The Cloak ransomware group emerged in late 2022 and has quickly become a major cybersecurity threat. By targeting small- to medium-sized businesses (SMBs) across Europe and Asia, Cloak has made a significant impact with its advanced and disruptive tactics.
As ransomware attacks grow more sophisticated, understanding groups like Cloak is essential. The stakes are high: disrupted operations, stolen data, and ransom demands reaching millions. Studying Cloak’s methods helps cybersecurity professionals stay ahead of these evolving threats.
The Rise of Cloak Ransomware
Cloak ransomware’s focus on sectors such as healthcare, IT, real estate, and manufacturing has allowed it to exploit organizations with limited resources while staying under the radar of larger-scale investigations. Its operations have included over two dozen known attacks on organizations like Autohaus Ruland Viersen and Dunlop Aircraft Tyres, demonstrating a calculated targeting strategy.
Germany has seen a particularly high concentration of these attacks, likely due to its prominence in manufacturing, healthcare, and IT sectors. These industries are critical yet often resource-constrained when it comes to cybersecurity, making them attractive targets for ransomware groups. Cloak’s methodical focus on these sectors ensures that its attacks cause maximum disruption while exploiting existing vulnerabilities
Delivery Mechanisms
Cloak ransomware uses a multi-faceted approach to infiltrate its targets. By partnering with Initial Access Brokers (IABs), which sell pre-compromised network access, Cloak bypasses traditional entry barriers and focuses on deploying its payload.
Social engineering is another key tactic. Phishing emails, malicious advertising (malvertising), and fake software updates trick victims into granting access. Disguised installers for legitimate programs, such as Microsoft Windows updates, have proven especially effective.
Cloak also exploits unpatched vulnerabilities through drive-by downloads and exploit kits, which silently deliver ransomware when victims visit compromised websites. This combination of technical precision and psychological manipulation makes Cloak’s delivery mechanisms highly effective.
Technical Sophistication
Cloak ransomware demonstrates advanced technical capabilities to maximize its impact while avoiding detection. Privilege escalation allows the ransomware to gain elevated network access, shutting down security processes and backup services to ensure minimal resistance.
A notable tactic is Cloak’s use of virtual hard disks (VHDs) to deliver its payload. Embedding ransomware within a VHD file helps it evade antivirus tools, as the VHD can be quickly detached after completing its tasks, complicating detection.
For encryption, Cloak employs the HC-128 algorithm, a lightweight yet secure method. To speed up the process, it uses intermittent encryption on larger files, rendering them unusable without fully encrypting every byte. These techniques reflect Cloak’s ability to innovate and adapt.
Disruption and Persistence
Cloak ransomware is designed to maximize disruption and ensure persistence. By modifying Windows registry settings, it restricts user actions such as logging off or accessing Task Manager, making recovery more difficult.
It also targets and terminates critical processes related to antivirus software, backup systems, and databases. This crippling of defenses forces victims into a corner, often leaving ransom payments as the only viable option.
To further escalate downtime, Cloak deletes shadow copies, disables recovery tools, and alters system configurations to hinder restoration efforts. These tactics further pressure victims to meet ransom demands.
Extortion Strategies
Cloak’s extortion tactics are aggressive and effective. The ransomware deploys ransom notes as text files and desktop wallpapers, keeping the attack at the forefront of victims’ minds.
Its coercion techniques yield exceptionally high payment rates—between 91% and 96%. Victims face threats of permanent data loss or public exposure of sensitive information, especially damaging for organizations in regulated industries. This often leaves paying the ransom as the only viable option.
To amplify its leverage, Cloak uses data leak platforms to publish stolen information if victims refuse to comply. This dual strategy of encryption and public shaming reinforces Cloak’s effectiveness as an extortionist.
Connections and Implications
Connections to the GoodDay ransomware operation highlight Cloak’s role within a broader ransomware ecosystem. "Good Day is a variant of the ARCrypter ransomware family that emerged in May 2023, and it utilizes a shared data leak platform with Cloak, indicating potential collaboration or operational overlap in their extortion campaigns,” said Anthony Freed, director of research at Halcyon. “This association underscores Cloak's expanding influence and its ability to leverage advanced techniques, further solidifying its position as a significant and adaptable threat within the evolving ransomware ecosystem."
This relationship reflects a troubling trend: the rapid evolution and cross-pollination of techniques among threat actors. For cybersecurity professionals, these connections complicate attribution and mitigation. Addressing one group often means contending with an entire ecosystem of related operations. Cloak’s emergence underscores the need for a more holistic approach to combating ransomware.
Countermeasures and Defense
Addressing ransomware threats like Cloak demands sophisticated technology and forward-thinking strategies. Halcyon provides solutions such as endpoint protection, automated rollback features, and tools that detect ransomware activity before execution. These measures help organizations minimize damage and recover faster.
Best practices also play a crucial role. Regular software updates and patching close common vulnerabilities, while employee training reduces susceptibility to phishing and social engineering attacks. Robust backup strategies ensure critical data can be restored without paying a ransom, and multi-factor authentication (MFA) adds an extra layer of security. Finally, an incident response plan ensures timely and organized actions in the event of an attack.
Building Resilience Against Ransomware
Cloak ransomware highlights the complexity and evolving tactics of today’s cyber threats. From its advanced delivery mechanisms to its disruptive strategies and ties to other operations like GoodDay, Cloak highlights the interconnected and evolving nature of ransomware.
Organizations must adapt to combat these threats. By adopting strong security measures and fostering a culture of awareness, businesses can better protect themselves in a constantly evolving threat landscape. Gaining insight into the methods used by groups like Cloak lays the groundwork for creating stronger defenses against future attacks.
