Peeling back Banana RAT. [Research Saturday]

Summary

CyberWire Daily: Peeling back Banana RAT — Research Saturday (June 20, 2026)

Overview

This episode delves into Trend Micro’s in-depth research on the “Banana RAT” campaign from the Brazilian cybercrime cartel Shadow Water 063. Host Dave Buettner interviews Tom Kellerman (VP of AI Security and Threat Research at Trend Micro) to explore the technical elements, criminal sophistication, and broader financial sector implications. The discussion ranges from initial infection vectors and advanced capabilities of Banana RAT to wider trends in banking fraud, the intersection of Brazilian and Russian cybercrime, and practical defense recommendations for today’s evolving threat landscape.

---

Key Discussion Points & Insights

1. Shadow Water 063 & Banana RAT Unveiled

• Cartel Background:
  • Shadow Water 063 is part of a well-established Brazilian cybercrime cartel ecosystem, specifically targeting financial institutions and demonstrating growing technical sophistication.
  • Quote: “We've been following some of the significant Brazilian cybercrime cartels for a while [...] Shadow Water 63 is one of them. And as a result, we recognize this as a very elegant payload which had the capacity to bypass bank security mechanisms as well as payment system mechanisms.” — Tom Kellerman [02:03]
• Unique Research Perspective:
  • Trend Micro’s global MDR and incident response allowed visibility into both attacker infrastructure and victim endpoints, a rare “full spectrum” view. [03:02]

2. Technical Deep Dive: How Banana RAT Works

• Initial Access & Delivery (WhatsApp & Email Phishing):
  • Targets receive malicious links over WhatsApp or email, leading to the download of a polymorphic, staged, in-memory batch payload.
  • Quote: “The lure came through WhatsApp. It would download a malicious batch file. It was polymorphic in nature, staged in delivery, in memory, and they had encrypted command and control.” — Tom Kellerman [03:38]
• Sophisticated Capabilities:
  • Bypasses EDR/MDR solutions.
  • Remote control and surveillance: real-time screen streaming, banking-aware overlay injection, QR/Pix transaction manipulation, advanced keylogging, proximity audio capture.
  • Quote: “The RAT allowed for full remote fraud and surveillance of the victim. So real time screen streaming, bank aware overlay injection, QR pix, transaction manipulation, continuous logging to enable interactive credential theft, as well as proximity settings to pick up ambient noise.” — Tom Kellerman [04:06]
• Historical Context Fuels Sophistication:
  • Brazil’s early digital banking (due to hyperinflation & IMF/World Bank interventions in the '80s & '90s) and rapid computer science literacy fostered a unique cybercrime talent pool. [04:44], [16:59]

3. Attacker Infrastructure & Automation

• C2 (Command and Control):
  • Malicious C2 servers were left active and exposed over Port 80, indicating either operational sloppiness or confidence. [06:56]
  • Polymorphic build system capable of creating unique payloads per victim, complicating detection. [07:38]
• Automation with Human-in-the-Loop:
  • Blend of automation and live operator intervention.
  • Growing use of jailbroken LLMs (large language models) and resurgence of steganography (hidden commands/communications within images, ASCII art, etc.) to evade detection.
  • Quote: “One thing that we're going to be revealing studies on soon is the fact that steganography is making a comeback in some of these communities.” — Tom Kellerman [10:36]
• Continuous Campaign Management:
  • Attackers use their own distributed analytics dashboards, orchestrating secondary infections and campaign progression. [09:42]

4. The Russian Connection & Collaborative Threat Evolution

• Hybrid Threat Landscape:
  • Increasing collaboration between Brazilian and Russian cybercriminal organizations (Void Rabisu, Evil Corp, Bear, Laundry, Void Balar).
  • “...there's more and more collaboration and cooperation going on than ever seen before between these groups, which we didn't include in this report.” — Tom Kellerman [08:17]

5. Impact on Financial Sector: Beyond Wire Fraud

• Multilayered Fraud & Persistence:
  • Banana RAT’s level of persistence enables deeper fraud — not just monetary theft but also market manipulation, front-running material non-public info, and “shocking” (shorting stock then leaking adverse information).
  • Quote: “This type of rat could be used for a multitude of things that go far beyond just wire transfer fraud.” — Tom Kellerman [14:44]
• PIX System Targeting & QR Fraud:
  • Targeting Brazil’s PIX payment system highlights adversarial understanding of nuanced regional interdependencies.
  • Quote: “Pix for them is a way of conducting transactions through their wire transfer payment systems.” — Tom Kellerman [18:52]

6. Defensive Recommendations & Takeaways

Practical Steps for Organizations

• Top Five 2026 Security Priorities from Trend Micro:
  1. Baseline detection for AI tradecraft: Look for emoji, binary strings, or foreign slang — new indicators of malicious AI activity. [22:02]
  2. Embrace virtual patching: Patch at the network/security layer, given high zero day volume and lag in vendor patch response. [22:15]
  3. Attack path mapping: Regular, bidirectional; consider “how could my infrastructure be used to attack my own customers?” [22:20]
  4. Continuous threat hunting: Use AI to uncover hidden behavioral anomalies and assume compromise as default. [23:16]
  5. Treat all AI agents as potential C2 until governance is in place. [23:35]
  • Quote: “Treat all AI agents as a C2 channel until you've learned how to create a governance structure that's adequate, until you can put some guardrails on it.” — Tom Kellerman [23:35]

Specific Advice for Defending Against Banana RAT

• Update detections/telemetry for IoCs linked to Banana RAT.
• Presume WhatsApp/consumer messaging platforms are compromised; move off WhatsApp for business-sensitive comms.
• Improve reverse BEC (business email compromise from within) protections, especially for financial officers.
• Introduce robust out-of-band verification for critical actions.
• Harden against emerging threats: steganography, prompt injection, deepfake authentication bypasses.
• Ensure global threat intelligence coverage; “don’t live on an island.” [27:01]

---

Notable Quotes & Memorable Moments

• On the Evolution of Brazilian Cybercrime:
  “You basically created a population that had skills but didn't have any gainful opportunities and legitimate jobs to go to. So that's when the burgeoning cybercrime economy of Brazil began, back in the early 2000s.” — Tom Kellerman [17:16]

• On Steganography:
  “But the invisible prompt injections that can allow for steganography to be leveraged through, essentially photos or video files, is becoming more and more pernicious...” — Tom Kellerman [10:42]
  “That's brilliant.” — Tom Kellerman (on C2 hidden in ASCII art) [12:07]
  “If I may, that's sexy. That's what I'm talking about.” — Tom Kellerman [12:10]

• On AI’s Threat & Defense Role:
  “We really need to advance the nature of continuous threat hunting within banking infrastructure and [...] the utility of AI by adversaries in today's world. It just allows them to automate and orchestrate campaigns in real time in a continuous fashion...” — Tom Kellerman [09:00]

• On Industry Responsibility:
  “You can't assume your adversaries don't really understand your business. You have to presume that security through obscurity is over.” — Tom Kellerman [19:53]

---

Important Segments & Timestamps

• [02:03] Introduction to Shadow Water 063 & Banana RAT
• [03:31] Technical breakdown of the malware and its capabilities
• [04:44] Historical context of Brazilian cybercrime sophistication
• [05:25] Attack vector: phishing via WhatsApp/email
• [06:56] Details about attacker server infrastructure
• [07:44] Polymorphic payload build system explained
• [09:00] AI-powered threat evolution and real-time orchestration
• [10:36] Steganography “making a comeback”
• [14:44] Market manipulation and “shocking” explained
• [18:52] Explanation of Pix and its significance
• [22:02] Tom Kellerman’s top five defense recommendations
• [24:25] Specific guidance for defenders targeting Banana RAT
• [27:01] Importance of global intelligence and collaboration

---

Conclusion

This episode offers a nuanced view into modern financial cybercrime with a unique geographic and technical focus. It highlights Brazil as a proving ground for advanced financial fraud, exposes the multifaceted tools and tradecraft used by cybercriminals, and equips defenders with both tactical and strategic advice fit for the AI-driven threat environment of 2026.

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For further reading: See “Inside Shadow Water 063’s Banana RAT: From Build Server to Banking Fraud” on Trend Micro’s site.
Recommended action: Review your organization’s controls against the five-point checklist, and monitor for emerging polymorphic and steganographic threats in your environment.

Transcript

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[Dave Buettner]

Hello, everyone, and welcome to the Cyberwires Research Saturday. I'm Dave Buettner, and this is our weekly conversation with researchers and analysts, tracking down the threats and vulnerabilities, solving some of the hard problems, and protecting ourselves in a rapidly evolving cyberspace. Thanks for joining us.

[Tom Kellerman]

We've been following some of the significant Brazilian cybercrime cartels for a While, and Shadow Water 63 is one of them. And as a result, we recognize this as a very elegant payload which had the capacity to bypass bank security mechanisms as well as payment system mechanisms.

[Dave Buettner]

That's Tom Kellerman, VP of AI Security and Threat Research at Trend Micro. The research we're discussing today is titled Inside Shadow 063's Banana from Build, Server to Banking Fraud.

[Podcast Host / Interviewer]

Now, one of the things that caught my eye in this research, you know, most incident responders will see one side of an attack, but in this case, you all recovered both the attacker infrastructure and the victim side of the malware. Is it unusual to have that breadth of view into something like this?

[Tom Kellerman]

Not any longer. In the last few years, we've invested heavily in our MDR and IR practice, which is global in nature as well. And so that complements our threat research community within Trend AI, where we can cover both sides of the spectrum. And that's one reason why we are

[Tom Kellerman (continued / co-speaker)]

partners with Interpol through the fusion center in Singapore.

[Dave Buettner]

Gotcha.

[Podcast Host / Interviewer]

Well, before we dig into some of the technical elements here, describe for us what exactly Banana Rat is and what they're up to.

[Tom Kellerman]

Well, what I found fascinating about Shadowwater's payload here is that, you know, essentially they targeted 16 Brazilian financial institutions and

[Tom Kellerman (continued / co-speaker)]

crypto exchanges with this. The lure came through WhatsApp. It would download a malicious batch file. It was polymorphic in nature, staged in delivery, in memory, and they had encrypted command and control. The malware used layer obfuscation techniques like AES, RAP payloads and fileless PowerShell.

[Tom Kellerman]

And it bypassed most EDR and MDR

[Tom Kellerman (continued / co-speaker)]

capabilities of some of the banks that were using our technologies.

[Tom Kellerman]

Most importantly though, I'd say this, the

[Tom Kellerman (continued / co-speaker)]

RAT allowed for full remote fraud and surveillance of the victim.

[Tom Kellerman]

So real time screen streaming, bank aware overlay injection, QR picks, transaction manipulation, continuous logging to enable interactive credential theft, as

[Tom Kellerman (continued / co-speaker)]

well as proximity settings to pick up ambient noise.

[Tom Kellerman]

And from a financial sector perspective, it underscores what I learned years ago when I was at the World bank, which is the Brazilian cybercrime cartels are highly

[Tom Kellerman (continued / co-speaker)]

sophisticated because of a historical reason which

[Tom Kellerman]

I find interesting and I think it

[Tom Kellerman (continued / co-speaker)]

might be important for your audience to hear this.

[Tom Kellerman]

Brazil and Argentina went through hyperinflation back

[Tom Kellerman (continued / co-speaker)]

in the 80s and 90s, and as

[Tom Kellerman]

a result they moved to the American dollar and the World bank. And IMF then began connecting those banks

[Tom Kellerman (continued / co-speaker)]

in Brazil, like Bradesco and Itau, to the Internet first.

[Tom Kellerman]

And so they were first movers in electronic finance. And as a result, Brazilian organized crime got into hacking because money was digital far earlier than many of the other

[Tom Kellerman (continued / co-speaker)]

Latin American countries organized crime populations.

[Podcast Host / Interviewer]

No, that's a really interesting insight. I was not aware of that detail. Let's dig into the attack itself. How does a victim first encounter this malware and what happens?

[Tom Kellerman]

So essentially they would receive a phishing URL via WhatsApp or through traditional email, and immediately the malware would operationalize through

[Tom Kellerman (continued / co-speaker)]

a payload generation and stage delivery in memory.

[Tom Kellerman]

And what they would see would basically be a brand of the bank that

[Tom Kellerman (continued / co-speaker)]

they're using on their screen.

[Tom Kellerman]

That said, there was a security update

[Tom Kellerman (continued / co-speaker)]

that was needed in order to certify their device and their banking transactions would be secure.

[Tom Kellerman]

And once they essentially clicked on that, they had full and complete control.

[Podcast Host / Interviewer]

Can you describe for us what is the breadth of the control that they have here?

[Tom Kellerman (continued / co-speaker)]

What were the capabilities like I was describing?

[Tom Kellerman]

They have a banking aware overlay injection.

[Tom Kellerman (continued / co-speaker)]

They can real time screen stream everything

[Tom Kellerman]

that's being shown and visualized by the, by the operator. They had QR and fixed transaction manipulation

[Tom Kellerman (continued / co-speaker)]

capabilities and advanced key logging.

[Tom Kellerman]

I would say that of all the major cybercrime cartels hunting the financial sector, this is one of the better ones definitely in the top five, I'd say, in the world.

[Tom Kellerman (continued / co-speaker)]

This, this shadow water 63 group. The best ones though, are definitely Russians.

[Tom Kellerman]

And we really should underscore that the majority of successful attacks against financial institutions

[Tom Kellerman (continued / co-speaker)]

are leveraged by a cadre of Russian cybercrime cartels like Void Rabisu, Laundry, Bear Evil Corp and Void Balar.

[Podcast Host / Interviewer]

Well, let's talk about the server side tooling here. What did you all discover about the attacker's infrastructure?

[Tom Kellerman]

Well, I thought it was interesting that their malicious CC infrastructure is still active and publicly accessible over Port 80, exposing

[Tom Kellerman (continued / co-speaker)]

a number of endpoints used for payload staging.

[Tom Kellerman]

And it was very much symbolic of

[Tom Kellerman (continued / co-speaker)]

the fact that this is a Brazilian cartel in nature. And I would say that once again,

[Tom Kellerman]

I've never seen such a sophisticated attack

[Tom Kellerman (continued / co-speaker)]

leveraged by these groups before because of

[Tom Kellerman]

the way that they obfuscated through memory injection. And as well as that the they

[Tom Kellerman (continued / co-speaker)]

used different forms of encryption to essentially overlay and ensure that they had obfuscation payloads that were wrapped.

[Podcast Host / Interviewer]

You describe a polymorphic build system. Can you describe for our listeners what that means?

[Tom Kellerman]

Yeah, the stages of attack were built literally from reconnaissance, the delivery to lateral movement. Not just in the obfuscation stages of lateral movement, but also in terms of

[Tom Kellerman (continued / co-speaker)]

bypassing traditional EDR technologies.

[Tom Kellerman]

And so we were very impressed. But I am concerned now because of the scourge of banking fraud that's occurring across South America and how that's increasing in nature, where you're seeing connective tissue between Brazilian cybercrime cartels and Russian cybercrime cartels. And there's more and more collaboration and

[Tom Kellerman (continued / co-speaker)]

cooperation going on than ever seen before between these groups, which we didn't include in this report.

[Tom Kellerman]

We will be covering some of that in a modern day bank heist report

[Tom Kellerman (continued / co-speaker)]

that we'll be putting out later on this summer.

[Podcast Host / Interviewer]

So I guess, I mean, obviously generating a unique payload for every victim really complicates detection efforts.

[Tom Kellerman]

It definitely does. And they've learned from the defensive countermeasures put in place by the financial institutions. And I also thought it was intriguing that they were using WhatsApp as a delivery mechanism. I would say in the long run, what can be done best here is that we really need to advance the nature of continuous threat hunting within banking infrastructure and that the large school payment

[Tom Kellerman (continued / co-speaker)]

systems of the world, especially in Brazil, need to pay much closer attention to

[Tom Kellerman]

how they're defending themselves from within with AI.

[Tom Kellerman (continued / co-speaker)]

And the utility of AI by adversaries in today's world. It just allows them to automate and

[Tom Kellerman]

orchestrate campaigns in real time in a continuous fashion, as you well know. And so everyone should just kind of view AI as a dormant C and a dormant command and control. If you're not securing your AI infrastructure,

[Tom Kellerman (continued / co-speaker)]

you should just assume that it's going to be compromised and used against you at some point.

[Podcast Host / Interviewer]

Now, you describe the analytics dashboard that the attackers were using here. What did that reveal about how these operators were managing their campaigns?

[Tom Kellerman]

Well, in a very distributed fashion, frankly. And what became most concerning to me was the nature in which that they continue to conduct secondary infections, which is

[Tom Kellerman (continued / co-speaker)]

going to be coming out in a secondary report.

[Tom Kellerman]

It really reminded me of the mechanisms

[Tom Kellerman (continued / co-speaker)]

and tactics used by Laundry Bear, if

[Tom Kellerman]

you're familiar, or EvoCorp back in the day.

[Podcast Host / Interviewer]

Well, so I think a lot of folks think of malware as being automated. How much was this campaign automated, or how much was driven by a remote human operator in real time?

[Tom Kellerman (continued / co-speaker)]

I think it was a blend of both.

[Tom Kellerman]

But what's concerning to me now is you're saying the jailbreaking of LLMs to abuse them and misuse them is becoming more pernicious. And one thing that we're going to

[Tom Kellerman (continued / co-speaker)]

be revealing studies on soon is the

[Tom Kellerman]

fact that steganography is making a comeback

[Tom Kellerman (continued / co-speaker)]

in some of these communities. You're well aware of what steganography is,

[Tom Kellerman]

but the invisible prompt injections that can

[Tom Kellerman (continued / co-speaker)]

allow for steganography to be leveraged through, essentially photos or video files, is becoming more and more pernicious, and it really

[Tom Kellerman]

doesn't allow for that secondary C2 to

[Tom Kellerman (continued / co-speaker)]

be on a sleep cycle.

[Tom Kellerman]

I think going forward as a community, we need to start paying attention to

[Tom Kellerman (continued / co-speaker)]

two things, one of which is AI should always be considered essentially a C2,

[Tom Kellerman]

unless you're actively securing it. And then most importantly, that steganography and secondary forms of command and control that

[Tom Kellerman (continued / co-speaker)]

are on sleep cycles are the future,

[Tom Kellerman]

much like we saw in the past from like an espionage level of attacks.

[Tom Kellerman (continued / co-speaker)]

Whether it was Apt 29 or Turlo,

[Tom Kellerman]

who pioneered the use of steganography decades ago. I think that's becoming mainstream and I'd love to hear more from you. Have you actually interviewed anyone recently to

[Tom Kellerman (continued / co-speaker)]

discuss Stego or the use of Stego or how AI enabled Stego is becoming problematic because I would love to hear from them and their research as well.

[Podcast Host / Interviewer]

Yeah, you know, I haven't spoken to anyone specifically recently about steganography, really, since we leapt into this new AI world. What I was thinking of as you were describing it was actually, it was a story earlier this week about some folks who were Hiding their command and control in ASCII art of all things.

[Tom Kellerman (continued / co-speaker)]

That's brilliant.

[Podcast Host / Interviewer]

Yeah, right.

[Tom Kellerman]

If I may, that's sexy. That's what I'm talking about.

[Podcast Host / Interviewer]

It's kind of retro, right?

[Tom Kellerman]

It's retro, but it works. No, it's definitely quite interesting. And the banks in general are also being challenged by the fact that authorization

[Tom Kellerman (continued / co-speaker)]

and two factor authentication are being bypassed by DEFIC technology.

[Tom Kellerman]

In the upcoming modern day bank heist

[Tom Kellerman (continued / co-speaker)]

study that we're going to be releasing

[Tom Kellerman]

in August, we're really looking at trends

[Tom Kellerman (continued / co-speaker)]

of deeper forms of E fraud fraud that haven't really been appreciated before.

[Tom Kellerman]

As you and I both know that

[Tom Kellerman (continued / co-speaker)]

most valuable information in a financial institution isn't necessarily the wire transfer fraud, it's

[Tom Kellerman]

the non public market information. So we're trying to get our heads

[Tom Kellerman (continued / co-speaker)]

around whether or not you're seeing a trend of digital front running attacks that are meant to steal material non public market information or even manipulate that information. One thing that was discovered years ago

[Tom Kellerman]

that a number of us in the

[Tom Kellerman (continued / co-speaker)]

financial sector noticed, which I think is going to become more pronounced this year, is the construct of shocking. Shocking is when you literally you hack a financial institution, you maintain persistence in those systems, you basically then short their stock and then you dox their non public market material information to the regulators about a week later and then to the press. We'll be right back.

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[Tom Kellerman]

So you're shorting and doxing, I think

[Tom Kellerman (continued / co-speaker)]

different forms of market manipulation. Because of these advanced forms of persistence, as illustrated by Banana Rat and others, this type of rat could be used for a multitude of things that go far beyond just wire transfer fraud. And that's what's concerning Here, I think the lesson learned here is that A, please don't underestimate the cybercrime cartels of Latin America, particularly the Brazilian ones, and B, what else can be done with that level of persistence from a financial fraud perspective, market manipulation perspective, even an island hopping, as I would call it, perspective, where the institution itself's infrastructure is now being used to attack their customers and constituency.

[Tom Kellerman]

And that has already been realized in

[Tom Kellerman (continued / co-speaker)]

Brazil previously, where one of their major payment systems was compromised by a group that I'm not going to name here on this interview. And that payment system was then in turn used to attack customers, institutions throughout Brazil. That's how significant this type of community is. And when you start thinking about the access brokerage market, right, the access miners

[Tom Kellerman]

of the world, sharing, selling and manipulating

[Tom Kellerman (continued / co-speaker)]

that access to people who do understand

[Tom Kellerman]

the financial sector and the interdependencies therein,

[Tom Kellerman (continued / co-speaker)]

that becomes quite interesting as well. So I hope to be able to

[Tom Kellerman]

speak to you when my report comes out.

[Tom Kellerman (continued / co-speaker)]

But we're doing a deep dive of Both interviews with 50 CISOs in the financial sector, but also our own threat research to understand exactly what's going on. And our threat research is going to focus on what we consider to be the top tier cyber crime cartels. But also, more importantly, much like we're discussing today, the forms of persistence that have evolved because of AI, much like, you know, banana rat and stego, as we discussed.

[Podcast Host / Interviewer]

Well, Tom, just so I'm clear here, where do you place Brazil in terms of being on the leading edge of these sorts of threats? In other words, you mentioned how Brazil, by necessity, due to their inflation situation, where it was ahead of the game than most of the world, Is that true today? Are they a canary in the coal mine, if you will.

[Tom Kellerman]

So great question, and I forgot one part of that story that I should have shared.

[Tom Kellerman (continued / co-speaker)]

When the country moved to the dollar and also migrated to electronic finance, first in Latin America because of the World

[Tom Kellerman]

bank and imf, they also gave out

[Tom Kellerman (continued / co-speaker)]

laptops to all the children in schools.

[Tom Kellerman]

Laptops they couldn't take home, but laptops

[Tom Kellerman (continued / co-speaker)]

that they could use at schools.

[Tom Kellerman]

So they're dealing with hyperinflation, right?

[Tom Kellerman (continued / co-speaker)]

They got E Finance. All these kids are learning computer science in schools much quicker than their neighboring countries. And so you basically created a population that had skills but didn't have any gainful opportunities and legitimate jobs to go to. So that's when the burgeoning cybercrime economy of Brazil began, back in the early 2000s. So where, so I would put this group, specifically this group as like the number six, I would say, of a cybercrime cartel that is specifically targeting the financial sector. Again, I just want to be specific for the financial sector.

[Tom Kellerman]

The other top players are Void Rabisu

[Tom Kellerman (continued / co-speaker)]

Laundry, Bear, Void Belar and Evil Corp, all of which who are Russian and they've always been the best. But don't count the Brazilians out. We're doing a lot of research there

[Tom Kellerman]

since we're the largest security vendor in Latin America. And we're really trying to tie that

[Tom Kellerman (continued / co-speaker)]

knot to really look at the entire cognitive attack loop, as I'll call it, from MDR through IR through Threat Intelligence to see both ends of the attack. And that's why I'm privileged to be able to speak to you today.

[Tom Kellerman]

But I would demand more from all of us in the community to start

[Tom Kellerman (continued / co-speaker)]

looking for that C2 on a sleep cycle. And remember that these types of rats, they could just be a hearkening of what's to come.

[Podcast Host / Interviewer]

Hmm. The report spends a good amount of time discussing pics, QR code interception. I think that that might be a new term for folks outside of Brazil. Can you explain to us what pics is and why it was an important element here?

[Tom Kellerman]

Pick pix for them. It's a way of conducting transactions through their wire transfer payment systems.

[Tom Kellerman (continued / co-speaker)]

And so it is. It's important that if you attempt to actually infiltrate their wire transfer systems in Brazil, I think much more needs to be done by SWIFT and other entities that govern the security standards of wire transfer systems around the world in improving their level of security and understanding these types of threat dynamics.

[Tom Kellerman]

I am hoping that at the FS ISAC conference that's coming up in October

[Tom Kellerman (continued / co-speaker)]

is it in Austin, that much more attention is being paid to some of these nuanced issues. Again, this highlights the knowledge that this group, that this crew, that this cyber crime cartel, Shadow Otter 63 already has of the interdependencies in the financial sector. And you can't assume your adversaries don't really understand your business. You have to presume that security through obscurity is over.

[Tom Kellerman]

And I think AI enhances the level

[Tom Kellerman (continued / co-speaker)]

of reconnaissance and capabilities of even miscreants that are ignorant to the industry that they can easily, easily get sped up on any sort of any form of business and any form of transaction patterns.

[Podcast Host / Interviewer]

Well, let's talk about Shadowwater 63. What. What was the evidence that led you to associate that operation with Brazilian Portuguese speaking operators?

[Tom Kellerman]

Social engineering scripts near verbatim match for

[Tom Kellerman (continued / co-speaker)]

the language used by different campaigns that we've seen leveraged by these groups. The command and control infrastructure itself, the

[Tom Kellerman]

knowledge that they had of the Brazilian

[Tom Kellerman (continued / co-speaker)]

financial sector, the specific campaign domain that they use, 2026, and just some of the TTPs as illustrated that they had used before.

[Tom Kellerman]

I mean, there are only a handful

[Tom Kellerman (continued / co-speaker)]

of groups in Brazil that are operating at this level, I would say in Latin America. The other significant cybercrime crews are more than likely, you know, based in Colombia and Mexico. Sometimes it's hard to tell because of the Spanish speaking community, but I think it's easier with the Portuguese community to understand where they're coming from.

[Podcast Host / Interviewer]

Yeah, well, I mean, I think at the end of the day, ultimately the folks out there who are doing the blocking and tackling want to know how do I defend against this? That's most important for them to do their job. But then I think secondarily to that or perhaps lateral to that is the inner workings of it so that they can better understand it and then apply that knowledge more broadly as perspective, as insight into what the greater ecosystem of what's going on, try to inform their larger, broader defense. Does that make sense?

[Tom Kellerman]

Yeah, I'd say from a larger, broader

[Tom Kellerman (continued / co-speaker)]

defense, I'd say based on all of

[Tom Kellerman]

the different myriad of actors that we've

[Tom Kellerman (continued / co-speaker)]

been studying here at Trend AI, there's really five things that are necessary in 2026. They're quintessentially important. One is I'd say you got to baseline detections for AI tels like emoji and binary strings or foreign slang in English content. You really need to embrace virtual patching now because there's no way you're going to be able to wait for all the patches to come out. Given the velocity and the surge of zero days out there. I think attack path mapping needs to be conducted regularly internally. But also when you view your attack paths, you should be looking at your attack paths in a bidirectional flow. Right. If an adversary had a footprint or hold within your system, how could they leverage your infrastructure to attack your constituency? Because that is the worst case scenario. And most of these cyber crime cartels, that's exactly what their goal is. It's one thing to break into your house, but if I can break into your house and then hit all your neighbors houses like that show what's it called, Friends and Neighbors, it'll work perfectly.

[Tom Kellerman]

Joking, but not joking.

[Tom Kellerman (continued / co-speaker)]

You got to threat hunt continuously. Can you use AI to enhance threat hunting for a myriad of behavioral anomalies in the infrastructure? I mean just assume compromise and then lastly kind of treat all AI agents as a C2 channel until you've learned how to create a governance structure that's adequate, until you can put some guardrails on it. I would say those are my top five takeaways for the landscape that we're in now.

[Tom Kellerman]

But in the end, we have an

[Tom Kellerman (continued / co-speaker)]

entire site, trendaisecurity.com, we have an entire section, our site, with updated intelligence reports with the telemetry of the latest attacks and best practices to defend even if you're not a customer of ours, where you can essentially go, view, download or however you want to scrape it on a daily basis. I literally, I think we have at least 15 to 18 different studies coming out on a weekly basis on different threat actor groups and unique new campaigns, aside from, you know, the thousands of payloads and vulnerabilities that are released every day.

[Tom Kellerman]

So consider us, you know, a good

[Tom Kellerman (continued / co-speaker)]

Samaritan here and we're trying to give back. So that's why I'm grateful to speak to you.

[Podcast Host / Interviewer]

Yeah, for sure. Well, looking specifically at this campaign, what's your advice to defenders to disrupt an operation like this?

[Tom Kellerman (continued / co-speaker)]

Wow.

[Tom Kellerman]

I mean, at this point the telemetry is already out there and the IOC

[Tom Kellerman (continued / co-speaker)]

associated with this rat. Update your capabilities to defend against this group. Presume WhatsApp communications are compromised. I would really recommend people move off of WhatsApp in general, begin to filter in a better fashion, conduct more threat hunting if you presume you might have been compromised. If you're operating in Brazil as a major corporation or have a subsidiary there, expect groups like this to target you with this type of unique payload and or RAD infrastructure. Do a much better job in your business as it relates to reverse business email compromise, but not business compromise, not traditional Beck, but rbec, where you actually might be compromised from within the account of the person who has the authority to transfer funds within your organization, CFO or deputy CFO or whomever that person's account is already compromised.

[Tom Kellerman]

You should have secondary forms of out

[Tom Kellerman (continued / co-speaker)]

of band verification for that when it comes to stego. And I think where STEGO is going because I do think even though it's not being used in this attack, it is a harbinger of how STEGO is going to be used quickly in new forms of rats. Invisible prompt injection. So do you have the capacity to essentially prevent prompt injection at the network level and can you ascertain whether or not that's occurred from a two factor authentication perspective and just an authorization perspective? Do you have the capacity to have deep fake identification via computer vision algorithms, because that's where this is also going next as we see it in today's world. And do you have query generation assistance for your XDR or whatever platform or SIEM that you're using to help your security analysts move faster, react faster? Because it really bothers me as a former threat hunter and security analyst for the World bank back in the day,

[Tom Kellerman]

when it happens, especially with the world of AI where it's faster and more

[Tom Kellerman (continued / co-speaker)]

powerful, do you really have the time to figure out what prompt you should be using to understand the TTPS and IOCs in real time? Wouldn't it be great if you had AI assisting you in conducting that investigation and or that front? And then I would really stress this and however it sounds, it sounds.

[Tom Kellerman]

Make sure that whoever you're doing business

[Tom Kellerman (continued / co-speaker)]

with truly has global threat intelligence. You can't live on an island out here. The world is global. The greatest threat actors in cyber are overseas. They are hunting entire industries. They specialize in specific industries and threats to one industry can spread through that industry in systemic fashion, as we will depict and describe in the modern bank ICE report.

[Dave Buettner]

Our thanks to Tom Kellerman from Trend Micro for joining us. The research is titled Inside Shadow Water 063's Banana Rat from Build Server to Banking Fraud. We'll have a link in the Show Notes and that's Research Saturday brought to you by N2K CyberWire. We'd love to know what you think of this podcast. Your feedback ensures we deliver the insights that keep you a step ahead in the rapidly changing world of cybersecurity. If you like our show, please share a rating and review in your favorite part podcast app. Please also fill out the survey in the Show Notes or send an email to cyberwire2k.com this episode was produced by Liz Stokes. We're mixed by Elliot Peltzman and Trey Hester. Our executive producer is Jennifer Ibin. Peter Kilby is our publisher and I'm Dave Bittner. Thanks for listening. We'll see you back here next time.

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