Shylock banking malware updated to spread via Skype, researchers say

The Shylock home banking malware has been updated with new functionality that allows it to spread automatically using the popular Skype Voice-over-IP (VoIP) and instant messaging client.

Shylock, named after a character from Shakespeare’s “The Merchant of Venice,” is a Trojan program discovered in 2011 that steals online banking credentials and other financial information from infected computers.

According to security researchers from CSIS Security Group, a Denmark-based IT security firm, the malware’s new Skype-related functionality was added earlier this week in the form of a plug-in called “msg.gsm.”

The new plug-in allows the malware to send rogue messages and files through Skype and delete them from the application’s history, CSIS partner and security specialist Peter Kruse said Thursday in a blog post.

The plug-in also bypasses the warning and confirmation request that Skype displays when a third-party program tries to connect and interact with the application.

“Shylock is one of the most advanced Trojan-banker [malware] currently being used in attacks against home banking systems,” Kruse said. “The code is constantly being updated and new features are added regularly.”

The Shylock authors appear to target users from specific regions of the world. According to a map showing the distribution of Shylock infections that was published by CSIS, there’s a high concentration of victims in the U.K. However, there are also many Shylock-infected computers throughout mainland Europe and the U.S.

The use of Skype for distribution allows Shylock’s authors to maintain their geographic focus, Kruse said. Previous cases of malware spreading through MSN Messenger, Yahoo Messenger, or other real-time chat programs, have resulted in local infection outbreaks because people have a tendency to stay connected with friends located in the same region, he said.

Last week, Microsoft announced that it plans to retire its Messenger service globally on March 15 and advised users to switch to Skype, a product the company has owned since 2011. The fact that Shylock’s authors decided to start using Skype as a distribution platform soon after this announcement might not be just a coincidence, Kruse said.

Aside from spreading through Skype, Shylock can also copy itself to removable drives and local network shares, Kruse said.