AI-Generated Fake Bug Bounties: Luring Researchers into Malware Traps

SWARNALI GHOSH | DATE: FEBRUARY 16, 2026 Introduction

It’s a strange time to be in cybersecurity. For years, the industry’s "good guys"- the researchers, bug hunters, and developers were the ones setting the traps for the adversaries. But as we move through 2026, the roles are flipping in a way that should make every CTO and CISO lose a little sleep. Have you ever considered that the very research your team does to protect the company could be the exact door an attacker uses to walk right in?

We’re seeing a professionalized "hacking of people" that has moved beyond the typical phishing email. According to Palo Alto Networks’ Unit 42 2025 Global Incident Response Report, social engineering was the initial access vector in 36% of all cases they handled between May 2024 and May 2025. That’s more than a third of all major breaches starting with a conversation, not a code exploit.

The Death of the "Crap" Filter

For a long time, we have relied on a simple truth: attackers were often lazy or linguistically challenged. Typos, wacky formatting, and generic "Dear User" salutations were the filters we used to stay safe. Generative AI has effectively killed that safety net.

Today, threat actors use GenAI to craft hyper-personalised lures that are indistinguishable from legitimate professional outreach. But it's not just about better emails. We are seeing the rise of "AI slop"- a flood of low-quality, automated vulnerability reports generated by Large Language Models (LLMs).

The impact is real and immediate. Just look at the cURL project. According to a report from Hackaday, the project officially suspended its bug bounty program as of February 1, 2026. Why? Because the maintainers were drowning in "AI slop." Bleeping Computer noted that founder Daniel Stenberg received 20 submissions in the first few weeks of 2026 alone none of which were valid. When our most critical open-source tools have to shut down their defence programs just to keep their heads above water, the entire ecosystem is at risk.

"The main goal with shutting down the bounty is to remove the incentive for people to submit crap and non-well-researched reports to us. AI-generated or not." by Daniel Stenberg, cURL Founder.

Malware Traps: When "Bug Hunting" Becomes the Payload

Here’s where it gets truly dark. Threat actors aren't just annoying researchers with bad reports; they are actively weaponizing the "bug bounty" and "recruitment" process to deliver malware.

We’ve seen a surge in "Contagious Interview" campaigns. As reported by SC Media, state-sponsored groups like the Lazarus Group are posing as recruiters on LinkedIn. They lure developers with high-paying roles in "decentralized crypto exchanges" and then ask them to complete a "technical assessment."

The "assessment" is the trap. The researcher is directed to a GitHub repository that looks like a legitimate project. But, as Abstract Security points out, these repos often contain malicious tasks.json files within the .vscode folder. The moment a developer opens that project in VS Code, a hidden script executes, deploying backdoors like InvisibleFerret or the BeaverTail downloader.

It’s a brilliant, if nefarious, reversal of trust. The researcher believes they’re reviewing code for a bounty or a job, while in reality, the code is reviewing their machine for credentials.

The Rise of "Just-in-Time" Deception

If you think your EDR (Endpoint Detection and Response) will catch these, you might want to double-check your configuration. Attackers are now deploying what we at IronQlad call "Just-in-Time" AI-enabled malware.

New code families are querying LLMs during execution to dynamically obfuscate their source code. This means the signature changes every single time it runs, making traditional, static detection tools practically useless. Furthermore, Unit 42’s 2025 research highlights "ClickFix" campaigns that use browser prompts to trick users into running the final stage of an attack chain themselves. If the user clicks "Allow," they aren't just bypassing a prompt; they are often initiating a "last mile" browser reassembly that builds the malware entirely within the memory of the browser.

Beyond the Human Firewall: Engineering Resilience

So, if the "human firewall" is being bypassed by AI-cloned voices and hyper-realistic recruitment scams, where do we go from here? At IronQlad, we’re advising clients to stop asking their employees to "be more careful" and start building systems that assume they will be fooled.

Identity Threat Detection and Response (ITDR): Legacy MFA isn't enough when an attacker can talk a help desk agent into a reset. You need behavioural analytics that flag when a "Domain Admin" is doing something they've never done before at 3:00 AM.

Hardened Recovery Paths: We need to treat the "Help Desk" as a high-security gateway. Unit 42 documented cases where attackers escalated from initial access to full domain admin in less than 40 minutes solely through internal help desk manipulation. Strict, out-of-band verification for MFA reset requests is no longer optional.

Safe Research Environments: If your team is performing bug hunting or code reviews, they shouldn't be doing it on their primary workstations. Use interactive sandboxes or secure enterprise browsers. As Abstract Security suggests, even a simple change, like disabling task.allowAutomaticTasks in VS Code, can prevent a "Contagious Interview" repo from executing its payload.

A Future Built on Verified Trust

The “Trust Crisis” of 2026 is not going away. With the increasing ease of creating a persona, voice, or professional reputation through AI, we must move towards a technical model of Zero Trust. We cannot rely on our developers to recognise a state-sponsored malware trap when it looks just like a $10,000 bug bounty opportunity.

It’s not a question of whether your team is smart enough to avoid the trap. It’s a question of whether your infrastructure is robust enough to survive if they do.

Is your security team ready for the influx of AI-powered social engineering attacks? See how IronQlad can help you assess your identity resilience and protect your developer workflows from these sophisticated new pitfalls.

KEY TAKEAWAYS

Social Engineering Dominance: It is now the primary entry point for over 36% of security incidents, fueled by AI-enhanced personalization.

The "AI Slop" Crisis: Major open-source projects like cURL are being forced to end bug bounty programs due to the overwhelming volume of low-quality, AI-generated reports.

Targeting the Protectors: Groups like Lazarus are weaponizing the recruitment process, using malicious VS Code configurations to infect researchers.

Technical Verification Over Education: Relying on "gut feel" to spot scams is no longer viable; organizations must move toward Behavioral Analytics and ITDR.