This post is authored by Andrea Allievi and Holger Unterbrink

Executive Summary

Ransomware is malicious software that is designed to hold users' files (such as photos, documents, and music) for ransom by encrypting their contents and demanding the user pay a fee to decrypt their files. Typically, users are exposed to ransomware via email phishing campaigns and exploit kits. TeslaCrypt is one well-known ransomware variant, infecting many victims worldwide. It is in the top 5 of ransomware we see most often in our analysis systems. The core functionality of TeslaCrypt 3 remains the same as it continues to encrypt users' files and then presents a message demanding the user to pay a ransom.

While the Information Security community has responded to the ransomware threat by disrupting distribution mechanisms and developing better detection methods, adversaries realize they must also continue to adapt and evolve their capabilities. Unfortunately, this has lead adversaries to iterating and improving upon previous releases of TelsaCrypt, leading to the release of TelsaCrypt 3. In response to this latest TeslaCrypt variant which is compromising users, Talos reversed engineered TeslaCrypt 3 to better understand its functionality, how it works, and what's changed since the last release.

The former variant had a weakness in its way to store the encryption key, which enabled researchers to provide a tool for decryption of the files encrypted by TeslaCrypt [1]. Unfortunately, so far we are not aware of any tool which can do the same for this variant of TeslaCrypt.

This analysis gives an overview about the encryption algorithm used by TeslaCrypt 3.0.1. which is the latest as of the writing of this article. To improve readability, we will refer to this as TeslaCrypt 3 for the remainder of the blog. We will explain the cryptographic details in a way that they can be understood using high school mathematics. Nevertheless, expect a tough cryptographic journey.

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