Masquerading occurs when the name or location of an executable, legitimate or malicious, is manipulated or abused for the sake of evading defenses and observation. Several different variations of this technique have been observed.
One variant is for an executable to be placed in a commonly trusted directory or given the name of a legitimate, trusted program. Alternatively, the filename given may be a close approximation of legitimate programs or something innocuous. An example of this is when a common system utility or program is moved and renamed to avoid detection based on its usage. This is done to bypass tools that trust executables by relying on file name or path, as well as to deceive defenders and system administrators into thinking a file is benign by associating the name with something that is thought to be legitimate.
A third variant uses the right-to-left override (RTLO or RLO) character (U+202E) as a means of tricking a user into executing what they think is a benign file type but is actually executable code. RTLO is a non-printing character that causes the text that follows it to be displayed in reverse. For example, a Windows screensaver file named
March 25 \u202Excod.scr will display as
photo_high_re\u202Egnp.js will be displayed as
photo_high_resj.png. A common use of this technique is with spearphishing attachments since it can trick both end users and defenders if they are not aware of how their tools display and render the RTLO character. Use of the RTLO character has been seen in many targeted intrusion attempts and criminal activity. RTLO can be used in the Windows Registry as well, where regedit.exe displays the reversed characters but the command line tool reg.exe does not by default.
In another variation of this technique, an adversary may use a renamed copy of a legitimate utility, such as rundll32.exe.  An alternative case occurs when a legitimate utility is moved to a different directory and also renamed to avoid detections based on system utilities executing from non-standard paths. 
An example of abuse of trusted locations in Windows would be the
C:\Windows\System32 directory. Examples of trusted binary names that can be given to malicious binares include "explorer.exe" and "svchost.exe".
Another variation of this technique includes malicious binaries changing the name of their running process to that of a trusted or benign process, after they have been launched as opposed to before. 
APT32 has used hidden or non-printing characters to help masquerade file names on a system, such as appending a Unicode no-break space character to a legitimate service name. They have also used by moving and renaming pubprn.vbs to a .txt file to avoid detection. Additionally, the group has renamed a NetCat binary to kb-10233.exe to masquerade as a Windows update.
The CozyCar dropper has masqueraded a copy of the infected system's rundll32.exe executable that was moved to the malware's install directory and renamed according to a predefined configuration file.
OwaAuth uses the filename owaauth.dll, which is a legitimate file that normally resides in
PLATINUM has renamed rar.exe to avoid detection.
New services created by RawPOS are made to appear like legitimate Windows services, with names such as "Windows Management Help Service", "Microsoft Support", and "Windows Advanced Task Manager".
The Remsec loader implements itself with the name Security Support Provider, a legitimate Windows function. Various Remsec .exe files mimic legitimate file names used by Microsoft, Symantec, Kaspersky, Hewlett-Packard, and VMWare. Remsec also disguised malicious modules using similar filenames as custom network encryption software on victims.
Shamoon creates a new service named "ntssrv" that attempts to appear legitimate; the service's display name is "Microsoft Network Realtime Inspection Service" and its description is "Helps guard against time change attempts targeting known and newly discovered vulnerabilities in network time protocols."
To establish persistence, SslMM identifies the Start Menu Startup directory and drops a link to its own executable disguised as an "Office Start," "Yahoo Talk," "MSN Gaming Z0ne," or "MSN Talk" shortcut.
Some Volgmer variants add new services with display names generated by a list of hard-coded strings such as Application, Background, Security, and Windows, presumably as a way to masquerade as a legitimate service.
When creating security rules, avoid exclusions based on file name or file path. Require signed binaries. Use file system access controls to protect folders such as C:\Windows\System32. Use tools that restrict program execution via whitelisting by attributes other than file name.
Identify potentially malicious software that may look like a legitimate program based on name and location, and audit and/or block it by using whitelisting  tools like AppLocker   or Software Restriction Policies  where appropriate. 
Collect file hashes; file names that do not match their expected hash are suspect. Perform file monitoring; files with known names but in unusual locations are suspect. Likewise, files that are modified outside of an update or patch are suspect.
If file names are mismatched between the file name on disk and that of the binary's PE metadata, this is a likely indicator that a binary was renamed after it was compiled. Collecting and comparing disk and resource filenames for binaries by looking to see if the InternalName, OriginalFilename, and/or ProductName match what is expected could provide useful leads, but may not always be indicative of malicious activity.  Do not focus on the possible names a file could have, but instead on the command-line arguments that are known to be used and are distinct because it will have a better rate of detection.
For RTLO, detection methods should include looking for common formats of RTLO characters within filenames such as "\u202E", "[U+202E]", and "%E2%80%AE". Defenders should also check their analysis tools to ensure they do not interpret the RTLO character and instead print the true name of the a file containing it.
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