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Internet of Things (IoT) cloud networks is itself a pervasive idea where all the physical objects are connected over the internet and are allocated with special self-identifying ability to discover other potential objects to transmit data over the internet. The most important shortcoming of IoT cloud networks which needs immediate addressing is the issue of IoT nodes when used within a virtual network of a cloud system. The IoT nodes often communicate over a virtual network and this communication needs to be monitored and managed by the cloud service provider (CSP). This CSP needs to make sure that no IoT node with malicious intent can thrive in such a network. In this paper we propose a framework for the security over virtual network for IoT nodes in a cloud system. Firstly, we propose a secure key management protocol between the CSP and the user group having the IoT nodes using a balanced incomplete …