In July 2026, Microsoft Defender Experts observed phishing campaigns targeting organizations across multiple industries that distributed a masqueraded MSP360 Remote Monitoring and Management (RMM) installer through meeting invitations, PDF-themed lures, software update prompts, and other social-engineering content. Once executed, the legitimate MSP360 installer, distributed under a deceptive file name established remote management access on affected devices and enabled threat actors to gain an initial foothold using trusted administrative software.

Microsoft observed the MSP360 deployment being used to download and install a ConnectWise ScreenConnect client, creating a secondary remote-access channel that provided redundant access to compromised systems. Microsoft did not observe exploitation of ScreenConnect software itself; rather, threat actors abused legitimately obtained remote administration software to establish and maintain access. After access was established, threat actors used these remote administration channels to deploy additional tools and conduct post-compromise activity, including information collection and credential-access operations.

This activity highlights how threat actors continue to abuse legitimate remote administration software to blend into normal IT operations while maintaining persistent access and reducing detection opportunities. Microsoft Defender for Endpoint detects suspicious and uncommon remote-management activity, while the hunting queries and mitigations in this post can help organizations identify and restrict unapproved RMM use.

Attack chain overview

The observed multi-stage intrusion chain began when phishing lures delivered a legitimate, digitally signed MSP360 RMM v2.5.0.67 installer under deceptive filenames. Following successful User Account Control (UAC) elevation, the installer established MSP360 services for persistent access and leveraged the RMM agent to invoke PowerShell, download, and silently install ConnectWise ScreenConnect.

This effectively introduced a second remote administration channel on the compromised device, which the threat actor subsequently used to transfer and execute additional tooling supporting credential access, local data collection, and other post-compromise activity.

Initial Access: Phishing Campaign Delivering Masqueraded MSP360 RMM Installer

Microsoft observed multiple phishing campaigns that used a multi-stage delivery chain to distribute legitimate, digitally signed MSP360 RMM software (v2.5.0.67). Phishing emails directed users to actor-controlled landing pages that impersonated document-sharing portals, invitation workflows, Adobe Reader download pages, Zoom installation pages, and business collaboration platforms.

Upon user interaction, victims were redirected to download locations hosted on both attacker-controlled infrastructure and legitimate cloud services including Amazon S3, Cloudflare R2, Dropbox, GitLab, and Supabase. The downloaded executables used filenames crafted to resemble legitimate business content, meeting invitations, PDF documents, and software installers. Analysis of downloaded samples showed that many ultimately contained the same MSP360 RMM installer package despite appearing as different files to the victim.

MSP360 SHA256: 108ef7e628d7a20bd6241a5b57149e27a6061f467123eb64061975559f8f73dc

MSP360 SHA1: f34330d4c6e0aa978dc3af40360c14b31ad51127

Observed lure themes:

We have observed the threat actor using multiple social-engineering themes, including:

• Workplace meeting requests
• Zoom and Google Meet installation prompts
• Adobe Acrobat and PDF reader updates
• RSVP invitations and e-cards
• Job offer documents
• Document review and signature requests
• DHL and package-delivery themed content

Examples of observed filenames included:

• VIP_ECARD_INVITATION_rmm_v2.5.0.67_oid[redacted].exe
• ZoomSetup_Installation_v2.5.0.67_ oid[redacted].exe
• PDF Reader & Editor the Adobe Acrobatte_rmm_v2.5.0.67_ oid[redacted].exe
• RSVP_INVITATION_E_CARD_rmm_v2.5.0.67_ oid[redacted].exe
• SSA.GOV_STATEMENT_rmm_v2.5.0.67_ oid[redacted].exe

The campaign relied on a diverse set of payload-hosting mechanisms. Microsoft observed the actor distributing the payload through attacker-controlled domains, websites assessed to be compromised, and legitimate cloud-hosted services. Cloud-hosted services used for payload distribution included Amazon S3, Cloudflare R2, Dropbox, GitLab, and Supabase.

This approach enabled the actor to rapidly rotate delivery infrastructure while continuing to distribute the same MSP360 installer using different lure themes and filenames.

RMM platforms are attractive to threat actors because they are designed to provide administrators with broad remote management capabilities across managed endpoints, including remote command execution, software deployment, file transfer, and persistent service-based access. When abused, these same capabilities can give threat actors a flexible post-compromise channel for maintaining access, deploying additional tooling, and conducting follow-on activity while blending in with legitimate remote administration workflows.

MSP360 RMM installation and foothold establishment

After victims downloaded and executed the masqueraded MSP360 installer, the binary launched from the user’s Downloads directory under a filename designed to resemble a legitimate business document.

The installer subsequently dropped multiple installation components, including System.dll, nsExec.dll, and UAC.dll, to the following folder paths before relaunching itself through an elevation workflow generated by the installer framework. Next, the installer invoked a Windows User Account Control (UAC) elevation workflow. In observed successful installations, the process continued with elevated privileges, allowing deployment of MSP360 components and services. In unsuccessful installations, the elevation did not complete, and deployment terminated before the software was fully installed.

Following elevation, the installer initiated the MSP360 installation workflow and recorded installation status messages using Windows eventcreate.exe. The installer generated “Begin installation” and “End installation. MSP360 de Success.” events under the event source: MSP360 RMM Agent installer. The installer dropped multiple MSP360 plugins and binaries within the installation directory: C:\Program Files\RMM Agent\.

The installer also performed prerequisite discovery by enumerating installed .NET runtimes using: dotnet –list-runtimes. To establish long-term access on the affected device, the installer registered two Windows services: RMM.Agent.exe & RMM.Agent.Launcher.exe. Microsoft observed events indicating stopping any existing MSP360 services and installing new MSP360 services.

In addition to service-based persistence, the installer created registry-based autorun entries for MSP360 user interface components, ensuring the tray applications would automatically launch when users signed in.

The installation routine also modified the Windows Firewall configuration by creating an inbound allow rule for the MSP360 agent. The rule allowed inbound UDP traffic to C:\Program Files\RMM Agent\RMM.Agent.exe on port 48678. This configuration enabled network communications required by the remote management platform.

Not every execution of the installer resulted in a successful deployment. In some instances, the installer was launched by the user and began its installation routine but subsequently attempted to obtain elevated privileges through User Account Control (UAC). When elevation was denied or aborted, the installation terminated before completing deployment of the MSP360 RMM components. The process execution flow showed installation initialization activity followed by events indicating that administrative privileges were required, with no subsequent evidence of the persistence mechanisms, services, or remote management functionality observed during successful installations.

Remote command execution from MSP360 Agent and ScreenConnect deployment

Following successful installation of MSP360 RMM, the newly installed RMM.Agent.exe service launched PowerShell. The PowerShell process modified the execution policy for the current session and executed Invoke-WebRequest commands to download an MSI package named ClientSetup.msi from actor-controlled infrastructure. The downloaded package was then installed silently through msiexec.exe using the /qn switch, eliminating visible user interaction. This installation activity resulted in the deployment of a ConnectWise ScreenConnect client on the compromised endpoint, including ScreenConnect.ClientService.exe, ScreenConnect.WindowsClient.exe, and supporting components.

The installer additionally created Windows service registrations, application uninstall entries, and authentication-related registry modifications associated with the newly deployed ScreenConnect client.

Following deployment, the ScreenConnect client service launched with configuration parameters referencing actor-controlled infrastructure and subsequently established successful outbound communications. The service then spawned ScreenConnect.WindowsClient.exe, providing an additional remote access channel independent of MSP360. Following establishment of the ScreenConnect session, the threat actor used ScreenConnect to transfer and stage additional executables in the following directories:

• C:\Users\%user%\OneDrive\Documents\ScreenConnect\Temp\
• C:\Users\%user%\Documents\ScreenConnect\Temp\

Examples of frequently observed files included:

• WindVerify.exe
• WindowsUpdate.exe
• WindowsSecurity_PIN.exe
• WindowsSecurity_Password.exe
• WindowsPassKey.exe
• SCHider.exe
• PIN.exe
• phonepc.exe
• DefenderDT.exe
• DefenderControl.exe
• phonelinkupdate.exe
• PhoneLinkPrompt.exe
• Passwords.EXE
• OpenCamera.exe
• open_phone_link.exe
• MouseHiderGUI.exe
• HideUL.exe
• HideMouseApp.dll
• HideMouse.exe
• HideFromControlPanel.exe
• HideCursor.exe
• BannerHider.exe
• WebBrowserBookmarksView.exe
• WebBrowserPassView.exe

These files were among the most frequently observed utilities delivered by the threat actor following establishment of a ScreenConnect session. Several filenames were intentionally chosen to resemble legitimate Windows, Microsoft Defender, Phone Link, and security-related components, likely to reduce user suspicion and blend into normal operating system activity. These utilities were observed during post-compromise activity and were used to support subsequent operations on affected systems. Several of the observed tools are commonly associated with credential access, information collection, execution of additional payloads, and efforts to reduce defender visibility.

The execution of these files occurred through ScreenConnect’s built-in RunFile functionality, which allows files to be transferred to and executed on managed endpoints. This activity demonstrates how the threat actor leveraged a legitimate MSP360 RMM deployment to establish an initial foothold before deploying ConnectWise ScreenConnect as a secondary remote access platform. The combination of MSP360 and ScreenConnect provided the threat actor with redundant remote administration channels and enabled the transfer, execution, and management of additional tooling during subsequent stages of the intrusion.

The threat actor subsequently used these remote access platforms to facilitate follow-on activities including information collection, credential access, and the deployment of additional utilities on compromised systems.

Microsoft also observed separate activity during July in which FaronicsDeployAgent.exe, a legitimate deployment and remote access application, was used in a similar manner to MSP360 RMM. In this activity, the threat actor leveraged FaronicsDeployAgent.exe as the initial remote management platform and subsequently used it to download and install ScreenConnect. This observation demonstrates that the deployment of ScreenConnect was not limited to MSP360-based intrusions, with additional legitimate remote administration software also being leveraged to establish remote access and facilitate ScreenConnect installation.

Attribution

Microsoft has not attributed this activity to a named threat actor. The campaigns are tracked as unattributed activity.

Mitigation and protection guidance

Microsoft recommends the following actions to help organizations reduce their exposure to this activity. Check the recommendations card for the deployment status of monitored mitigations.

• Govern approved RMM tools: For approved RMM systems used in your environment, enforce security settings where possible to implement multi-factor authentication (MFA).
• Restrict unauthorized software: Use Application Control for Windows to create policies to block unapproved IT management tools. Both solutions include functionality to block specific software publisher certificates:
  • Application Control for Windows file rule levels allow administrators to specify the level at which they want to trust their applications, including listing certificates as untrusted.
  • AppLocker’s publisher rule condition is available for files that are digitally signed, which can enable organizations to block non-approved RMM instances that include publisher information.
• Block specific signed applications: Microsoft Defender for Endpoint also provides functionality to block specific signed applications using the block certificate action.
• Consider searching for unapproved RMM software installations (see the Advanced hunting section). If an unapproved installation is discovered, reset passwords for accounts used to install the RMM services. If a system-level account was used to install the software, further investigation may be warranted.
• Strengthen endpoint protection: Turn on cloud-delivered protection in Microsoft Defender Antivirus or the equivalent for your antivirus product to cover rapidly evolving attacker tools and techniques. Cloud-based machine learning protections provide near-instant, automated protection against new and emerging threats.
• Investigate unauthorized installations: Turn on the following attack surface reduction rule to block or audit activity associated with this threat:
  • Use advanced protection against ransomware
  • Block process creations originating from PsExec and WMI commands. Some organizations may experience compatibility issues with this rule on certain server systems but should deploy it to other systems to prevent lateral movement originating from PsExec and WMI

Microsoft Defender XDR detections

Microsoft Defender XDR customers can refer to the list of applicable detections below. Microsoft Defender XDR coordinates detection, prevention, investigation, and response across endpoints, identities, email, and apps to provide integrated protection against attacks like the threat discussed in this blog.

Threat intelligence reports

Microsoft customers can use Microsoft Defender XDR Threat Analytics and related Microsoft threat intelligence reporting to stay current on the malicious activity, indicators, detection coverage, and recommended response actions associated with this campaign. These reports provide investigation context, protection guidance, and updated intelligence that security teams can use to prevent, mitigate, or respond to related activity in their environments.

Advanced hunting

// Run this query to identify the presence of MSP360 RMM agent

let MSP360RMM = "108ef7e628d7a20bd6241a5b57149e27a6061f467123eb64061975559f8f73dc";
DeviceFileEvents
| where Timestamp >= ago(30d)
| where SHA256 =~ MSP360RMM

// Run this query to identify the remote command execution from MSP360 RMM Agent

DeviceProcessEvents
| where Timestamp >= ago(30d)  
| where (InitiatingProcessVersionInfoCompanyName == "MSP360" and ProcessCommandLine == "\"powershell.exe\"") or ( InitiatingProcessCommandLine == "\"powershell.exe\"" and ProcessCommandLine has_all ("msiexec.exe","\\Temp\\",".msi") and InitiatingProcessParentFileName == "RMM.Agent.exe")

// Run this query to identify the suspicious network connections from the threat actor’s use of ScreenConnect

let MaliciousURLs =  DeviceNetworkEvents
| where Timestamp >= ago(30d)
| where InitiatingProcessCommandLine == "\"powershell.exe\""
| where InitiatingProcessParentFileName == "RMM.Agent.exe"
| where isnotempty(RemoteUrl)
| distinct  RemoteUrl;
DeviceNetworkEvents
| where Timestamp >= ago(30d)
| where InitiatingProcessFileName has_any ( "ScreenConnect.ClientService.exe","ScreenConnect.WindowsClient.exe","ScreenConnect.Client.exe")
| where isnotempty(RemoteUrl)
| where RemoteUrl in (MaliciousURLs)

// Run this query to identify the suspicious payloads dropped and launched by the threat actor’s use of ScreenConnect

DeviceProcessEvents
| where Timestamp >= ago(30d)  
| where InitiatingProcessCommandLine  has_all ("ScreenConnect.WindowsClient.exe", "RunFile","\\Documents\\","\\Temp\\")

MITRE ATT&CK Techniques observed

This campaign has exhibited use of the following attack techniques. For standard industry documentation about these techniques, refer to the MITRE ATT&CK framework.

Resource Development

• T1583.001 Acquire Infrastructure: Domains | Domains were used to host phishing landing pages, payload delivery infrastructure, and ScreenConnect services associated with the campaign.
• T1583.006 Acquire Infrastructure: Web Services | The threat actor leveraged legitimate cloud-hosting providers including Amazon S3, Cloudflare R2, Dropbox, GitLab, and Supabase for payload distribution.

Initial Access

• T1566.002 Phishing: Spearphishing Link | Victims received workplace meeting, Zoom, Google Meet, invitation, RSVP, PDF, and Adobe-themed phishing emails containing links that redirected to malicious payload download locations.
• T1204 User Execution | Victims downloaded and executed a masqueraded MSP360 installer distributed under deceptive filenames designed to resemble legitimate business documents and software.

Execution

• T1059.001 Command and Scripting Interpreter: PowerShell | The MSP360 RMM.Agent.exe service launched PowerShell to download and install ConnectWise ScreenConnect.
• T1059.003 Command and Scripting Interpreter: Windows Command Shell | Installation workflows used cmd.exe for logging, prerequisite checks, file management, and installation-related tasks.
• T1218.007 System Binary Proxy Execution: Msiexec | The downloaded ClientSetup.msi package was installed silently using msiexec.exe /qn.

Persistence

• T1543.003 Create or Modify System Process: Windows Service | MSP360 and ScreenConnect were installed as Windows services to establish persistent access.
• T1547.001 Boot or Logon Autostart Execution: Registry Run Keys / Startup Folder | MSP360 created registry Run entries to automatically launch tray application components at user logon.

Defense Evasion

• T1036 Masquerading | The actor distributed legitimate MSP360 software under filenames designed to resemble meeting applications, invitations, PDFs, and business documents.
• T1036.005 Match Legitimate Name or Location | Follow-on tooling used filenames that closely resembled legitimate Windows, Microsoft Defender, security, and Phone Link applications.
• T1112 Modify Registry | MSP360 and ScreenConnect modified registry locations associated with services, persistence, credential provider components, protocol handlers, and uninstall entries.

Command and Control

• T1219 Remote Access Software | The threat actor abused legitimate remote administration software including MSP360 RMM and ConnectWise ScreenConnect to maintain access to victim systems.
• T1105 Ingress Tool Transfer | MSP360 downloaded ScreenConnect, while the threat actor’s use of ScreenConnect was subsequently used to transfer and execute additional tooling on compromised endpoints.
• T1071.001 Application Layer Protocol: Web Protocols | PowerShell and ScreenConnect communicated with actor-controlled infrastructure over HTTP/HTTPS.
• T1573 Encrypted Channel | Payload retrieval and remote access communications occurred over encrypted network channels.
• T1102 Web Service | Multiple cloud-hosted web services were used throughout the delivery and command-and-control infrastructure.

Discovery

• T1082 System Information Discovery | The installer enumerated installed .NET runtimes using dotnet –list-runtimes during the installation workflow.

Collection

• T1005 Data from Local System | Additional tooling delivered through ScreenConnect was observed in post-compromise activity and used to collect information from victim devices.

Indicators of compromise (IOCs)

Observed indicators associated with this campaign are listed below.

Learn More

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Review our documentation to learn more about our real-time protection capabilities and see how to enable them within your organization.  

• Learn more about securing Copilot Studio agents with Microsoft Defender 
• Evaluate your AI readiness with our latest Zero Trust for AI workshop.
• Microsoft 365 Copilot AI security documentation
• How Microsoft discovers and mitigates evolving attacks against AI guardrails
• Prompt injection protection in Microsoft Defender for Office 365 – official documentation of the prompt injection protection in Microsoft Defender for Office 365.
• How Microsoft discovers and mitigates evolving attacks against AI guardrails | Microsoft Security Blog
• Manipulating AI memory for profit: The rise of AI Recommendation Poisoning | Microsoft Security Blog – a related example of an AI-era technique observed in email traffic
• Defending the inbox against prompt injection attacks | Microsoft Defender for Office 365 Blog – feature announcement introducing prompt injection protection in Microsoft Defender for Office 365.
• Learn how Microsoft is reimagining the SOC for the agentic era with ISOC in Microsoft Defender

The post Phishing Abuses RMM Tools for Persistent Access appeared first on Microsoft Security Blog.

Microsoft Threat Intelligence has observed a TerminalFix campaign, a variant of ClickFix, targeting organizations across multiple industries. The campaign uses compromised websites to display a fake Cloudflare CAPTCHA verification overlay that tricks users into copying and executing a malicious PowerShell command. While traditional ClickFix campaigns direct victims to the Windows Run dialog, TerminalFix campaigns apply the same technique but direct users to Windows Terminal or PowerShell instead, increasing the likelihood that complex, multi-line scripts execute successfully. Unlike earlier ClickFix variants that typically deliver a single infostealer, this TerminalFix campaign deploys a sophisticated multi-stage attack chain that combines DLL sideloading, steganographic payload extraction, extensive Active Directory reconnaissance, and a custom reverse-tunnel implant – giving the attacker persistent, network-level proxy access through the compromised host.

Once executed, the PowerShell command masquerades as a Cloudflare verification process while downloading a ZIP archive containing a legitimate binary (LockScreenContentServer.exe) and a malicious DLL (dui70.dll) used for sideloading. The sideloaded DLL drives an elaborate second stage: downloading payloads concealed inside PNG images using steganography, establishing dual persistence through Registry Run keys and scheduled tasks, conducting thorough domain reconnaissance—including domain trust enumeration, domain admin discovery, Active Directory user description harvesting, and targeted server ping sweeps—and ultimately deploying a Python-based reverse-tunnel C2 implant that tunnels arbitrary TCP traffic back through an encrypted WebSocket channel to attacker infrastructure.

This type of intrusion is particularly dangerous because it provides attackers with direct access to an organization’s internal network through the reverse tunnel. The observed reconnaissance and reverse-tunnel capability could enable an attacker to identify and reach additional systems from a compromised host. Microsoft did not observe the downstream actions described below in the analyzed chain. Organizations should treat affected devices as potential network pivot points and investigate for lateral movement and credential exposure. In the hands-on-keyboard phase that typically follows, attackers leverage this access to escalate privileges, disable security controls, exfiltrate sensitive data, and deploy ransomware across the organization. The combination of stealth techniques (DLL sideloading, steganography, hidden folders) and persistent network access make this TerminalFix campaign a serious threat to enterprise environments.

In this blog, we share our detailed analysis of the TerminalFix attack chain – from initial compromise through network tunneling—along with indicators of compromise, detection details, and hunting guidance to help defenders identify and respond to this threat.

Attack chain overview

The TerminalFix campaign follows a multi-stage attack chain that progresses from social engineering through payload delivery, persistence, reconnaissance, and ultimately network tunneling:

1. Initial access via compromised website – A compromised website displays a fake Cloudflare Turnstile CAPTCHA verification overlay. The user is instructed to copy and paste a “verification” command.

2. PowerShell execution – The pasted command runs a disguised PowerShell script that downloads a ZIP archive from attacker infrastructure, extracts it to C:\ProgramData, and silently launches a batch file.

3. DLL sideloading — The batch file executes LockScreenContentServer.exe, a signed legitimate binary, which automatically loads the co-located malicious dui70.dll.

4. Steganographic payload retrieval – The sideloaded DLL executes PowerShell that downloads PNG images from attacker domains, extracts embedded executables and DLL fragments hidden within pixel data, and reassembles them on disk.

5. Persistence – The malware establishes persistence through both HKCU\…\Run registry keys and scheduled tasks that re-execute LockScreenContentServer.exe every 60 minutes.

6. Reconnaissance – Extensive domain discovery is performed: domain trust enumeration, domain admin group membership, Active Directory computer and user enumeration, targeted server pinging, and system information collection in both English and Spanish locales.

7. Command execution loop – A persistent PowerShell file-watch loop monitors a text file for new commands, executes them via Invoke-Expression, and writes results to an output file-, creating a primitive but effective asynchronous command shell.

8. Reverse tunnel deployment – A Python runtime and a custom client.py tunneling implant are downloaded and launched via pythonw.exe with no visible window, establishing a reverse WebSocket tunnel to gitnow[.]dev:443 that gives the attacker full SOCKS-style TCP proxy access through the victim’s network.

Attack chain

1. Initial access: Fake CAPTCHA and the TerminalFix lure

The attack begins when a user visits a compromised website that displays a fake Cloudflare Turnstile verification overlay. The original page is briefly displayed before being replaced by a convincing Cloudflare Turnstile verification overlay. This overlay spoofs the Cloudflare CAPTCHA interface, complete with the Cloudflare logo, “Verify you are human” checkbox, and a spinner animation, tricking users into believing they must complete a verification step to access the site.

When the user interacts with the fake verification prompt, a malicious PowerShell command is silently copied to their clipboard. The on-screen instructions then guide the user to open Windows Terminal or PowerShell and paste the command. The command is carefully crafted to appear legitimate by printing reassuring Cloudflare-themed status messages in color-coded terminal output:

The command performs the following actions:

• Clears the terminal and prints a fake “Starting Cloudflare verification…” message in cyan color formatted
• Downloads a ZIP archive from the attacker’s infrastructure using a custom User-Agent header
• Extracts the archive to C:\ProgramData\f47f2a8c21c9df4e
• Launches a batch file (1.bat) that executes LockScreenContentServer.exe silently in the background
• Prints a convincing “I am not a robot – Cloudflare ID: f47f2a8c21c9df4e” confirmation message in green text

2. Payload delivery: DLL sideloading via LockScreenContentServer.exe

The downloaded ZIP archive (SHA-256: 18c2090e8a0ae0568af9b87e59eaf8270f23d2909600ed9db91a9444fd8b278f) contains two files:

LockScreenContentServer.exe is a legitimate, signed binary that has a static import dependency on dui70.dll, the Windows DirectUI Engine.

Here is the example view of LockScreenContentServer application importing dui70.dll function:

The attacker abuses this dependency by dropping a malicious dui70.dll alongside the executable. Because the Windows loader resolves the application directory before the System32 directory, the planted DLL is loaded in place of the legitimate one, a technique known as DLL sideloading (T1574.001). Execution therefore begins inside a trusted, signed process, allowing the attacker to inherit its reputation and evade controls that key on process identity.

The malicious dui70.dll embeds a heavily obfuscated payload in its resource section. On load, the DLL’s initialization path retrieves this resource, decodes it entirely in memory, and transfers execution to it, staging the next phase of the infection without ever writing the decoded payload to disk (Figures 5 and 6).

3. Second-stage delivery: Steganography and image-based payload extraction

Once sideloaded, the malicious DLL launches an elaborate PowerShell script that retrieves additional payloads concealed within PNG image files, a technique known as steganography. The script downloads three images from attacker-controlled domains, extracts binary data encoded in pixel values, and reassembles the components on disk.

Content domains

The script uses a failover mechanism across two domains:

Steganographic extraction

The Extract-RawFileFromImage function reads each pixel’s RGBA channels and reconstructs an embedded binary. The first 8 bytes encode the payload length as a 64-bit integer, and the remaining bytes contain the file data:

The script downloads three images via POST requests to the content domains, extracts the executable from the first image, extracts two halves of the DLL from the second and third images, and concatenates the DLL fragments:

Encoding payload data in PNG files can make file type and content inspection more difficult. Splitting the DLL across two images further obscures the complete payload in transit, the payloads aren’t recognizable as executables in transit, and splitting the DLL across two images further complicates detection. After extraction, the source images are deleted to reduce forensic artifacts.

4. Persistence mechanisms

The TerminalFix campaign establishes redundant persistence through two independent mechanisms, ensuring the payload survives reboots and re-executes on a recurring schedule. The dropped batch script takes the payload path as a command-line argument, validates that the file exists, and then configures both mechanisms under the same masquerading name LockScreenContentServer_MuODG5yBM chosen to blend in with the legitimate Windows Lock Screen component abused earlier in the chain.

Registry Run key

The malware creates a Run key entry with a randomized service-like name:

Scheduled task

A scheduled task ensures the malware re-executes every 60 minutes:

Folder hiding

The malware directory is hidden using system and hidden file attributes:

5. Reconnaissance and domain discovery

After establishing persistence, the sideloaded malware conducts extensive reconnaissance of the victim’s environment. This activity is consistent with a hands-on-keyboard operator or an automated pre-assessment script designed to evaluate whether the compromised host is a valuable target – particularly whether it is domain-joined and near high-value infrastructure.

System information collection

The attacker collects system metadata and the script includes English, Spanish, and German locale variants, indicating an attempt to operate across systems configured in multiple languages:

Active Directory enumeration

The malware performs domain trust discovery, domain admin enumeration, and Active Directory user and computer searches:

Infrastructure probing

The malware systematically pings named servers to map the internal network topology:

The observed names correspond to common infrastructure roles, including domain controllers, databases, backup, gateways, and mail systems. This probing could help an attacker identify accessible target systems for follow-on activity.

6. Asynchronous command execution loop

The malware deploys a persistent PowerShell file-watch loop that creates an asynchronous command-and-control channel through the local filesystem. This mechanism monitors a “watch” file for changes, executes its contents via Invoke-Expression, and writes results to an output file:

This loop provides the attacker with a way to execute arbitrary PowerShell commands by writing them to the watched text file. The output is captured to a separate file, which the attacker can read back through the reverse tunnel. This decoupled execution model allows the attacker to issue commands asynchronously and retrieve results at their convenience.

7. Reverse tunnel deployment: The custom Python-based tunneling implant

The most significant post-compromise capability observed is the deployment of a custom Python-based reverse-tunnel implant. The attacker brings their own interpreter: an unmodified, signed embeddable Python runtime pulled directly from the official python.org distribution. The malicious logic lives entirely in the accompanying client.py, giving the operator a portable, cross-version-tolerant execution environment that inherits the trust of a legitimate open-source runtime.

The deployment is orchestrated in PowerShell. It removes any prior install directory, extracts the implant kit, downloads the embeddable Python 3.14.5 archive over TLS 1.2, unpacks it into the same directory, and launches the tunnel with no visible window via pythonw.exe:

Tunneling implant analysis

The client.py script is a compact but full-featured reverse tunnel. It dials outbound to the C2 over TLS/443, upgrades the session to a WebSocket, and uses that channel to relay arbitrary TCP connections on behalf of the operator. On the wire, the traffic is indistinguishable from an ordinary encrypted web session to a single destination

The tunnel carries a lightweight custom protocol with eight message types spanning implant identification, connection setup, data relay, keepalive, and remote termination:

Turning the victim into a network pivot: The implant’s SOCKS5-style address parsing enables the C2 server to reach any host visible from the victim’s network. Combined with the reconnaissance data gathered earlier (domain controllers, SQL servers, backup servers, gateway), this turns the compromised machine into a full network pivot point:

The choice to launch with pythonw.exe (no visible window Python interpreter) means no console window is visible to the user. Combined with DEBUG = False by default and all logging going to stderr, the implant operates completely silently.

Mitigation and protection guidance

Microsoft recommends the following mitigations to reduce the impact of this threat:

• Restrict PowerShell and Run dialog execution – Use AppLocker, Application Control for Windows, or Group Policy to restrict PowerShell execution for standard users.
• Consider blocking or auditing the Windows Run dialog (Win+R) where it is not required for daily work.
• Monitor for DLL sideloading indicators — Alert on LockScreenContentServer.exe executing from non-standard paths (anything other than C:\Windows\SystemApps). Use the LockScreenContentServer.exe sideloading from non-standard paths advanced hunting query provided below to identify this activity across your environment.
• Educate users about ClickFix tactics – Train employees to recognize fake CAPTCHA verification pages that instruct them to paste commands into Terminal or the Run dialog.
• Investigate affected hosts thoroughly – Organizations that find indicators of this campaign should assume the attacker has network-level access through the compromised host. Credential rotation should be prioritized for any credentials accessible from the affected machine, including domain admin accounts if the host was domain-joined.
• Check your Microsoft 365 email filtering settings to ensure spoofed emails, spam, and emails with malware are blocked. Use Microsoft Defender for Office 365 for enhanced phishing protection and coverage against new threats and polymorphic variants. Configure Defender for Office 365 to recheck links on click and delete sent mail in response to newly acquired threat intelligence. Turn on safe attachments policies to check attachments to inbound email.
• Consider using enterprise-managed browsers, which provide multiple security features including security update requirements and data compliance policies.
• Block web pages from automatically running Flash plugins.
• Enable network protection and web protection in Microsoft Defender for Endpoint to safeguard against malicious sites and internet-based threats.
• Encourage users to use Microsoft Edge and other web browsers that support Microsoft Defender SmartScreen, which identifies and blocks malicious websites, including phishing sites, scam sites, and sites that host malware.
• Turn on cloud-delivered protection in Microsoft Defender Antivirus, or the equivalent for your antivirus product, to cover rapidly evolving attacker tools and techniques. Cloud-based machine learning protections block a majority of new and unknown variants.
• Enable PowerShell script block logging to detect and analyze obfuscated or encoded commands, providing visibility into malicious script execution that might otherwise evade traditional logging.
• Enforce use of PowerShell Constrained Language Mode where possible, in addition to use of execution policies such as setting AllSigned or RemoteSigned to help reduce the risk of malicious execution by ensuring only trusted, signed scripts are executed, adding a layer of control.
• Use Group Policy to deploy hardening configurations throughout your environment, if certain features are not necessary:
  • Create an App Control policy that prohibits the launch of native Windows binaries from Run. This can be accomplished by defining a rule based on the specific process that is launching binaries like PowerShell.
  • Configure Windows Terminal access and settings to warn users when the text they’re pasting contains multiple lines.
• Microsoft Defender XDR customers can also implement the following attack surface reduction rules to harden an environment against PowerShell techniques used by threat actors:
  • Block execution of potentially obfuscated scripts
  • Block executable files from running unless they meet a prevalence, age, or trusted list criterion
  • Block JavaScript or VBScript from launching downloaded executable content

Microsoft Defender XDR detections

Microsoft Defender XDR customers can refer to the list of applicable detections below. Microsoft Defender XDR coordinates detection, prevention, investigation, and response across endpoints, identities, email, and apps to provide integrated protection against attacks like the threat discussed in this blog.

Customers with provisioned access can also use Microsoft Security Copilot in Microsoft Defender to investigate and respond to incidents, hunt for threats, and protect their organization with relevant threat intelligence.

Microsoft Security Copilot

Security Copilot customers can use the standalone experience to create their own prompts or run prebuilt promptbooks to automate investigation and response tasks related to this threat. Useful promptbooks for this activity include Incident investigation, Microsoft User analysis, Threat actor profile, Threat Intelligence 360 report based on MDTI intelligence, and Vulnerability impact assessment. Some promptbooks require access to Microsoft Defender XDR, Microsoft Sentinel, or related Microsoft security plugins.

For this campaign, Security Copilot can help analysts summarize affected devices running LockScreenContentServer.exe from non-standard locations, trace the PowerShell steganography extraction chain, and build containment and credential rotation plans for affected domain-joined endpoints.

Threat intelligence reports

Microsoft customers can use Microsoft Defender XDR Threat analytics and related Microsoft threat intelligence reporting to stay current on the malicious activity, indicators, detection coverage, and recommended response actions associated with this compromise. These reports provide investigation context, protection guidance, and updated intelligence that security teams can use to prevent, mitigate, or respond to related activity in customer environments.

Advanced hunting queries

Microsoft Defender XDR customers can run the following advanced hunting queries to find related activity in their networks:

ClickFix PowerShell execution which executes payload

DeviceProcessEvents
| where InitiatingProcessFileName =~ "powershell.exe"
| where FileName =~ "cmd.exe" and ProcessCommandLine has_all (@"\ProgramData\", "1.bat", "LockScreenContentServer.exe")

LockScreenContentServer.exe sideloading from non-standard paths

DeviceImageLoadEvents
| where InitiatingProcessFileName =~ "LockScreenContentServer.exe"
| where FileName =~ "dui70.dll"
| extend path = tostring(parse_path(FolderPath).DirectoryPath)
| where path =~ InitiatingProcessFolderPath
| where not(path has_any (@"\Windows\System32", @"\Windows\SysWOW64", @"\winsxs\", @"\program files", @"\Windows Defender\", @"\Microsoft Security Client\", @"\Program Files\Windows", @"\Program Files\Microsoft", @"\ProgramData\Microsoft\", @"\Microsoft\Windows", @"\amd64_windows-defender-service", @"\Microsoft Defender for Endpoint\"))

Custom reverse tunnel implant execution

DeviceProcessEvents
| where FileName in~ ("pythonw.exe", "python.exe")
| where ProcessCommandLine has_all ("client.py", "--server", "--uuid", “cert.pem”, “gitnow.dev”)

Outbound connections to known C2 domains

DeviceNetworkEvents
| where RemoteUrl has_any ("gitnow.dev", "bestsocialmedianewspapper.com",
                            "offlineupdater.com")
| project Timestamp, DeviceName, RemoteUrl, RemotePort,
          InitiatingProcessFileName

MITRE ATT&CK Techniques observed

The following MITRE ATT&CK mappings reflect behaviors observed during this activity.

Initial Access

• T1189 Drive-by Compromise | A compromised website delivers a fake CAPTCHA overlay.

Execution

• T1059.001 Command and Scripting Interpreter: PowerShell | A malicious PowerShell command is pasted by the user into Terminal.
• T1204.002 User Execution: Malicious File | The user pastes and executes a clipboard-hijacked command.

Persistence

• T1547.001 Boot or Logon Autostart Execution: Registry Run Keys | An HKCU Run key is set to execute LockScreenContentServer.exe.
• T1053.005 Scheduled Task/Job: Scheduled Task | A scheduled task is created to execute every 60 minutes.

Defense Evasion

• T1574.002 Hijack Execution Flow: DLL Side-Loading | Malicious dui70.dll is side-loaded by the legitimate LockScreenContentServer.exe.
• T1027.003 Obfuscated Files or Information: Steganography | Payloads are hidden in PNG image RGBA pixel data.
• T1564.001 Hide Artifacts: Hidden Files and Directories | The attrib +h +s command is applied to the payload directory.
• T1036.005 Masquerading: Match Legitimate Name or Location | The DLL is named dui70.dll to match the legitimate Microsoft DUI framework.

Discovery

• T1018 Remote System Discovery | An ADSI query identifies Windows Server computers and performs a ping sweep.
• T1069.002 Permission Groups Discovery: Domain Groups | The net group “domain admins” /domain command is used for enumeration.
• T1482 Domain Trust Discovery | nltest /domain_trusts and /dclist: are used for domain enumeration.
• T1087.002 Account Discovery: Domain Account | An ADSI searcher enumerates user descriptions.
• T1082 System Information Discovery | systeminfo is used with multilingual findstr filters.

Command and Control

• T1572 Protocol Tunneling | A reverse WebSocket tunnel communicates over TLS with gitnow[.]dev:443.
• T1071.001 Application Layer Protocol: Web Protocols | Command-and-control communication occurs over HTTPS/WebSocket.
• T1105 Ingress Tool Transfer | A Python runtime and implant kit are downloaded and extracted.

Indicators of Compromise (IOCs)

File indicators

Network indicators

Learn more

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The post TerminalFix campaign deploys a reverse tunnel through multistage intrusion appeared first on Microsoft Security Blog.