Flashback was first discovered by Intego in September of 2011. It targets Java vulnerabilities on OS X, two of them to be exact, in order to infect the system. Should Flashback find that Java is fully updated, it will attempt to social engineer the malware’s installation, by presenting an applet with a self-signed certificate. The certificate claims to be signed by Apple, but is clearly marked as invalid. However, users are known to skip such warnings, thus allowing the malware to be installed.
The newest variant will render programs such as Safari and Skype unstable, causing them to crash. Interestingly enough, normally these are stable programs, so if they start suddenly crashing might be a sign of larger issues.