Microsoft Thwarts Chinese Cyber Attack Targeting Western European Governments

 Microsoft on Tuesday revealed that it repelled a cyber attack staged by a Chinese nation-state actor targeting two dozen organizations, some of which include government agencies, in a cyber espionage campaign designed to acquire confidential data.

The attacks, which commenced on May 15, 2023, entailed access to email accounts affecting approximately 25 entities and a small number of related individual consumer accounts.

The tech giant attributed the campaign to Storm-0558, describing it as a nation-state activity group based out of China that primarily singles out government agencies in Western Europe.

"They focus on espionage, data theft, and credential access," Microsoft said. "They are also known to use custom malware that Microsoft tracks as Cigril and Bling, for credential access."

The breach is said to have been detected a month later on June 16, 2023, after an unidentified customer reported the anomalous email activity to the company.

Microsoft said it notified all targeted or compromised organizations directly via their tenant admins. It did not name the organizations and agencies affected and the number of accounts that may have been hacked.

However, according to the Washington Post, the attackers also broke into a number of unclassified U.S. email accounts.

The access to customer email accounts, per Redmond, was facilitated through Outlook Web Access in Exchange Online (OWA) and Outlook.com by forging authentication tokens.

"The actor used an acquired MSA key to forge tokens to access OWA and Outlook.com," it explained. "MSA (consumer) keys and Azure AD (enterprise) keys are issued and managed from separate systems and should only be valid for their respective systems."

"The actor exploited a token validation issue to impersonate Azure AD users and gain access to enterprise mail."

There is no evidence that the threat actor used Azure AD keys or any other MSA keys to carry out the attacks. Microsoft has since blocked the usage of tokens signed with the acquired MSA key in OWA to mitigate the attack.

"This type of espionage-motivated adversary seeks to abuse credentials and gain access to data residing in sensitive systems," Charlie Bell, executive vice president of Microsoft Security, said.

The disclosure comes more than a month after Microsoft exposed critical infrastructure attacks mounted by a Chinese adversarial collective called Volt Typhoon (aka Bronze Silhouette or Vanguard Panda) targeting the U.S.