Medusa Ransomware: Lazarus Group Targeting US Healthcare — Detection and Incident Response Guide

---
title: Medusa Ransomware File Encryption Activity
id: 9a3d7b1c-8e5f-4d23-9a1c-8f5d2e3b4c6a
status: experimental
description: Detects potential Medusa ransomware file encryption activity based on rapid file renaming with suspicious extensions and ransom note creation.
references:
  - https://www.infosecurity-magazine.com/news/north-korean-lazarus-group-medusa/
author: Security Arsenal
date: 2025/01/15
tags:
  - attack.impact
  - attack.t1486
logsource:
  category: file_change
  product: windows
detection:
  selection:
    TargetFilename|endswith:
      - '.medusa'
      - '.locked'
  condition: selection
falsepositives:
  - Legitimate file archiving operations
  - Known file conversion processes
level: high
---
title: Medusa Ransomware Ransom Note Creation
id: b7c4d2e1-9f6a-5e34-bd2c-7a8e9f0d1e2f
status: experimental
description: Detects creation of typical Medusa ransom note files (README variants) in root directories or user profiles.
references:
  - https://www.infosecurity-magazine.com/news/north-korean-lazarus-group-medusa/
author: Security Arsenal
date: 2025/01/15
tags:
  - attack.impact
  - attack.t1486
logsource:
  category: file_create
  product: windows
detection:
  selection:
    TargetFilename|contains:
      - 'README'
      - 'HOW_TO_RESTORE'
      - 'RECOVERY_INSTRUCTIONS'
    TargetFilename|endswith:
      - '.txt'
      - '.html'
  condition: selection
falsepositives:
  - Legitimate documentation files created by administrators
level: critical
---
title: Medusa Ransomware PowerShell Execution Chain
id: 1e8f9a0b-3d4c-6e7f-8a9b-0c1d2e3f4g5h
status: experimental
description: Detects suspicious PowerShell execution patterns associated with Medusa ransomware deployment including obfuscation and remote script execution.
references:
  - https://www.infosecurity-magazine.com/news/north-korean-lazarus-group-medusa/
author: Security Arsenal
date: 2025/01/15
tags:
  - attack.execution
  - attack.t1059.001
logsource:
  category: process_creation
  product: windows
detection:
  selection:
    Image|endswith:
      - '\powershell.exe'
    CommandLine|contains:
      - 'DownloadString'
      - 'IEX'
      - 'FromBase64String'
      - 'EncodedCommand'
    CommandLine|contains:
      - '.medusa'
      - 'encryption'
  condition: selection
falsepositives:
  - Legitimate PowerShell administration scripts
level: high

// Medusa Ransomware Detection Hunt
// Look for rapid file encryption and ransom note creation
let SuspiciousFileExtensions = dynamic(['.medusa', '.locked', '.encrypted']);
let RansomNoteKeywords = dynamic(['README', 'HOW_TO_RESTORE', 'RECOVERY_INSTRUCTIONS', 'MEDUSA']);

// Search for file creation with suspicious extensions
DeviceFileEvents
| where Timestamp > ago(1d)
| where ActionType in ('FileCreated', 'FileRenamed')
| where FileName has_any(SuspiciousFileExtensions)
| project Timestamp, DeviceName, InitiatingProcessAccountName, InitiatingProcessCommandLine, FileName, FolderPath
| summarize FilesAffected = count(), FirstSeen = min(Timestamp), LastSeen = max(Timestamp), SampleCommands = take_any(InitiatingProcessCommandLine) by DeviceName, InitiatingProcessAccountName
| where FilesAffected > 10  // Threshold for bulk file operations
| extend AlertSeverity = iff(FilesAffected > 100, 'Critical', 'High')

// Union with ransom note detection
| union (
    DeviceFileEvents
    | where Timestamp > ago(1d)
    | where ActionType == 'FileCreated'
    | where FileName has_any(RansomNoteKeywords)
    | project Timestamp, DeviceName, InitiatingProcessAccountName, InitiatingProcessCommandLine, FileName, FolderPath
)

-- Hunt for Medusa Ransomware Indicators of Compromise
-- Scan for encrypted files, ransom notes, and suspicious processes

LET MedusaExtensions = ['.medusa', '.locked', '.encrypted']
LET RansomNotePatterns = ['README*', 'HOW_TO_RESTORE*', 'RECOVERY_INSTRUCTIONS*', '*MEDUSA*']

-- Scan for recently modified files with Medusa extensions
SELECT OSPath, Mtime, Size, Mode
FROM glob(globs='/**/*', root='/')
WHERE Mtime > now() - duration("7d")
  AND OSPath =~ MedusaExtensions
LIMIT 500

-- Combine with ransom note detection
UNION

-- Search for ransom notes
SELECT OSPath, Mtime, Size, Mode
FROM glob(globs='C:/**/*.txt', root='/')
WHERE OSPath =~ RansomNotePatterns
  AND Mtime > now() - duration("7d")

-- Hunt for suspicious PowerShell processes
UNION

SELECT Pid, Name, CommandLine, Exe, Username, CreateTime
FROM pslist()
WHERE Name =~ 'powershell.exe'
  AND (CommandLine =~ 'DownloadString' OR CommandLine =~ 'IEX' OR CommandLine =~ 'FromBase64String')
  AND CommandLine =~ 'medusa'

# Medusa Ransomware Detection and Containment Script
# Version: 1.0
# Purpose: Detect Medusa ransomware indicators and initiate containment

param(
    [switch]$AnalyzeOnly,
    [string]$LogPath = "C:\Windows\Temp\MedusaScan_$(Get-Date -Format 'yyyyMMdd').log"
)

function Write-Log {
    param([string]$Message)
    $timestamp = Get-Date -Format "yyyy-MM-dd HH:mm:ss"
    Add-Content -Path $LogPath -Value "[$timestamp] $Message"
    Write-Host $Message
}

function Stop-MaliciousProcess {
    param([string]$ProcessName, [string]$CommandLinePattern)
    
    $maliciousProcesses = Get-WmiObject Win32_Process | Where-Object { 
        $_.Name -eq $ProcessName -and 
        $_.CommandLine -match $CommandLinePattern 
    }
    
    foreach ($proc in $maliciousProcesses) {
        try {
            Write-Log "[ALERT] Terminating malicious process PID $($proc.ProcessId): $($proc.Name)"
            Stop-Process -Id $proc.ProcessId -Force -ErrorAction Stop
        } catch {
            Write-Log "[ERROR] Failed to terminate process PID $($proc.ProcessId): $_"
        }
    }
}

function Find-EncryptedFiles {
    param([string[]]$Extensions, [int]$MinutesAgo = 60)
    
    $encryptedFiles = @()
    $cutoffTime = (Get-Date).AddMinutes(-$MinutesAgo)
    
    foreach ($ext in $Extensions) {
        try {
            $files = Get-ChildItem -Path C:\ -Filter "*$ext" -Recurse -ErrorAction SilentlyContinue |
                    Where-Object { $_.LastWriteTime -gt $cutoffTime }
            $encryptedFiles += $files
        } catch {
            # Continue searching other locations
        }
    }
    
    return $encryptedFiles
}

function Disable-RDP {
    Write-Log "[ACTION] Disabling RDP service for containment..."
    Set-ItemProperty -Path 'HKLM:\SYSTEM\CurrentControlSet\Control\Terminal Server' -Name "fDenyTSConnections" -Value 1
    Get-Service -Name TermService | Stop-Service -Force
    Disable-NetFirewallRule -DisplayGroup "Remote Desktop"
    Write-Log "[INFO] RDP services disabled"
}

function Block-SuspiciousNetwork {
    Write-Log "[ACTION] Enabling network containment..."
    # Block outbound on common C2 ports
    $ports = @(443, 80, 53)
    foreach ($port in $ports) {
        New-NetFirewallRule -DisplayName "Block Outbound Port $port" `
            -Direction Outbound -Action Block -Protocol TCP -LocalPort $port `
            -ErrorAction SilentlyContinue
    }
    Write-Log "[INFO] Network containment rules applied"
}

# Main execution
Write-Log "Starting Medusa Ransomware Detection and Containment"

# Detect malicious PowerShell processes
Write-Log "Scanning for suspicious PowerShell activity..."
Stop-MaliciousProcess -ProcessName "powershell.exe" `
    -CommandLinePattern "(DownloadString|IEX|FromBase64String).*medusa"

# Detect encrypted files
Write-Log "Scanning for recently encrypted files..."
$encryptedFiles = Find-EncryptedFiles -Extensions @('.medusa', '.locked') -MinutesAgo 30
if ($encryptedFiles.Count -gt 10) {
    Write-Log "[CRITICAL] Detected $($encryptedFiles.Count) potentially encrypted files in last 30 minutes"
    $encryptedFiles | Select-Object -First 20 FullName, LastWriteTime | ForEach-Object { Write-Log "  $($_.FullName) - $($_.LastWriteTime)" }
} else {
    Write-Log "[INFO] No significant encrypted file activity detected"
}

# Scan for ransom notes
Write-Log "Scanning for ransom notes..."
$ransomNotes = Get-ChildItem -Path C:\, $env:USERPROFILE -Include "README*","HOW_TO_RESTORE*","RECOVERY_INSTRUCTIONS*" -Recurse -ErrorAction SilentlyContinue | 
                Where-Object { $_.LastWriteTime -gt (Get-Date).AddHours(-24) }
if ($ransomNotes) {
    Write-Log "[CRITICAL] Ransom notes detected: $($ransomNotes.FullName)"
}

# Containment actions if not analysis only
if (-not $AnalyzeOnly -and ($encryptedFiles.Count -gt 10 -or $ransomNotes)) {
    Write-Log "[ALERT] Containment actions initiated due to detected ransomware activity"
    Disable-RDP
    Block-SuspiciousNetwork
    Write-Log "[CRITICAL] ISOLATE SYSTEM IMMEDIATELY - Engage Incident Response Team"
}

Write-Log "Scan completed. Log saved to: $LogPath"