Phantom Taurus is a newly identified China-aligned nation-state threat actor engaged in cyber espionage campaigns since at least late 2022, primarily targeting government and telecommunications sectors in Africa, the Middle East, and Asia. The group’s main objectives are to gather intelligence from ministries of foreign affairs, embassies, and military operations, focusing on diplomatic communications and defense-related information. Phantom Taurus employs a custom malware suite named NET-STAR, developed in .NET, which targets IIS web servers through three specialized web-based backdoors: IIServerCore (a fileless modular backdoor supporting in-memory execution and encrypted C2 communications), AssemblyExecuter V1, and AssemblyExecuter V2 (which includes AMSI and ETW evasion capabilities). The malware also features timestomping to evade forensic analysis. Initial access vectors include exploitation of known vulnerabilities in on-premises IIS and Microsoft Exchange servers, notably ProxyLogon and ProxyShell, although the group is expected to evolve its tactics. The threat actor uses shared infrastructure previously linked to other Chinese APT groups but maintains operational compartmentalization. Data exfiltration techniques include executing batch scripts via Windows Management Instrumentation to query SQL Server databases and export results, targeting information related to specific countries. Phantom Taurus’s operations often coincide with major geopolitical and military events, indicating strategic timing. The group’s advanced evasion, persistence, and rapid adaptation of TTPs make it a significant threat to internet-facing servers and sensitive governmental networks.

For European organizations, especially governmental and critical infrastructure entities, Phantom Taurus represents a significant espionage threat. Although current targeting focuses on Africa, the Middle East, and Asia, European ministries of foreign affairs, embassies, and defense-related agencies could be at risk due to similar strategic interests and the widespread use of IIS and Microsoft Exchange servers. Successful compromise could lead to unauthorized access to confidential diplomatic communications, defense intelligence, and sensitive operational data, potentially undermining national security and diplomatic relations. The stealthy, fileless nature of the malware complicates detection and response, increasing the risk of prolonged undetected intrusions. Additionally, the group’s ability to adapt and leverage known vulnerabilities means that unpatched or misconfigured systems are particularly vulnerable. The use of timestomping and AMSI/ETW evasion techniques further hinders forensic investigations and incident response efforts. The potential for data exfiltration and persistent access could facilitate long-term intelligence gathering and influence operations against European targets.

European organizations should implement a multi-layered defense strategy tailored to the specific tactics of Phantom Taurus. First, ensure all IIS and Microsoft Exchange servers are fully patched against known vulnerabilities, including ProxyLogon and ProxyShell, and maintain continuous vulnerability management programs. Deploy advanced endpoint detection and response (EDR) solutions capable of detecting fileless malware and in-memory execution patterns, focusing on .NET-based threats. Monitor Windows Management Instrumentation (WMI) activity for unusual batch script executions, particularly those querying SQL Server databases and exporting data. Implement network segmentation to isolate critical servers and restrict lateral movement. Employ robust logging and anomaly detection on IIS servers to identify suspicious web shell activity and encrypted command-and-control communications. Conduct regular threat hunting exercises focused on timestomping indicators and AMSI/ETW evasion techniques. Enhance user awareness and restrict administrative privileges to limit the impact of potential intrusions. Finally, collaborate with national cybersecurity centers and share threat intelligence to stay informed about evolving TTPs and emerging indicators related to Phantom Taurus.