Virtual Shadows: How Muddled Libra Hijacked VMware vSphere to Breach Corporate Defenses

In the pre-dawn hours of a September morning, a routine security incident response uncovered a digital crime scene hiding in plain sight: a single, suspicious virtual machine quietly running inside a company’s VMware vSphere environment. The culprit? Muddled Libra - also known as Scattered Spider - a cybercrime syndicate infamous for its cunning social engineering and relentless pursuit of financial gain. What investigators found inside this rogue VM offers a rare, step-by-step look into the operational playbook of one of today’s most sophisticated threat actors.

Fast Facts

• Attackers created a rogue VM in VMware vSphere as their main foothold.
• Muddled Libra specializes in social engineering, credential theft, and lateral movement using legitimate tools.
• The group leveraged stolen certificates and SSH tunneling to move stealthily within the victim’s network.
• Critical data - including Active Directory databases and cloud datasets - was exfiltrated via unblocked file-sharing platforms.
• Even endpoint security flagged several attacker tools, revealing the importance of layered defenses.

Inside the Attack: Anatomy of a Digital Heist

The breach began with classic Muddled Libra tactics: social engineering that targeted not just the victim company, but also its outsourced call centers and managed service providers. Once inside, the attackers wasted no time - within two hours, they logged into vSphere and spun up a generically named “New Virtual Machine.” Using a local Administrator account, this VM became their beachhead, allowing them to blend in and operate under the radar.

From this vantage point, the attackers downloaded stolen certificates, forged legitimate-looking network tickets, and established persistence with a covert SSH tunnel using the “Chisel” tool. Their command-and-control traffic ran over port 443 - disguised as ordinary web activity - and persisted for roughly 15 hours.

The next phase was methodical and chillingly efficient. The group powered down two virtualized domain controllers, mounted their disks, and copied out the NTDS.dit database and SYSTEM registry hive - treasure troves of user credentials. Minutes later, decrypted NTLM and Kerberos hashes appeared on the rogue VM’s desktop. With these, the attackers could impersonate nearly anyone in the organization.

Using tools like ADRecon and ADExplorer64, Muddled Libra mapped the network, spotlighting high-value assets such as backup servers, mail systems, and databases. They even researched the company’s business profile to prioritize which data to steal. When it came time to exfiltrate, they experimented with multiple file-sharing sites, probing for a route that bypassed corporate defenses.

Throughout, the attackers “lived off the land,” using built-in Windows tools and legitimate utilities to move laterally (via RDP and PsExec) and escalate access. They even attempted to siphon off entire mailboxes, uploading data to attacker-controlled cloud storage.

Yet, even in this virtual lair, security tools like Microsoft Defender sounded alerts, underscoring the importance of monitoring not just endpoints, but also virtual infrastructure and cloud activity. The incident is a wake-up call: organizations must keep a vigilant eye on unusual VM creation, domain controller shutdowns, and anomalous data access - not just on traditional desktops and servers.

Conclusion: The New Frontline in Cybercrime

The Muddled Libra incident demonstrates that the battleground has shifted. Threat actors now exploit virtual environments and cloud platforms as readily as they do physical endpoints, turning the very tools of digital transformation into attack vectors. To outpace these adversaries, defenders must embrace identity-centric controls, robust monitoring across all layers, and a healthy dose of skepticism toward seemingly routine activity - because in the world of cybercrime, the next rogue VM may already be lurking in plain sight.

WIKICROOK

• vSphere: vSphere is VMware’s platform for managing virtual machines and cloud infrastructure, enabling efficient virtualization, resource optimization, and centralized management.
• Active Directory (AD): Active Directory (AD) is a Microsoft service that centralizes user access, authentication, and security policy management across computer networks.
• NTDS.dit: NTDS.dit is the main database file in Active Directory, storing user accounts, group info, and password hashes for a Windows domain.
• Living off the land: Living Off the Land means attackers use trusted, built-in system tools for malicious purposes, making their activities harder to detect.
• SSH Tunnel: An SSH tunnel is an encrypted channel that securely transmits data between computers, often used to protect sensitive information or bypass restrictions.