The US Treasury Department has sanctioned three Chinese nationals for their involvement in a VPN-powered botnet with more than 19 million residential IP addresses they rented out to cybercriminals to obfuscate their illegal activities, including COVID-19 aid scams and bomb threats.

The criminal enterprise, the Treasury Department said Tuesday, was a residential proxy service known as 911 S5. Such services provide a bank of IP addresses belonging to everyday home users for customers to route Internet connections through. When accessing a website or other Internet service, the connection appears to originate with the home user.

In 2022, researchers at the University of Sherbrooke profiled 911[.]re, a service that appears to be an earlier version of 911 S5. At the time, its infrastructure comprised 120,000 residential IP addresses. This pool was created using one of two free VPNs—MaskVPN and DewVPN—marketed to end users. Besides acting as a legitimate VPN, the software also operated as a botnet that covertly turned users' devices into a proxy server. The complex structure was designed with the intent of making the botnet hard to reverse engineer.

MaskVPN and DewVPN connected devices to the type of server legitimate VPNs use to obfuscate the originating IP address and route traffic through an encrypted tunnel. At the same time, hidden functionality established a permanent TCP socket to a botnet command-and-control server. University of Sherbrooke researchers wrote: