There hasn’t been a viral outbreak of this scale for quite some time, Conficker or Downadup as it’s known was only fairly recently discovered (Oct 2008) and has already infected an estimated 9 million machines!

It’s spreading fast though and it auto-updates itself via downloads from random domains making it almost impossible to stop as whatever countermeasures come out, it can just download itself the latest version and bypass them.

It also has multiple infection vectors including traveling via USB drives.

Infections of a worm that spreads through low security networks, memory sticks, and PCs without the latest security updates is “skyrocketing”.

The malicious program, known as Conficker, Downadup, or Kido was first discovered in October 2008. Anti-virus firm F-Secure estimates there are now 8.9m machines infected. Experts warn this figure could be far higher and say users should have up-to-date anti-virus software and install Microsoft’s MS08-067 patch. In its security blog, F-Secure said that the number of infections based on its calculations was “skyrocketing” and that the situation was “getting worse”.

Speaking to the BBC, Graham Cluley, senior technology consultant with anti-virus firm Sophos, said the outbreak was of a scale they had not seen for some time.

The virus targets the services.exe process (Server service) by exploiting the vulnerability associated with the MS08-067 patch.

This was a serious remote execution flaw carried out by making a malformed RPC request, apparently it was reported ‘privately’. But now it seems that perhaps the details of the exploit weren’t that private after all.

According to Microsoft, the worm works by searching for a Windows executable file called “services.exe” and then becomes part of that code.

It then copies itself into the Windows system folder as a random file of a type known as a “dll”. It gives itself a 5-8 character name, such as piftoc.dll, and then modifies the Registry, which lists key Windows settings, to run the infected dll file as a service.

Once the worm is up and running, it creates an HTTP server, resets a machine’s System Restore point (making it far harder to recover the infected system) and then downloads files from the hacker’s web site. Most malware uses one of a handful of sites to download files from, making them fairly easy to locate, target, and shut down. But Conficker does things differently.

It quite advanced even taking system restore out of the picture and downloading new files to update itself and to infect the machine further. It’s sneaky as it downloads from a bunch of seemingly randomly generated URLs making it very difficult to track and stop.

Many machines are infected in China, Brazil, Russia, and India – personally I think this is because piracy is rife in these areas and Microsoft doesn’t allow pirated copies of Windows to use Windows Update (especially with the WGA tool or Windows Genuine Advantage).

Source: BBC News (Thanks Navin)