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Russian State Actors Target Microsoft 365 Accounts Via Device Code Phishing Campaign

 

A hacking outfit potentially linked to Russia is running an active operation that uses device code phishing to target Microsoft 365 accounts of individuals at organisations of interest. The targets are in the government, non-governmental organisations (NGOs), IT services and technology, defence, telecommunications, health, and energy/oil and gas sectors in Europe, North America, Africa, and the Middle East. 

Microsoft Threat Intelligence Centre is tracking the threat actors behind the device code phishing effort as 'Storm-237'. Based on targets, victimology, and tradecraft, the researchers are confident that the activity is linked to a nation-state operation that serves Russia's interests.

Device code phishing assaults 

Input-constrained devices, such as smart TVs and some IoTs, use a code authentication flow to allow users to sign into an app by typing an authorization code on a different device, such as a smartphone or computer.

Since last August, Microsoft researchers noticed that Storm-2372 has been exploiting this authentication flow by deceiving users into submitting attacker-generated device numbers on legitimate sign-in sites. The operatives launch the attack after "falsely posing as a prominent person relevant to the target" via messaging systems such as WhatsApp, Signal, and Microsoft Teams.

The malicious actor progressively builds rapport before sending a bogus online meeting invitation via email or messaging. According to the researchers, the victim receives a Teams meeting invitation including a device code generated by the attacker.

"The invitations lure the user into completing a device code authentication request emulating the experience of the messaging service, which provides Storm-2372 initial access to victim accounts and enables Graph API data collection activities, such as email harvesting," Microsoft noted. 

This allows the attackers to access the victim's Microsoft services (email, cloud storage) without requiring a password for as long as the stolen tokens are valid. However, Microsoft claims that the perpetrator is currently employing a specific client ID for Microsoft Authentication Broker during the device code sign-in flow, allowing them to issue fresh tokens. 

This opens up new attack and persistence opportunities, as the threat actor can utilise the client ID to register devices with Entra ID, Microsoft's cloud-based identity and access management product. "With the same refresh token and the new device identity, Storm-2372 is able to obtain a Primary Refresh Token (PRT) and access an organization’s resources. We have observed Storm-2372 using the connected device to collect emails," Microsoft added.

'Nearest Neighbour Attack': Russian Hackers Breach US Firm Wi-Fi

 


Russian state-sponsored hacking group APT28 (Fancy Bear/Forest Blizzard/Sofacy) has employed a novel "nearest neighbor attack" to breach enterprise WiFi networks from thousands of miles away. The attack, first detected on February 4, 2022, targeted a U.S. company in Washington, D.C., involved in Ukraine-related projects. Cybersecurity firm Volexity identified the intrusion, highlighting APT28’s innovative approach to bypass multi-factor authentication (MFA).

Details of the Attack

APT28 initiated the attack by breaching a nearby organization’s WiFi network, exploiting dual-home devices such as laptops or routers with both wired and wireless connections. These devices allowed the hackers to connect to the target’s WiFi network. By daisy-chaining access to multiple organizations, the hackers were able to connect to the victim's wireless network and move laterally across the system.

The hackers were able to bypass multi-factor authentication on the company’s WiFi network, despite being physically located thousands of miles away. Once within range, they compromised access to three wireless access points near the target’s conference room windows and used remote desktop protocol (RDP) from an unprivileged user to roam across the network.

Exfiltration and Data Theft

The attackers dumped Windows registry hives (SAM, Security, and System) using a script called servtask.bat, compressing them into a ZIP file for exfiltration. This process allowed APT28 to gather sensitive data without causing significant disruptions to the target network. The focus of the attack was on individuals and projects related to Ukraine, in line with Russia’s geopolitical interests.

Volexity's investigation revealed that APT28 was particularly interested in data from individuals with expertise in Ukraine-related projects. This highlights the targeted nature of the attack, aimed at collecting intelligence from a specific field of work.

Implications and Security Measures

The attack underscores the need for robust WiFi security and network segmentation. APT28’s ability to exploit physical proximity and dual-home devices highlights the growing sophistication of cyberattacks. Organizations should consider the following measures:

  • Enhance WiFi network encryption and authentication protocols.
  • Implement strict network segmentation to limit lateral movement.
  • Regularly audit devices with dual wired and wireless connections.
  • Monitor for unusual network activity and lateral movements.

APT28’s "nearest neighbor attack" serves as a reminder of the advanced techniques used by state-sponsored hackers. Vigilance, along with layered cybersecurity defenses, is crucial in defending against such sophisticated attacks.

Microsoft’s Breach Notification Emails Wind Up in Spam Folder

 

Midnight Blizzard, a Russian nation-state hacker gang, breached Microsoft's security last year, gaining access to the emails of multiple customers. In late June, Microsoft revealed that more organisations were affected than previously assumed. However, the company's attempts to notify users may not have reached the intended recipients. 

According to Kevin Beaumont, a cybersecurity expert and former senior threat intelligence analyst at Microsoft, the company chose to notify affected victims via email. 

“The notifications aren’t in the portal – they emailed tenant admins instead. The emails can go into spam, and tenant admin accounts are supposed to be secure breakglass accounts without email. They also haven’t informed orgs via account managers,” Beaumont stated on LinkedIn. 

Apart from Beaumont's warnings, there is some evidence that Microsoft customers are genuinely perplexed. In a Microsoft support page, one customer revealed the email their company received in an attempt to determine whether it was a real Microsoft email. 

Others commented on Beaumont's post, alleging that several organisations misunderstood Microsoft's email for a phishing attempt and deleted it or marked it as spam. The breach notification emails allegedly lacked basic email authentication tools including SPF (Sender Policy Framework) and DKIM (DomainKeys Identified Mail). 

“Well, at first glance, this did not inspire trust for the recipients, who started asking in forums or reaching out to Microsoft account managers to eventually confirm that the email was legitimate...weird way for a provider like this to communicate an important issue to potentially affected customers,” the Greece-based cybersecurity consultant noted. 

In January, Microsoft admitted that Midnight Blizzard attempted to hack the tech giant's internal systems. The same hacking group was behind the infamous SolarWinds hack, which caused havoc on US government installations in 2020.

Microsoft Alerts Users as Russian Hackers Target Windows Systems

 

As advancements in AI technology continue to unfold, the specter of cybercrime looms larger each day. Among the chorus of cautionary voices, Microsoft, the eminent IT behemoth, adds its warning to the fray.

Microsoft's Threat Intelligence researchers have issued a stark advisory to Windows users regarding the targeted assaults orchestrated by Russian state-sponsored hackers wielding a sophisticated tool.

These hackers, known in some circles as APT28 or Fancy Bear, but tracked by Microsoft under the moniker Forest Blizzard, have close ties to Russia's GRU military intelligence agency.

GooseEgg, a tool wielded with the aim of siphoning data and surreptitiously establishing backdoors within computer systems. Forest Blizzard, alias APT28, has deployed GooseEgg in a series of calculated strikes targeting governmental entities, educational institutions, and transportation firms across the United States, Western Europe, and Ukraine.

Their modus operandi centers predominantly on the strategic acquisition of intelligence. Evidence suggests that the utilization of GooseEgg may have commenced as early as June 2020, with the possibility of earlier incursions dating back to April 2019.

In response to the threat landscape, a patch addressing a vulnerability identified as CVE-2022-38028 was released by Microsoft in October 2022. GooseEgg, the nefarious tool in the hackers' arsenal, exploits this particular weakness within the Windows Print Spooler service.

Despite its deceptively simple appearance, the GooseEgg program poses an outsized threat, granting attackers elevated permissions and enabling a litany of malicious activities. From the remote execution of malware to the surreptitious installation of backdoors and the seamless traversal of compromised networks, the ramifications are profound and far-reaching.

Microsoft Claims Russian Hackers are Attempting to Break into Company Networks.

 

Microsoft warned on Friday that hackers affiliated to Russia's foreign intelligence were attempting to break into its systems again, using data collected from corporate emails in January to seek new access to the software behemoth whose products are widely used throughout the US national security infrastructure.

Some experts were alarmed by the news, citing concerns about the security of systems and services at Microsoft, one of the world's major software companies that offers digital services and infrastructure to the United States government. 

The tech giant revealed that the intrusions were carried out by a Russian state-sponsored outfit known as Midnight Blizzard, or Nobelium.

The Russian embassy in Washington did not immediately respond to a request for comment on Microsoft's statement, nor on Microsoft's earlier statements regarding Midnight Blizzard activity.

Microsoft reported the incident in January, stating that hackers attempted to break into company email accounts, including those of senior company executives, as well as cybersecurity, legal, and other services. 

Microsoft's vast client network makes it unsurprising that it is being attacked, according to Jerome Segura, lead threat researcher at Malwarebytes' Threatdown Labs. He said that it was concerning that the attack was still ongoing, despite Microsoft's efforts to prevent access. 

Persistent Threat

Several experts who follow Midnight Blizzard claim that the group has a history of targeting political bodies, diplomatic missions, and non-governmental organisations. Microsoft claimed in a January statement that Midnight Blizzard was probably gunning after it since the company had conducted extensive study to analyse the hacking group's activities. 

Since at least 2021, when the group was discovered to be responsible for the SolarWinds cyberattack that compromised a number of U.S. federal agencies, Microsoft's threat intelligence team has been looking into and sharing research on Nobelium.

The company stated on Friday that the ongoing attempts to compromise Microsoft are indicative of a "sustained, significant commitment of the threat actor's resources, coordination, and focus.” 

"It is apparent that Midnight Blizzard is attempting to use secrets of different types it has found," the company added. "Some of these secrets were shared between customers and Microsoft in email, and as we discover them in our exfiltrated email, we have been and are reaching out to these customers to assist them in taking mitigating measures.”

HP Enterprise Reveals Hack Conducted by State-backed Russian Hackers


Hewlett Packard (HP) enterprise reported on Wednesday that alleged state-backed Russian hackers have attacked its cloud-based email system and stolen security and employees’ data.

In a Security and Exchange filing, the IT product provider noted that the attack occurred on January 12. They suspect that Russia’s foreign intelligence service ‘Cozy Bear’ was behind the attack.

“Based on our investigation, we now believe that the threat actor accessed and exfiltrated data beginning in May 2023 from a small percentage of HPE mailboxes belonging to individuals in our cybersecurity, go-to-market, business segments, and other functions,” HPE, which is based in Spring, Texas, said in the filing.

HP’s spokesperson, Adam R. Bauer, was contacted through his email, however, he did not make it clear who exactly informed HPE of the breach. “We’re not sharing that information at this time,” Bauer noted the compromised email boxes were running Microsoft software.

In the filing, HPE said the intrusion was “likely related to earlier activity by this threat actor, of which we were notified in June 2023, involving unauthorized access to and exfiltration of a limited number of SharePoint files.” SharePoint is a component of Microsoft's Office 365 suite, which also contains word processing, spreadsheet, and email tools.

SharePoint is part of Microsoft’s 365 suite, formerly known as Office, which includes email, word-processing and spreadsheet apps.

HPE is unable to say whether the network compromise was connected to the intrusion that Microsoft revealed last week, since "we do not have the details of the incident Microsoft disclosed," according to Bauer.

Also, he did not specify where the affected employee, whose accounts the hackers had access to, belonged in the company’s hierarchy. 

According to the sources, “The total scope of mailboxes and emails accessed remains under investigation.” 

As per the report, HPE has ascertained that the intrusion has not had any significant effect on the company's financial stability or operations. Both announcements coincide with the implementation one month ago of a new rule by the U.S. Securities and Exchange Commission requiring publicly traded corporations to report security breaches that may hurt their operations. Unless they are granted a national security waiver, they have four days to comply with this.  

Midnight Blizzard: Russian Threat Actors Behind Microsoft Corporate Emails’ Breach


On Friday, Microsoft informed that some of its corporate accounts suffered a breach in which some of its data was compromised. The attack was conducted by a Russian state-sponsored hackers group named “Midnight Blizzard.”

The attack was first detected on January 12th, and Microsoft in its initial investigation attributed the attack to the Russian threat actors, known famously as Nobelium or APT-29.

Microsoft informs that the threat actors launched the attacks in November 2023, in which they carried out a password spray attack in order to access a legacy non-production test tenant account. 

Password Spray Attack

A password spray attack is a type of brute force attack where threat actors collect a list of potential login names and then attempt to log in to all of them using a particular password. If that password fails, they repeat this process with other passwords until they run out or successfully breach the account.

Since the hackers were able to access accounts using a brute force attack, it is clear that it lacked two-factor authentication or multi-factor authentication.

Microsoft claims that after taking control of the "test" account, the Nobelium hackers utilized it to access a "small percentage" of the company's email accounts for more than a month.

It is still unclear why a non-production test account would have the ability to access other accounts in Microsoft's corporate email system unless the threat actors utilized this test account to infiltrate networks and move to accounts with higher permissions.

Apparently, these breached accounts include members of Microsoft’s leadership team and employees assigned to the cybersecurity and legal departments, targeted by hackers to steal emails and attachments. 

"The investigation indicates they were initially targeting email accounts for information related to Midnight Blizzard itself," the Microsoft Security Response Center shared in a report on the incident.

"We are in the process of notifying employees whose email was accessed."

Microsoft reaffirms that the incident was caused by the brute force password attack, rather than a vulnerability in their product services.

However, it seems that Microsoft’s poorly managed security configuration played a major role in the success of the breach.

While this investigation is underway, Microsoft stated that they will release more information when it is appropriate.  

Prior to Cyber Attack, Russian Attackers Spent Months Inside the Ukraine Telecoms Giant

 

Kyivstar experienced a large-scale malfunction in December 2023, resulting in the outage of mobile communications and the internet for about 24 million users for several days. 

How? Russian hackers broke into the Ukrainian telecommunications giant's system in May 2023. Ilya Vityuk, the chief of the Security Service of Ukraine's (SBU) cyber security department, told Reuters that the attack's aim was to inflict a psychological blow on the public and gather intelligence information. 

“This attack is a big message, a big warning, not only to Ukraine, but for the whole Western world to understand that no one is actually untouchable,” stated Vityuk. He said that hundreds of virtual servers and PCs were among the "almost everything" that the attack destroyed. 

Reuters writes this is most likely the first instance of a catastrophic cyberattack that destroyed a telecoms operator's core. This happened despite Kyivstar's significant investment in cyber security. The SBU discovered that hackers attempted to break into Kyivstar in March or earlier. 

“Now we can say [with certainty] that they were in the system at least since May 2023,” Vityuk added. “I cannot say right now, from when they had... full access: probably at least since November.” 

He leaves open the possibility that during the attack, Russian hackers may have located phones, intercepted SMS conversations, stolen personal information, and possibly stolen Telegram accounts. 

Kyivstar disputes the SBU's assessment of potential breaches, claiming that customer data was not exposed. The SBU further revealed that attempts continued to launch additional cyber attacks to inflict greater harm even after the provider's operations were resumed. 

The damage of the provider's system makes it difficult to investigate the situation at this time. However, the SBU thinks that a gang of Sandworm hackers, a cyberwarfare unit of Russian military intelligence, may have been responsible for the attack. 

According to Vityuk, SBU investigators are still trying to figure out how Kyivstar was hacked and what kind of tools or software might have been used to get inside the system. They also indicated that it might have been phishing, insider help, or something else entirely. 

Vityuk claims that because the Ukrainian Armed Forces (AFU) employ "different algorithms and protocols" and do not depend on consumer-level communication carriers, the cyberattack had no effect on them. 

Fortunately, this incident didn't have a significant impact on us in terms of missile and drone detection, he concluded. The SBU issues a warning, stating that there's a chance that Russian hackers might try to attack Ukrainian cell operators again.