Defending against China-nexus covert networks of compromised devices

Covert networks are used to connect across the internet in a low-cost, low-risk, deniable way, disguising the origin and attribution of malicious activity. Actors have been observed using them for each phase of their Cyber Kill Chains, from performing scans as part of reconnaissance, to the delivery of malware, communicating with said malware, and exfiltrating stolen data from a victim. They can also be used for general deniable internet browsing, allowing threat actors to research exploitation techniques, new TTPs, and their victims without attribution. Some covert networks are also used by legitimate customers to browse the internet, making it challenging to attribute malicious activity.

There is evidence that covert networks used by China-nexus actors are created and maintained by Chinese information security companies. A network known to network defenders as Raptor Train, which in 2024 infected more than 200,000 devices worldwide, was controlled and managed by the Chinese company, Integrity Technology Group. This company was also assessed by the FBI to be responsible for the computer intrusion activities attributed to China-based hackers known as Flax Typhoon.

“Botnet operations represent a significant threat to the UK by exploiting vulnerabilities in everyday internet-connected devices with the potential to carry out large-scale cyber attacks” 

NCSC Director of Operations, Paul Chichester

Covert networks mostly consist of compromised SOHO routers, but they also pull in any vulnerable device they can exploit at scale. Raptor Train was made up of thousands of SOHO routers and IoT devices, such as web cameras and video recorders, as well as firewalls and Network Attached Storage (NAS) devices. The KV Botnet used by Volt Typhoon was mainly made up of vulnerable Cisco and NetGear routers. The edge devices were vulnerable because they were “end of life” – out of date and no longer receiving updates or security patches by their manufacturers.

The cyber security industry has been aware of examples of these networks for some time and has publicly reported on the widespread scale of the threat and its implications. Mandiant Intelligence produced a public blog in May 2024 talking about covert networks in which they highlighted a key issue for defenders – indicator of compromise (IOC) Extinction. If a particular threat group could now come from one of many covert networks, each with potentially hundreds of thousands of endpoints, and each used by multiple threat actors, old network defence paradigms of static malicious IP block lists will be less effective. This is compounded by the dynamic nature of these networks where new nodes will be added as old devices are patched or removed from use.