The MuddyWater threat actor, linked to Iran’s Ministry of Intelligence and Security (MOIS) and also known as Static Kitten, Mango Sandstorm, and Seedworm, has continued to refine its global espionage campaigns by masquerading as ransomware operations to obscure state-sponsored activity. In early 2026, the group conducted an intrusion disguised as a Chaos ransomware attack, leveraging Microsoft Teams for social engineering to establish screen-sharing sessions, steal credentials, and deploy remote management tools like AnyDesk and DWAgent. The operation included extortion emails directing victims to a ransomware leak site, but no file-encrypting malware was deployed, confirming the use of ransomware-as-a-decoy tactics. The attackers deployed a custom RAT named Darkcomp (Game.exe), signed with a previously linked certificate, and dropped via a loader named *ms_upd.exe*.
The backdoor features anti-analysis checks and supports 12 commands, including PowerShell execution and persistent shell access. Rapid7 researchers attribute the campaign to MuddyWater with moderate confidence, citing infrastructure overlap, code-signing certificates, and operational tradecraft. This follows a late 2025 incident where MuddyWater used Qilin ransomware for similar deception, suggesting an evolving pattern of false-flag operations to evade detection. Additionally, MuddyWater has been linked to a campaign targeting Omani government institutions, exfiltrating over 26,000 Ministry of Justice records, and pro-Iran-aligned hacktivist groups like Handala Hack have escalated activities, including leaking sensitive documents from the Port of Fujairah in the UAE.
Earlier campaigns targeted over 100 organizations globally, including government entities, diplomatic missions, and telecommunications firms in the MENA region, using phishing emails with malicious Word documents to drop backdoors like Phoenix v4, MuddyViper, UDPGangster, and RustyWater. The group has also targeted Israeli sectors across academia, engineering, and local government, as well as US companies with backdoors such as Dindoor and Fakeset. The shift from PowerShell-based tools to Rust-based implants and now ransomware decoys underscores MuddyWater’s adaptability and focus on evading attribution while pursuing espionage objectives.