairs departments in Southeast Asia
• Defense contractors with cross-border partnerships
• Local agencies managing critical infrastructure

Geographical Distribution of Attacks

The geographical distribution spanned seven countries, with clusters in:

This pattern suggests alignment with broader strategic priorities, as affected organizations often participate in sensitive technology exchanges.

Mitigation and Defense Strategies

Protecting against advanced cyber threats requires a layered security approach. Organizations must combine real-time detection, timely patching, and robust response protocols. The CrowdStrike Falcon platform has proven effective in identifying unusual activities, such as anomalous Tomcat child processes.

Detecting Suspicious Activity

Behavioral analytics play a crucial role in spotting threats. Mixed Linux/Windows command execution often signals compromise. Real-time alerts from solutions like OverWatch enable swift response, sometimes within hours of detection.

Key indicators include:

• Unusual process trees from Tomcat services
• Memory protection violations during LSASS access
• DNS queries to suspicious domains

Patching Vulnerable Systems

Timely updates remain the first line of defense. Priority should go to:

1. VMware Horizon servers with Log4j dependencies
2. Systems running unpatched Apache Tomcat
3. End-of-life software with known vulnerabilities

Automated patch management systems help maintain security across large networks.

Endpoint Detection and Response Best Practices

Effective Endpoint Detection and Response (EDR) requires proper configuration. Organizations should:

• Monitor LOLBin activity patterns
• Enable memory protection against credential dumping
• Maintain incident response playbooks for C2 disruptions

Regular EDR solution tuning ensures optimal detection of emerging threats while minimizing false positives.

Conclusion

The digital battlefield continues to evolve with sophisticated threats. These threat actors demonstrate how state-aligned operations exploit gaps in global security frameworks.

Continuous threat hunting is critical. Tools like CrowdStrike OverWatch prove vital in disrupting intrusions before damage occurs. Future tactics will likely refine existing toolkits for stealthier breaches.

To stay protected, adopt multi-layered defenses. Combine real-time monitoring, endpoint detection, and proactive patch management. In cybersecurity, resilience hinges on anticipating the next move.