# [CRIT] Phantom Squatting: AI-Hallucinated Domains as a Software Supply Chain Vector

**Source:** Unit 42 (Palo Alto)
**Published:** 2026-07-01
**Article:** https://unit42.paloaltonetworks.com/phantom-squatting-hallucinated-web-domains/

## Threat Profile

Threat Research Center 
Threat Research 
Malware 
Malware 
Phantom Squatting: AI-Hallucinated Domains as a Software Supply Chain Vector 
19 min read 
Related Products Advanced DNS Security Advanced URL Filtering Advanced WildFire Cloud-Delivered Security Services Code to Cloud Platform Prisma AIRS Unit 42 AI Security Assessment Unit 42 Incident Response 
By: Keerthiraj Nagaraj 
Diva-Oriane Marty 
Beliz Kaleli 
Oleksii Starov 
Published: June 30, 2026 
Categories: Malware 
Threat Research 
Tags: …

## Indicators of Compromise (high-fidelity only)

- **SHA256:** `eb07edaa2786cfddfa4c15526168f2200d85300aee0a8f253b32d2462a7b0bcd`
- **SHA256:** `2202a30daad9928ef47cca5f4ab04ce083692a94428e386fa01c2dd44557e34b`

## MITRE ATT&CK Techniques

- **T1071.001** — Web Protocols
- **T1071.004** — DNS
- **T1566.002** — Spearphishing Link
- **T1204.001** — User Execution: Malicious Link
- **T1059.001** — PowerShell
- **T1566.001** — Spearphishing Attachment
- **T1204.002** — User Execution: Malicious File
- **T1059.005** — Visual Basic
- **T1218** — System Binary Proxy Execution
- **T1204.004** — User Execution: Malicious Copy and Paste
- **T1195.002** — Compromise Software Supply Chain
- **T1027** — Obfuscated Files or Information
- **T1566.002** — Phishing: Spearphishing Link
- **T1505.003** — Server Software Component: Web Shell
- **T1071.001** — Application Layer Protocol: Web Protocols
- **T1583.001** — Acquire Infrastructure: Domains

## Kill chain phases observed

_(none detected from narrative keywords)_

## Recommended hunts

### Montana Empire phishing-kit ZIP + companion APK by SHA256 on endpoints

`UC_12_7` · phase: **delivery** · confidence: **Medium** · AI-generated for this article

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count min(_time) as firstTime max(_time) as lastTime from datamodel=Endpoint.Filesystem where Filesystem.file_hash IN ("eb07edaa2786cfddfa4c15526168f2200d85300aee0a8f253b32d2462a7b0bcd","2202a30daad9928ef47cca5f4ab04ce083692a94428e386fa01c2dd44557e34b") by Filesystem.dest Filesystem.file_name Filesystem.file_path Filesystem.file_hash Filesystem.user | `drop_dm_object_name(Filesystem)` | convert ctime(firstTime) ctime(lastTime) | sort - lastTime
```

**Defender KQL:**
```kql
let kitHashes = dynamic(["eb07edaa2786cfddfa4c15526168f2200d85300aee0a8f253b32d2462a7b0bcd","2202a30daad9928ef47cca5f4ab04ce083692a94428e386fa01c2dd44557e34b"]);
union
 (DeviceFileEvents | where Timestamp > ago(30d) | where SHA256 in~ (kitHashes) | project Timestamp, DeviceName, Source="FileEvent", FileName, FolderPath, SHA256, Actor=InitiatingProcessFileName, User=InitiatingProcessAccountName, Origin=FileOriginUrl),
 (DeviceProcessEvents | where Timestamp > ago(30d) | where SHA256 in~ (kitHashes) | project Timestamp, DeviceName, Source="ProcessEvent", FileName, FolderPath, SHA256, Actor=InitiatingProcessFileName, User=AccountName, Origin="")
| order by Timestamp desc
```

### Montana Empire kit PHP components staged on web infrastructure

`UC_12_8` · phase: **install** · confidence: **Medium** · AI-generated for this article

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count min(_time) as firstTime max(_time) as lastTime from datamodel=Endpoint.Filesystem where Filesystem.file_name IN ("panel_track.php","verify_api.php","mentalite.php") by Filesystem.dest Filesystem.file_path Filesystem.file_name Filesystem.user | `drop_dm_object_name(Filesystem)` | convert ctime(firstTime) ctime(lastTime) | sort - lastTime
```

**Defender KQL:**
```kql
DeviceFileEvents
| where Timestamp > ago(30d)
| where FileName in~ ("panel_track.php","verify_api.php","mentalite.php")
| project Timestamp, DeviceName, ActionType, FileName, FolderPath, SHA256, InitiatingProcessFileName, InitiatingProcessCommandLine, InitiatingProcessAccountName
| order by Timestamp desc
```

### AI coding-assistant egress to first-seen external domain (phantom squatting)

`UC_12_9` · phase: **c2** · confidence: **Low** · AI-generated for this article

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count min(_time) as firstTime max(_time) as lastTime from datamodel=Network_Traffic.All_Traffic where All_Traffic.app IN ("cursor.exe","code.exe","windsurf.exe","ollama.exe","copilot.exe","continue.exe") by All_Traffic.dest All_Traffic.app All_Traffic.src | `drop_dm_object_name(All_Traffic)` | `security_content_ctime(firstTime)` | eval isNew=if(firstTime >= relative_time(now(),"-1d"),1,0) | where isNew=1 | sort - firstTime
```

**Defender KQL:**
```kql
let AiClients = dynamic(["cursor.exe","code.exe","windsurf.exe","ollama.exe","copilot.exe","continue.exe","claude.exe"]);
let Baseline = DeviceNetworkEvents
    | where Timestamp between (ago(30d) .. ago(1d))
    | where InitiatingProcessFileName in~ (AiClients)
    | summarize by RemoteUrl;
DeviceNetworkEvents
| where Timestamp > ago(1d)
| where InitiatingProcessFileName in~ (AiClients)
| where isnotempty(RemoteUrl) and RemoteIPType == "Public"
| join kind=leftanti Baseline on RemoteUrl
| summarize FirstSeen=min(Timestamp), Hosts=dcount(DeviceName), SampleCmd=any(InitiatingProcessCommandLine), RemoteIPs=make_set(RemoteIP, 5) by RemoteUrl, InitiatingProcessFileName
| order by FirstSeen desc
```

### Beaconing — periodic outbound to small set of destinations

`UC_BEACONING` · phase: **c2** · confidence: **Medium**

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count, values(All_Traffic.dest_port) AS ports
    from datamodel=Network_Traffic.All_Traffic
    where All_Traffic.action="allowed" AND All_Traffic.dest_category!="internal"
    by _time span=10s, All_Traffic.src, All_Traffic.dest
| `drop_dm_object_name(All_Traffic)`
| streamstats current=f last(_time) AS prev_time by src, dest
| eval delta = _time - prev_time
| stats avg(delta) AS avg_delta stdev(delta) AS sd_delta count by src, dest
| where count > 30 AND sd_delta < 5 AND avg_delta>=30 AND avg_delta<=600
| sort - count
```

**Defender KQL:**
```kql
DeviceNetworkEvents
| where Timestamp > ago(1d)
| where RemoteIPType == "Public" and ActionType == "ConnectionSuccess"
| project DeviceName, RemoteIP, RemotePort, Timestamp
| sort by DeviceName asc, RemoteIP asc, RemotePort asc, Timestamp asc
| extend prev_dev = prev(DeviceName, 1), prev_ip = prev(RemoteIP, 1),
         prev_port = prev(RemotePort, 1), prev_ts = prev(Timestamp, 1)
| where DeviceName == prev_dev and RemoteIP == prev_ip and RemotePort == prev_port
| extend delta_sec = datetime_diff('second', Timestamp, prev_ts)
| summarize conn_count = count(), avg_delta = avg(delta_sec), stdev_delta = stdev(delta_sec)
    by DeviceName, RemoteIP, RemotePort
| where conn_count > 30 and avg_delta between (30.0 .. 600.0) and stdev_delta < 5.0
| order by conn_count desc
```

### Phishing-link click correlated to endpoint execution

`UC_PHISH_LINK` · phase: **delivery** · confidence: **High**

**Splunk SPL (CIM):**
```spl
``` Phishing-link click that drives endpoint execution within 60s ```
| tstats `summariesonly` earliest(_time) AS click_time
    from datamodel=Web
    where Web.action="allowed"
    by Web.src, Web.user, Web.dest, Web.url
| `drop_dm_object_name(Web)`
| rename user AS recipient, dest AS clicked_domain, url AS clicked_url
| join type=inner recipient
    [| tstats `summariesonly` count
         from datamodel=Email.All_Email
         where All_Email.action="delivered" AND All_Email.url!="-"
         by All_Email.recipient, All_Email.src_user, All_Email.url, All_Email.subject
     | `drop_dm_object_name(All_Email)`
     | rex field=url "https?://(?<email_domain>[^/]+)"
     | rename recipient AS recipient]
| join type=inner src
    [| tstats `summariesonly` earliest(_time) AS exec_time
         values(Processes.process) AS exec_cmd, values(Processes.process_name) AS exec_proc
         from datamodel=Endpoint.Processes
         where Processes.parent_process_name IN ("chrome.exe","msedge.exe","firefox.exe",
                                                   "outlook.exe","brave.exe","arc.exe")
           AND Processes.process_name IN ("powershell.exe","pwsh.exe","cmd.exe","mshta.exe",
                                            "rundll32.exe","regsvr32.exe","wscript.exe",
                                            "cscript.exe","bitsadmin.exe","certutil.exe",
                                            "curl.exe","wget.exe")
         by Processes.dest, Processes.user
     | `drop_dm_object_name(Processes)`
     | rename dest AS src]
| eval delta_sec = exec_time - click_time
| where delta_sec >= 0 AND delta_sec <= 60
| table click_time, exec_time, delta_sec, recipient, src, src_user, subject,
        clicked_domain, clicked_url, exec_proc, exec_cmd
| sort - click_time
```

**Defender KQL:**
```kql
// Phishing-link click that drives endpoint execution within 60s.
// Far higher fidelity than "every clicked URL" — most legitimate clicks
// never spawn a non-browser child process, so the join eliminates the
// 99% of noise that makes a raw click query unactionable.
let LookbackDays = 7d;
let SuspectClicks = UrlClickEvents
    | where Timestamp > ago(LookbackDays)
    | where AccountName !endswith "$"
    | where ActionType in ("ClickAllowed","ClickedThrough")
    | join kind=inner (
        EmailEvents
        | where Timestamp > ago(LookbackDays)
        | where DeliveryAction == "Delivered"
        | where EmailDirection == "Inbound"
        | project NetworkMessageId, Subject, SenderFromAddress, SenderFromDomain,
                  RecipientEmailAddress, EmailTimestamp = Timestamp
      ) on NetworkMessageId
    | join kind=leftouter (
        EmailUrlInfo | project NetworkMessageId, Url, UrlDomain
      ) on NetworkMessageId, Url
    | project ClickTime = Timestamp, AccountUpn, IPAddress, Url, UrlDomain,
              Subject, SenderFromAddress, SenderFromDomain, RecipientEmailAddress,
              ActionType;
// Correlate to a non-browser child process spawned within 60 seconds on
// the recipient's device.
DeviceProcessEvents
| where Timestamp > ago(LookbackDays)
| where InitiatingProcessFileName in~ ("chrome.exe","msedge.exe","firefox.exe",
                                         "outlook.exe","brave.exe","arc.exe")
| where FileName in~ ("powershell.exe","pwsh.exe","cmd.exe","mshta.exe",
                        "rundll32.exe","regsvr32.exe","wscript.exe","cscript.exe",
                        "bitsadmin.exe","certutil.exe","curl.exe","wget.exe")
| join kind=inner SuspectClicks on $left.AccountName == $right.AccountUpn
| where Timestamp between (ClickTime .. ClickTime + 60s)
| project ClickTime, ProcessTime = Timestamp,
          DelaySec = datetime_diff('second', Timestamp, ClickTime),
          DeviceName, AccountName, RecipientEmailAddress, SenderFromAddress,
          Subject, Url, UrlDomain, ActionType,
          FileName, ProcessCommandLine, InitiatingProcessFileName
| order by ClickTime desc
```

### Email attachment opened from external sender

`UC_PHISH_ATTACH` · phase: **delivery** · confidence: **High**

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count
    from datamodel=Email.All_Email
    where All_Email.file_name!="-"
    by All_Email.src_user, All_Email.recipient, All_Email.file_name, All_Email.subject
| rename All_Email.recipient as user
| join type=inner user
    [| tstats `summariesonly` count
        from datamodel=Endpoint.Processes
        where Processes.parent_process_name IN ("OUTLOOK.EXE","winword.exe","excel.exe","powerpnt.exe")
          AND Processes.process_name IN ("cmd.exe","powershell.exe","wscript.exe","cscript.exe","mshta.exe","rundll32.exe","regsvr32.exe")
        by Processes.dest, Processes.user, Processes.parent_process_name, Processes.process_name, Processes.process
     | rename Processes.user as user]
```

**Defender KQL:**
```kql
let LookbackDays = 7d;
let MalAttachments = EmailAttachmentInfo
    | where Timestamp > ago(LookbackDays)
    | where AccountName !endswith "$"
    | project NetworkMessageId, RecipientEmailAddress,
              AttachmentFileName = FileName, AttachmentSHA256 = SHA256;
DeviceProcessEvents
| where Timestamp > ago(LookbackDays)
| where InitiatingProcessFileName in~ ("OUTLOOK.EXE","winword.exe","excel.exe","powerpnt.exe")
| where FileName in~ ("cmd.exe","powershell.exe","wscript.exe","cscript.exe",
                      "mshta.exe","rundll32.exe","regsvr32.exe")
| join kind=inner MalAttachments on $left.AccountUpn == $right.RecipientEmailAddress
| project Timestamp, DeviceName, AccountName, FileName, ProcessCommandLine,
          InitiatingProcessFileName, AttachmentFileName, AttachmentSHA256
```

### Office app spawning script/LOLBin child process

`UC_OFFICE_CHILD` · phase: **exploit** · confidence: **High**

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count min(_time) as firstTime max(_time) as lastTime
    from datamodel=Endpoint.Processes
    where Processes.parent_process_name IN ("winword.exe","excel.exe","powerpnt.exe","outlook.exe","onenote.exe","mspub.exe","visio.exe")
      AND Processes.process_name IN ("cmd.exe","powershell.exe","pwsh.exe","wscript.exe","cscript.exe","mshta.exe","rundll32.exe","regsvr32.exe","wmic.exe","bitsadmin.exe","certutil.exe")
    by Processes.dest, Processes.user, Processes.parent_process_name, Processes.process_name, Processes.process
| `drop_dm_object_name(Processes)`
| `security_content_ctime(firstTime)` | `security_content_ctime(lastTime)`
```

**Defender KQL:**
```kql
DeviceProcessEvents
| where Timestamp > ago(7d)
| where AccountName !endswith "$"
| where InitiatingProcessFileName in~ ("winword.exe","excel.exe","powerpnt.exe","outlook.exe","onenote.exe","mspub.exe","visio.exe")
| where FileName in~ ("cmd.exe","powershell.exe","pwsh.exe","wscript.exe","cscript.exe","mshta.exe","rundll32.exe","regsvr32.exe","wmic.exe","bitsadmin.exe","certutil.exe")
| project Timestamp, DeviceName, AccountName, InitiatingProcessFileName, FileName, ProcessCommandLine
```

### Fake CAPTCHA / clipboard-injected PowerShell (ClickFix / FakeCaptcha)

`UC_FAKECAPTCHA` · phase: **exploit** · confidence: **High**

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count min(_time) as firstTime max(_time) as lastTime
    from datamodel=Endpoint.Processes
    where Processes.parent_process_name IN ("explorer.exe","RuntimeBroker.exe")
      AND Processes.process_name IN ("powershell.exe","pwsh.exe","mshta.exe")
      AND (Processes.process="*iex*" OR Processes.process="*Invoke-Expression*"
        OR Processes.process="*FromBase64*" OR Processes.process="*DownloadString*"
        OR Processes.process="*hxxp*" OR Processes.process="*curl*" OR Processes.process="*wget*")
    by Processes.dest, Processes.user, Processes.process, Processes.parent_process_name
| `drop_dm_object_name(Processes)`
```

**Defender KQL:**
```kql
DeviceProcessEvents
| where Timestamp > ago(7d)
| where AccountName !endswith "$"
| where InitiatingProcessFileName in~ ("explorer.exe","RuntimeBroker.exe")
| where FileName in~ ("powershell.exe","pwsh.exe","mshta.exe")
| where ProcessCommandLine matches regex @"(?i)(iex|invoke-expression|frombase64|downloadstring|hxxp|curl |wget )"
| project Timestamp, DeviceName, AccountName, ProcessCommandLine, InitiatingProcessCommandLine
```

### Trusted vendor binary / installer launching unusual children

`UC_SUPPLY_CHAIN` · phase: **exploit** · confidence: **Medium**

**Splunk SPL (CIM):**
```spl
| tstats `summariesonly` count min(_time) as firstTime max(_time) as lastTime
    from datamodel=Endpoint.Processes
    where Processes.parent_process_name IN ("setup.exe","installer.exe","update.exe")
      AND Processes.process_name IN ("powershell.exe","cmd.exe","rundll32.exe","regsvr32.exe","mshta.exe","wscript.exe","cscript.exe","wmic.exe","bitsadmin.exe")
    by Processes.dest, Processes.user, Processes.parent_process_name, Processes.process_name, Processes.process
| `drop_dm_object_name(Processes)`
```

**Defender KQL:**
```kql
DeviceProcessEvents
| where Timestamp > ago(7d)
| where AccountName !endswith "$"
| where InitiatingProcessFileName in~ ("setup.exe","installer.exe","update.exe")
| where FileName in~ ("powershell.exe","cmd.exe","rundll32.exe","regsvr32.exe","mshta.exe","wscript.exe","cscript.exe","wmic.exe","bitsadmin.exe")
| project Timestamp, DeviceName, AccountName, InitiatingProcessFileName, FileName, ProcessCommandLine
```

### IOC-driven hunts (use shared templates)

These are standard IOC-substitution hunts — the canonical SPL and KQL live once in [`_TEMPLATES.md`](../_TEMPLATES.md), so we don't repeat the same boilerplate on every CVE / hash / network-IOC briefing.

- **File hash IOCs — endpoint file/process match** ([template](../_TEMPLATES.md#hash-ioc)) — phase: **install**, confidence: **High**
  - file hash IOC(s): `eb07edaa2786cfddfa4c15526168f2200d85300aee0a8f253b32d2462a7b0bcd`, `2202a30daad9928ef47cca5f4ab04ce083692a94428e386fa01c2dd44557e34b`


## Why this matters

Severity classified as **CRIT** based on: IOCs present, 10 use case(s) fired, 16 technique(s) inferred. Read the full article for actor attribution, tooling details, and any defanged IOCs in the body that aren't visible in the RSS summary.