Source code for Android iBanking bot surfaces on underground forum

The source code for an Android mobile banking Trojan app was released on an underground forum, making it possible for a larger number of cybercriminals to launch attacks using this kind of malware in the future.

The Trojan app had initially appeared on the underground market late last year with a price of US$5,000, according to researchers from RSA, the security division of EMC, who spotted the recent source code leak.

The malware app, which the RSA researchers call iBanking, is used in conjunction with PC malware to defeat mobile-based security mechanisms used by banking sites.

Most PC malware that targets online banking users can inject content into browsing sessions. This capability is used to display rogue Web forms on banking sites in order to steal log-in credentials and other sensitive financial information from users. Such malware can also “ride” the active online banking sessions of victims to initiate rogue transactions from their accounts.

Many banks responded to these threats by implementing two-factor authentication and transaction authorization systems that work by sending unique one-time-use codes to their customers’ registered phone numbers via SMS.

Faced with an increasing need to access their victims’ text messages in order to defraud them, attackers have started to created mobile malware like iBanking for this purpose.

The iBanking malware was distributed “through HTML injection attacks on banking sites, social engineering victims into downloading a so called ‘security app’ for their Android devices,” the RSA researchers said Thursday in a blog post.

In addition to capturing incoming and outgoing text messages, the iBanking app can redirect calls to a pre-defined phone number, capture audio from the surrounding environment using the device’s microphone and steal data like the call history log and the phone book, the researchers said.

The malware connects to a command-and-control server that allows attackers to issue commands to each infected device, making iBanking not just a Trojan app, but a botnet client.

The iBanking source code leak spotted recently by the RSA researchers involved the source code for the malware’s Web-based control panel and a script that can customize the iBanking APK (Android application package) with different configurations.

The malicious APK can be customized to masquerade as a security app or an app created by a targeted financial institution. During installation it asks for administrative rights, which can make it harder to remove at a later time, the RSA researchers said.

In the past, the leaked source code for other commercial online banking malware programs like Zeus led to a larger number of attacks using those threats and enabled cybercriminals to create more sophisticated Trojan programs based on them.

As a result of this recent code leak, “Trojan botmasters are now in a better position to incorporate this advanced mobile counterpart in their PC-based attacks, affording them control over their victims’ smartphones,” the RSA researchers said.

“The malware’s ability to capture SMS messages and audio recordings, as well as divert voice calls makes step-up authentication all the more challenging as fraudsters gain more control over the OOB [out-of-band] device,” the researchers said. “This highlights the need for stronger authentication solutions capable of validating users’ identities using multiple factors including biometric solutions.”