Chinese hackers stole tens of thousands of emails from U.S. State Department accounts after breaching Microsoft’s cloud-based Exchange email platform in May.
During a recent Senate staff briefing, U.S. State Department officials disclosed that the attackers stole at least 60,000 emails from Outlook accounts belonging to State Department officials stationed in East Asia, the Pacific, and Europe, as Reuters first reported.
Additionally, the hackers managed to obtain a list containing all of the department’s email accounts. The compromised State Department personnel primarily focused on Indo-Pacific diplomacy efforts.
“We need to harden our defenses against these types of cyberattacks and intrusions in the future, and we need to take a hard look at the federal government’s reliance on a single vendor as a potential weak point,” Senator Eric Schmitt said in a statement.
“I will continue to lead my colleagues in pushing for more answers to ensure China and other nefarious actors do not gain access to the federal government’s most sensitive information.”
In July, Microsoft revealed that beginning on May 15, 2023, threat actors successfully breached Outlook accounts associated with approximately 25 organizations. The compromised organizations include the U.S. State and Commerce Departments and certain consumer accounts presumably linked to them.
Microsoft did not disclose specific details regarding the affected organizations, government agencies, or countries impacted by this email breach.
National Security Council spokesperson Adam Hodge confirmed the incident in July, saying that the attackers only gained access to unclassified systems.
“Last month, US government safeguards identified an intrusion in Microsoft’s cloud security, which affected unclassified systems,” Hodge said.
“Officials immediately contacted Microsoft to find the source and vulnerability in their cloud service. We continue to hold the procurement providers of the US Government to a high security threshold.”
Email breaches linked to Chinese cyberspies
These attacks have been attributed to a cyber-espionage collective known as Storm-0558, suspected of being focused on obtaining sensitive information by infiltrating the email systems of their targets.
Earlier this month, Microsoft disclosed that the threat group first obtained a consumer signing key from a Windows crash dump, a breach facilitated after compromising the corporate account of a Microsoft engineer, which enabled access to the government email accounts.
The stolen Microsoft Account (MSA) key was employed to compromise Exchange Online and Azure Active Directory (AD) accounts by exploiting a previously patched zero-day validation vulnerability in the GetAccessTokenForResourceAPI. The flaw allowed the attackers to generate counterfeit signed access tokens, which allowed them to impersonate accounts within the targeted organizations.
In response to the security breach, Microsoft revoked the stolen signing key and, following investigations, found no additional instances of unauthorized access to customer accounts through the same method of access token forgery.
Under pressure from the Cybersecurity and Infrastructure Security Agency (CISA), Microsoft has also agreed to broaden access to cloud logging data at no cost, which would help network defenders identify potential breach attempts of a similar nature in the future.
Previously, such logging capabilities were exclusively accessible to customers with Purview Audit (Premium) logging licenses. Because of this, Microsoft faced criticism for impeding organizations from promptly detecting Storm-0558’s attacks.