Microsoft applies 'surgical sinkhole' to strangle botnet installed on new PCs

Computerworld - Microsoft has uncovered a vulnerability in the PC supply chain that allows hackers to pre-install malware-infected copies of Windows onto new machines.

As a result, the company has received approval from a federal court to strangle a botnet it uncovered during the investigation, which it conducted in China.

The company announced on Thursday that it was diverting traffic from the 3322.org domain to its own DNS (domain name system) servers to selectively block communications from PCs infected with the "Nitol" botnet to the hackers' command-and-control (C&C) machines.

It's also blocking access to approximately 70,000 malware-plagued subdomains of 3322.org, a Chinese web hosting firm. Other subdomains of 3322.org are resolving normally for users.

The tactic, called "sinkholing," isn't new to Microsoft's anti-malware efforts -- it's sinkholed other botnets -- most recently in March, when it disrupted networks that relied on the Zeus crimeware toolkit -- but a new twist lets it block the bad on 3322.org while letting the good through.

"We're always concerned about collateral damage," said Richard Boscovich, a senior attorney in Microsoft's digital crimes unit, in an interview yesterday. "3322.org has between 2.5 and 2.75 million subdomains, but only the 70,000 malicious subdomains will be sinkholed. The remaining will resolve."

Most sinkholing efforts divert all traffic from a malicious domain, blocking access for everyone.

Redwood City, Calif.-based Nominum provided technical assistance and its DNS software to the operation, which Microsoft has dubbed "b70."

"This was a surgical strike," said Craig Sprosts, Nominum's general manager for fixed broadband solutions, in an interview today. "Microsoft took ownership of the [3322.org] domain and basically created a more surgical access to the good domains and blocked the bad."

The problem posed by the sinkholing of 3322.org, with its millions of subdomains, was technically difficult, said Sprosts and a college, Daniel Blasingame, general manager for embedded solutions at Nominum.

"Microsoft needs to be able to change the list of the good and bad subdomains on the fly," said Blasingame, who cited that as well as the sheer scale of the project as factors complicating the operation.

All DNS traffic between users and the 3322.org domain and its subdomains now flows through Nominum servers installed at Microsoft's data centers, confirmed Sprosts.

"Microsoft has told us that this is literally the biggest botnet it's dealt with," said Blasingame, talking about the amount of sinkholed traffic Microsoft is now dealing with. "They've said it's a massive amount of DNS traffic."

Microsoft's take on 3322.org is unclear. In a complaint filed on Sept. 10 with a Virginia federal court, Microsoft called the domain a "major hub of illegal Internet activity, used by criminals every minute of every day to pump malware and instructions to the computers of innocent people world-wide."