SquidLoader: The New Evasive Malware

A new loader called SquidLoader has surfaced in the wild and quickly earned a reputation for being stealthy, adaptive, and dangerous. First reported by LevelBlue Labs in mid-2024 and followed by multiple vendor advisories, SquidLoader is a targeted loader used in phishing campaigns that ultimately deliver powerful post-exploitation tools (notably Cobalt Strike). Recent activity shows it’s evolving and being used against financial institutions in the Hong Kong / APAC region- making it a current threat that security teams should prioritize.

What is SquidLoader?

A loader is a lightweight malware component whose primary job is to fetch and execute a secondary payload. SquidLoader behaves as a highly evasive loader; it avoids detection by obfuscating strings and configuration, using indirect or dynamic API calls, and performing runtime checks that frustrate static and dynamic analysis. The end goal observed in multiple reports has been the deployment of a Cobalt Strike Beacon, and follow on data theft or extortion.

Why does SquidLoader stand out as a high risk threat?

• Advanced anti-analysis techniques - SquidLoader intentionally breaks or evades sandboxes and debuggers (timing checks, environment checks, and automated detection and researcher analysis are difficult.

• Near-zero detection in some samples - Recent samples analyzed by threat researchers showed extremely low detection rates on services at the time of disclosure, indicating effective obfuscation and novelty.

• Targeted phishing delivery - Attackers use tailored email attachments to reach specific organizations and employees, increasing the chance of successful execution.

• Modular, weaponized ecosystem- As a loader, SquidLoader’s value is that it can deliver different second-stage payloads - from RATs to ransomware loaders, depending on the operator’s intent.

SquidLoader - Typical five-stage infection chain

1. Spear-phishing email

Attackers craft highly targeted emails aimed at specific individuals within the organization, often impersonating trusted partners, suppliers, or internal teams. The content is tailored to the target’s role, location, or current projects, increasing the likelihood of the recipient opening the attachment. These emails may use urgent or enticing subject lines to pressure quick action. 

2. Password-protected RAR archive

The phishing email typically contains a password-protected RAR file. The password, provided in the email body, serves a dual purpose: bypassing automated email scanning tools that can’t open encrypted attachments and creating a false sense of legitimacy for the user (“It must be safe if it’s password-protected”).

3. Malicious PE binary

Once the RAR file is extracted, it reveals a malicious Portable Executable (PE) file, often disguised as a legitimate document or installer (e.g., using misleading icons or filenames). The user is tricked into launching this file, believing it to be safe, which begins the infection process.

4. SquidLoader execution

The malicious PE is in fact the SquidLoader component. Upon execution, it performs multiple anti-analysis steps, such as checking for virtual machines, debuggers, or sandbox environments, to evade detection. It also uses indirect API calls, string obfuscation, and in-memory unpacking to avoid static signature-based detection. The loader then connects to its command-and-control (C2) server to retrieve further instructions.

5. Cobalt Strike Beacon deployment

SquidLoader’s primary payload is often the Cobalt Strike Beacon, a post-exploitation tool that provides attackers with persistent remote access. Once deployed, the Beacon enables advanced capabilities including privilege escalation, credential dumping, lateral movement, and stealthy data exfiltration. This phase marks the beginning of a deeper compromise that can lead to ransomware deployment or long-term espionage operations.

Practical mitigation - what security teams should do today

Harden email and user controls 

Enforce robust email filtering, attachment sandboxing, and disable macros by policy.

Train users to treat unexpected attachments with suspicion.

Improve endpoint visibility

Ensure EDR solutions are deployed and tuned to detect suspicious loader behaviors (process hollowing, dynamic API resolution, obfuscated loaders). Create rules to flag uncommon parent/child execution flows.

Network monitoring & egress controls

Block known malicious C2 domains/IPs and segment high-risk systems (finance teams, remote workers). Implement strict egress filtering and logging.

Patch and least privilege

Reduce the blast radius by enforcing least-privilege user accounts, removing local admin for day-to-day users, and promptly patching exposed services. 

Threat intelligence ingestion

Subscribe to vendor IoC feeds and automated threat intel. Enrich alerts with context (campaign targeting, actor TTPs).

Incident readiness

Have playbooks for loader/Cobalt Strike incidents: isolate infected hosts, preserve forensic images, rotate credentials, and notify stakeholders and regulators as required. 

Business implications

Loaders like SquidLoader are often the stepping stone to espionage, prolonged data theft, or ransomware. For financial institutions and any organization handling sensitive customer or IP data, a successful loader infiltration can lead to costly investigations, service disruption, and reputational damage. Recent targeting of financial firms in Hong Kong and APAC shows that operators will pivot to profitable verticals. 

Final thoughts - stay proactive

SquidLoader underscores a persistent reality: attackers innovate at the operational level to evade detection, and defenders must respond by improving telemetry, threat intel, and people awareness. If your organization lacks mature EDR, network segmentation, or a tested incident response plan, now is the time to act.

At StrongBox IT, we help organisations perform targeted threat assessments, threat-hunting exercises, and incident readiness drills, including detection engineering for evasive loaders like SquidLoader. If you’d like a quick posture check or a tailored remediation roadmap (StrongShield vulnerability remediation and emergency response), reach out - let’s make sure SquidLoader doesn’t find a foothold in your environment.