Threat Advisory

Storm-2603 Uses Velociraptor To Encrypt VMware ESXi And Windows Servers

Threat: Vulnerability
Threat Actor Name: Storm-2603
Targeted Region: Global
Threat Actor Region: China
Targeted Sector: Technology & IT
Criticality: High
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EXECUTIVE SUMMARY:

Ransomware operators have begun leveraging Velociraptor, an open-source digital forensics and incident response tool, to maintain persistent access within compromised environments. This activity is attributed with moderate confidence to the suspected China-based threat actor Storm-2603, based on overlapping tools and tactics. The campaign targeted VMware ESXi virtual machines and Windows servers, deploying multiple ransomware variants including Warlock, LockBit, and Babuk. The initial access vector was not definitively observed, though the victim’s exposure to specific on-premises vulnerabilities increases the likelihood that exploitation of those flaws provided the entry point. The use of a legitimate security tool for malicious purposes represents a significant shift in operational tradecraft, complicating detection efforts for defenders who rely on standard endpoint monitoring.

The actors installed an outdated version of Velociraptor on multiple servers to establish persistence, exploiting a privilege escalation vulnerability that allowed for arbitrary command execution and endpoint takeover. They also used the tool to download and execute a code editor, likely to create a tunnel to an attacker-controlled command-and-control server. To impair defenses, the group modified Active Directory group policy objects to disable real-time protection, behavior monitoring, and file activity monitoring. A fileless PowerShell script served as the primary encryptor, using AES encryption to target a wide range of file extensions across all drives. The actors also conducted data exfiltration using a separate PowerShell script that suppressed progress indicators and included sleep commands to evade sandbox analysis. This script uploaded files to a remote server using concurrent jobs, ensuring the theft of sensitive documents before encryption was fully deployed.[/subscribe_to_unlock_form]

EXECUTIVE SUMMARY:

Ransomware operators have begun leveraging Velociraptor, an open-source digital forensics and incident response tool, to maintain persistent access within compromised environments. This activity is attributed with moderate confidence to the suspected China-based threat actor Storm-2603, based on overlapping tools and tactics. The campaign targeted VMware ESXi virtual machines and Windows servers, deploying multiple ransomware variants including Warlock, LockBit, and Babuk. The initial access vector was not definitively observed, though the victim’s exposure to specific on-premises vulnerabilities increases the likelihood that exploitation of those flaws provided the entry point. The use of a legitimate security tool for malicious purposes represents a significant shift in operational tradecraft, complicating detection efforts for defenders who rely on standard endpoint monitoring.

The actors installed an outdated version of Velociraptor on multiple servers to establish persistence, exploiting a privilege escalation vulnerability that allowed for arbitrary command execution and endpoint takeover. They also used the tool to download and execute a code editor, likely to create a tunnel to an attacker-controlled command-and-control server. To impair defenses, the group modified Active Directory group policy objects to disable real-time protection, behavior monitoring, and file activity monitoring. A fileless PowerShell script served as the primary encryptor, using AES encryption to target a wide range of file extensions across all drives. The actors also conducted data exfiltration using a separate PowerShell script that suppressed progress indicators and included sleep commands to evade sandbox analysis. This script uploaded files to a remote server using concurrent jobs, ensuring the theft of sensitive documents before encryption was fully deployed.[emaillocker id="1283"]

The campaign demonstrates the increasing reliance on commercial and open-source products by ransomware groups to blend in with legitimate security operations. The deployment of multiple ransomware variants in a single attack is highly unusual and serves as a strong indicator for attribution to specific threat actors. The use of Velociraptor for persistence and communication highlights the need for organizations to monitor the behavior of trusted security tools, not just their presence. Defenders should ensure that all security software is kept up to date and that administrative privileges are strictly controlled to prevent the abuse of legitimate utilities for malicious purposes. This trend underscores the evolving nature of ransomware operations and the challenges they pose to traditional detection methods.

RECOMMENDATION:

We recommend you to refer this link: https://msrc.microsoft.com/update-guide/vulnerability/CVE-2025-53770

THREAT PROFILE:

Tactic Technique Id Technique Sub-technique
Resource Development T1584.003 Compromise Infrastructure Virtual Private Server
Execution T1059.001 Command and Scripting Interpreter PowerShell
Persistence T1136 Create Account -
Persistence T1505.006 Server Software Component vSphere Installation Bundles
Privilege Escalation T1098.007 Account Manipulation Additional Local or Domain Groups
Defense Evasion T1484.001 Domain or Tenant Policy Modification Group Policy Modification
Lateral Movement T1021.002 Remote Services SMB/Windows Admin Shares
Collection T1213 Data from Information Repositories -
Exfiltration T1041 Exfiltration Over C2 Channel -
Impact T1486 Data Encrypted for Impact -

MBC MAPPING:

Objective Behavior ID Behavior
Impact E1486 Data Encrypted for Impact
Exfiltration E1020 Automated Exfiltration
Defense Evasion F0004 Disable or Evade Security Tools
Defense Evasion E1112 Modify Registry
Persistence B0022 Remote Access
Command and Control B0030 C2 Communication
Communication Micro-objective C0002 HTTP Communication
Cryptography Micro-objective C0027 Encrypt Data
File System Micro-objective C0052 Writes File
File System Micro-objective C0016 Create File
Execution E1059 Command and Scripting Interpreter
Anti-Behavioral Analysis B0025 Conditional Execution

REFERENCES:

The following reports contain further technical details:

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