Adversaries may abuse Regsvr32.exe to proxy execution of malicious code. Regsvr32.exe is a command-line program used to register and unregister object linking and embedding controls, including dynamic link libraries (DLLs), on Windows systems. The Regsvr32.exe binary may also be signed by Microsoft. 
Malicious usage of Regsvr32.exe may avoid triggering security tools that may not monitor execution of, and modules loaded by, the regsvr32.exe process because of allowlists or false positives from Windows using regsvr32.exe for normal operations. Regsvr32.exe can also be used to specifically bypass application control using functionality to load COM scriptlets to execute DLLs under user permissions. Since Regsvr32.exe is network and proxy aware, the scripts can be loaded by passing a uniform resource locator (URL) to file on an external Web server as an argument during invocation. This method makes no changes to the Registry as the COM object is not actually registered, only executed.  This variation of the technique is often referred to as a "Squiblydoo" and has been used in campaigns targeting governments.  
APT32 created a Scheduled Task/Job that used regsvr32.exe to execute a COM scriptlet that dynamically downloaded a backdoor and injected it into memory. The group has also used regsvr32 to run their backdoor.
|C0022||Operation Dream Job|
Microsoft's Enhanced Mitigation Experience Toolkit (EMET) Attack Surface Reduction (ASR) feature can be used to block regsvr32.exe from being used to bypass application control.  Identify and block potentially malicious software executed through regsvr32 functionality by using application control  tools, like Windows Defender Application Control, AppLocker,   or Software Restriction Policies  where appropriate. 
|ID||Data Source||Data Component||Detects|
Command arguments used before and after the regsvr32.exe invocation may also be useful in determining the origin and purpose of the script or DLL being loaded. 
Monitor DLL/PE file events, specifically creation of these binary files as well as the loading of DLLs into processes. Look for DLLs that are not recognized or not normally loaded into a process.
|DS0029||Network Traffic||Network Connection Creation||
Monitor for newly constructed network connections that are sent or received by untrusted hosts.
Use process monitoring to monitor the execution and arguments of regsvr32.exe. Compare recent invocations of regsvr32.exe with prior history of known good arguments and loaded files to determine anomalous and potentially adversarial activity.
Note: Event IDs are for Sysmon (Event ID 1 - process create) and Windows Security Log (Event ID 4688 - a new process has been created). - Analytic 1 is a more generic analytic that looks for suspicious usage of regsvr32.exe, specifically for cases where regsvr32.exe creates child processes that aren’t itself. It’s not likely that this will result in millions of hits, but it does occur during benign activity so some form of baselining would be necessary for this to be useful as an alerting analytic.- Analytic 2 is around "Squiblydoo", which is a specific usage of regsvr32.exe to load a COM scriptlet directly from the internet and execute it in a way that bypasses application whitelisting. It looks for regsvr32.exe process creation events that load scrobj.dll via the command-line (which executes the COM scriptlet).
Analytic 1 - Generic Regsvr32
Analytic 2 - Squiblydoo