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MICROSOFT SHARES NEW GUIDANCE IN WAKE OF 'MIDNIGHT BLIZZARD'
CYBERATTACKMICROSOFT SHARES NEW GUIDANCE IN WAKE OF 'MIDNIGHT BLIZZARD'
CYBERATTACK

Threat actors created and abused OAuth apps to access Microsoft's corporate
email environment and remain there for weeks.

Jai Vijayan, Contributing Writer

January 26, 2024

4 Min Read
Source: dennizn via Shutterstock


Microsoft has released new guidance for organizations on how to protect against
persistent nation-state attacks like the one disclosed a few days ago that
infiltrated its own corporate email system.

A key focus of the guidance is on what organizations can do to protect against
threat actors using malicious OAuth apps to hide their activity and maintain
access to applications, despite efforts to boot them out.

The attack on Microsoft by Midnight Blizzard aka Cozy Bear — a threat group
affiliated with Russia's Foreign Intelligence Service (SVR) — resulted in the
compromise of email accounts belonging to several Microsoft employees, including
senior leadership.



Over a period of several weeks beginning late November 2023, the attackers
accessed Microsoft's corporate email accounts and exfiltrated emails and
document attachments in an apparent bid to determine what information the
company might have on Midnight Blizzard itself.

A recent SEC filing that surfaced this week showed that the threat actor, whom
the US government has formally identified as the perpetrator of the SolarWinds
hack, also breached Hewlett Packard Enterprise's (HPE) cloud-based email
environment last May. The attacks are believed to be part of a broader and
ongoing intelligence-gathering effort by SVR/Midnight Blizzard for potential
future campaigns.



In its Jan. 19 blog initially disclosing the attack, Microsoft described
Midnight Blizzard as having gained initial access to its environment via a
legacy, non-production test account that the threat actor compromised via a
password spray attack. Further investigation by the company —detailed in its
latest blog this week — showed that Midnight Blizzard actors used a "vast
number" of legitimate residential IP addresses to launch their password spray
attacks against targeted accounts at Microsoft, one of which happened to be the
test account they compromised. The threat actors use of the residential proxy
infrastructure for its attacks helped obfuscate their activity and evade
detection, Microsoft said.




ABUSING OAUTH APPS

Once the attacker gained initial access to the test account, they used it to
identify and compromise a legacy test OAuth application with privileged access
to Microsoft's corporate environment. Subsequently, "the actor created
additional malicious OAuth applications," Microsoft said. "They created a new
user account to grant consent in the Microsoft corporate environment to the
actor controlled malicious OAuth applications."



The adversary used the legacy OAuth app they had compromised to grant themselves
full access to Office 365 Exchange mailboxes, Microsoft said. "The misuse of
OAuth also enables threat actors to maintain access to applications, even if
they lose access to the initially compromised account," the company noted.

Tal Skverer, research team lead at Astrix Security, says Midnight Blizzard
actors leveraged malicious OAuth tokens because they likely knew their access to
the compromised account would be detected.

"Considering the scrutiny that user — human — accounts go through when it comes
to their security, the success of the password spraying attack in this case was
time-limited," he says. "So, while they had [access], they created OAuth apps
and consented to them, generating non-expiring OAuth access tokens to the
attackers."

Some of these permissions can persist even if an originally compromised account
is disabled or deleted allowing attackers to retain their access even if they
lose access via an initially compromised account, Skverer says.




THWARTING MALICIOUS OAUTH

Microsoft's Jan 25 blog offered guidance to organizations for mitigating risks
related to the misuse of OAuth apps. The recommendations include the need for
organizations to audit the current privilege levels associated with all
identities — both user and service — and to focus on those with high privileges.

"Privilege should be scrutinized more closely if it belongs to an unknown
identity, is attached to identities that are no longer in use, or is not fit for
purpose," Microsoft said. When reviewing privileges, an administrator should
keep in mind that users and services can often have privileges over and beyond
what they require, the blog noted.

Organizations also should audit identities that have the
ApplicationImpersonation privilege in Exchange Online that allows services to
impersonate a user and execute the same operations that the user can, Microsoft
advised.

"If misconfigured, or not scoped appropriately, these identities can have broad
access to all mailboxes in an environment," the company warned.

Organizations should also consider using anomaly detection policies to identify
malicious OAuth applications and conditional access application controls for
users connecting from unmanaged services, Microsoft said.


HOW TO DETECT MIDNIGHT BLIZZARD

The blog also included detailed guidance on what to look for in log data to hunt
and detect malicious activity such as that associated with Midnight Blizzard.

Skverer says posture management tools can help organizations inventory all
non-human identities (NHIs) in their environment —especially those that pose the
highest risk.

"Specifically, for the TTPS used by Midnight Blizzard, these tools would
highlight an unused OAuth application, having over-permissive access to
impersonate every user when authenticating to Office 365 Exchange," he says.




ABOUT THE AUTHOR(S)

Jai Vijayan, Contributing Writer



Jai Vijayan is a seasoned technology reporter with over 20 years of experience
in IT trade journalism. He was most recently a Senior Editor at Computerworld,
where he covered information security and data privacy issues for the
publication. Over the course of his 20-year career at Computerworld, Jai also
covered a variety of other technology topics, including big data, Hadoop,
Internet of Things, e-voting, and data analytics. Prior to Computerworld, Jai
covered technology issues for The Economic Times in Bangalore, India. Jai has a
Master's degree in Statistics and lives in Naperville, Ill.

See more from Jai Vijayan, Contributing Writer
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