The latest variants of Kraken have thrown up innovations in black hat stealth technology that are making botnets spawned by the malware harder to detect and dismantle.

Analysis of the source code of the new variant of the Kraken (AKA Bobax) bot by Australian anti-virus firm PC Tools has revealed a domain name generation algorithm designed to allow infected machines to search for possible control servers, rather than relying on a single server that can more easily be dismantled by security researchers.

In addition, compromised nodes speak to a control server using HTTP traffic instead of the more traditional approach of using IRC channels. IRC channel traffic is more obviously suspicious. Data sent between compromised machines and control servers is encrypted and features randomly generated headers in a bid to further disguise dodgy communications, PC Tools explains.

In order to evade host intrusion prevention systems, such as firewalls, the new variant of Kraken 'talks' to its control centres via HTTP (the 'language' that web browsers use to talk to websites), using pseudo-random dynamic DNS names, with a variable length from seven to 12 characters, followed with one of the domain suffixes: dyndns.org, yi.org, mooo.com, dynserv.com, com, cc or net. The commands and data that the bot exchanges with the control centres is encrypted and also uses randomly generated 'bogus' headers to stay hidden under the firewall radar.

Using this approach the Kraken bot calculates the likely coordinates of its control server, without knowing where it is. PC Tools likens the approach to a lost sheep trying to locate its shepherd.

PC Tools reckons the latest variants of Kraken were distributed via MSN Messenger. It uses a random word generating engine to vary the name of infectious files prospective marks are invited to open, a feature designed to confuse spam filters.

The Australian information security firm reports that it detected infections by the latest variant Kraken bot across the world over the last week or so. Further technical analysis of the malware, and its underpinning algorithms, can be found here.

Kraken rose to prominence amid reports earlier this month that it had outstripped the Storm botnet in the number of compromised PCs it controlled. Security researchers are split over whether the malware agent itself is new on the scene or not, as well as the strength of the zombie army it commands. ®