It's one of two security systems we have running with x10hosting; one is running on the server itself, the other (LWScanner is the name it shows in suspension reasons, although it's got 2 or 3 variations on the name now) is running on my home pc as I'm the creator and developer of it. It is not a virus, nor does it do anything malicious. All it does is scan the files currently being executed on the server, which anyone viewing your website could do as well, since many anti-virus systems scan what is being viewed and sever the connection before anything bad can happen.
This just takes it a step further and scans for known malware, and anything that triggers as a virus. I do re-reviews on many of the suspensions it does, especially the ones that show it was a virus scan hit and not a normal "this is a known bad script hit" - yours was for a variation on the C40 webhosting shell, which is extremely malicious and has no rightful business on a hosting account.