"The worm will connect first to port 8080, and if necessary using SSL, to request the '/HNAP1/' URL. This will return an XML formatted list of router features and firmware versions. The worm appears to extract the router hardware version and the firmware revision," shared SANS instructor and ISC researcher Johannes Ullrich.
"Next, the worm will send an exploit to a vulnerable CGI script running on these routers. The request does not require authentication. The worm sends random 'admin' credentials but they are not checked by the script.
The worm comes in the form of a 2MB ELF MIPS binary, and once a router is infected, it scans for other victims on different networks, and serves the malware at a random low port for new victims to download.
"We call this a 'worm' at this point, as all it appears to do is spread. This may be a 'bot' if there is a functional command and control channel present," Ullrich concluded.
The vulnerability exploited is in the implementation of the Home Network Administration Protocol (HNAP), and apparently is present in the following series of Linksys routers: E4200, E3200, E3000, E2500, E2100L, E2000, E1550, E1500, E1200, E1000, E900. But it also depends on the devices' firmware version.
Also, someone who goes by the online handle "Rew" has apparently published proof-of-concept attack code for the exploitation of the vulnerability, and claims that the list of vulnerable devices is even longer.
Administrators and users are advised to Disable Remote Administration of their device, which protects them from the attack.
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