CastleRAT

Dead-drop command-and-control went commodity: three of four new entrants on Red Canary's monthly list resolve their C2 from a dead drop, two of them from a public blockchain, and the fourth is a GUI for Entra ID device-code phishing

Red Canary's monthly threat round-up, published 2026-08-20 against July 2026 telemetry, is useful here not for its rankings but for what the new arrivals have in common: three of the four resolve their command-and-control address from a dead drop rather than from a hardcoded domain or IP, and two of those read that dead drop off a public blockchain (Red Canary, 2026-08-20). The technique, querying a smart contract whose stored value is the current C2 URL, which Red Canary calls EtherHiding and dates to first reporting in 2023; has been documented for a while; what this round-up records is its arrival in commodity tooling, Red Canary counts three of its top ten using it this month, two of them new arrivals.

The mechanics are worth stating precisely because they determine what a defender can and cannot block. Phexia, a macOS remote-access tool and stealer delivered through malicious copy-and-paste lures, queries public Polygon RPC endpoints for a smart contract's value, decodes the ABI-encoded response to extract a URL, posts to it and pipes the reply into osascript; it keeps Telegram and Steam profiles as redundant dead-drop channels and persists with a LaunchAgent that sets both KeepAlive and RunAtLoad. EtherRAT is "a Node.js-based remote access trojan observed targeting Windows workstations via social engineering and Linux servers via exploitation of server-side vulnerabilities", polling one or more public Ethereum RPC endpoints for a C2 URL held at a predefined contract address, with modules for credential theft, lateral movement and web-server hijacking. CastleRAT resolves its dead drop through steamcommunity.com or adversary-controlled domains. Red Canary's own summary of why this matters operationally: "The technique makes traditional C2 blocking challenging, since the URL can be updated dynamically by adversaries", the operator rewrites one contract value and the change propagates to every installation without redistributing the malware.

The fourth entrant is a different problem. GraphSpy is an open-source initial-access and post-exploitation tool for Entra ID and Microsoft 365 that, in Red Canary's words, "runs a local web server that presents a browser-based GUI, which enables less technical adversaries to engage in Entra ID attacks". It centralises device-code phishing, primary refresh token theft and abuse, Windows Hello for Business key registration, MFA method manipulation, and exfiltration from SharePoint, OneDrive, Outlook and Teams. Red Canary notes it is the third device-code phishing tool to reach its top ten in 2026, after GraphRunner in May and Kali365 in June, three separate toolkits in four months packaging the same identity attack behind progressively lower skill requirements.

Detection concepts, telemetry class first. For the dead-drop families the signal is in egress telemetry: an outbound HTTPS session from an endpoint or server to a public blockchain RPC endpoint, made by a process that has no business speaking to one; the request itself is ordinary-looking JSON-RPC to a widely used, reputable host, so the discriminator is the process and the host role, not the destination's reputation. On macOS, correlate it with process-lineage telemetry showing osascript executing content received from a network read, and with persistence artifacts; a newly written LaunchAgent whose program arguments carry an encoded payload. For GraphSpy the surface is identity telemetry rather than endpoint: device-code authentication events for users and locations that have no workflow requiring that flow, primary refresh token issuance followed by access from an unfamiliar device, and new Windows Hello for Business key or MFA method registration on an account that did not request it. Red Canary's own mitigation for the device-code half is to revoke the affected user's refresh tokens and active sessions, reset credentials, force re-authentication, and restrict the device-code flow through Conditional Access policies "for users and locations that do not require it".