The dual use nature of Large Language Models (LLMs) presents a growing challenge in cybersecurity. While LLM enhances automation and reasoning for defenders, they also introduce new risks, particularly their potential to be misused for generating evasive, AI crafted malware. Despite this emerging threat, the research community currently lacks controlled and extensible tools that can simulate such behavior for testing and defense preparation. We present MalGEN, a multi agent framework that simulates coordinated adversarial behavior to generate diverse, activity driven malware samples. The agents work collaboratively to emulate attacker workflows, including payload planning, capability selection, and evasion strategies, within a controlled environment built for ethical and defensive research. Using MalGEN, we synthesized ten novel malware samples and evaluated them against leading antivirus and behavioral detection engines. Several samples exhibited stealthy and evasive characteristics that bypassed current defenses, validating MalGEN's ability to model sophisticated and new threats. By transforming the threat of LLM misuse into an opportunity for proactive defense, MalGEN offers a valuable framework for evaluating and strengthening cybersecurity systems. The framework addresses data scarcity, enables rigorous testing, and supports the development of resilient and future ready detection strategies.