Mustang Panda’s New LOTUSLITE Variant Targets India Banks, South Korea Policy Circles

Cybersecurity researchers have discovered a new variant of a known malware called LOTUSLITE that’s distributed via a theme related to India’s banking sector.

“The backdoor communicates with a dynamic DNS-based command-and-control server over HTTPS and supports remote shell access, file operations, and session management, indicating a continued espionage-focused capability set rather than financially motivated objectives,” Acronis researchers Subhajeet Singha and Santiago Pontiroli said in an analysis.

The use of LOTUSLITE was previously observed in spear-phishing attacks targeting U.S. government and policy entities using decoys associated with the geopolitical developments between the U.S. and Venezuela. The activity was attributed with medium confidence to a Chinese nation-state group tracked as Mustang Panda.

The latest activity flagged by Acronis involves deploying an evolved version of LOTUSLITE that demonstrates “incremental improvements” over its predecessor, indicating that the malware is being actively maintained and refined by its operators.

The deviation from the prior attack wave relates to a geographic pivot that focuses mainly on the banking sector of India, while keeping the rest of the operational playbook mostly intact. The starting point of the attack is a Compiled HTML (CHM) file embedding the malicious payloads – a legitimate executable and a rogue DLL – along with an HTML page that contains a pop-up which prompts the user to click “Yes.”