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DragonClone is a campaign designation for a China-nexus intrusion set associated with targeted espionage activity against the telecommunications sector in China. The activity has been linked to spearphishing-based initial access using lures themed as internal employee training materials, followed by execution chains that abuse DLL sideloading through legitimate software to launch a customized VELETRIX loader. The loader employs anti-sandbox timing checks, dynamic API resolution, shellcode obfuscation, in-memory decryption, and callback-based execution to evade analysis and defenses. Observed tradecraft includes delivery of a malicious archive, DLL sideloading, staged shellcode execution, encrypted retrieval of a second-stage payload over TCP, and in-memory execution of a packed Golang payload assessed to be consistent with VShell-related reverse-shell functionality. The malware chain uses defense-evasion techniques such as API hashing, unconventional shellcode encoding, and runtime decryption, and supports post-compromise remote access and follow-on operations. Public reporting has associated VELETRIX and likely VShell usage with China-aligned operators. In the observed campaign, DragonClone targeted China Mobile Tietong, a subsidiary of China Mobile, indicating a focus on telecommunications infrastructure and related strategic intelligence collection.
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