Cybersecurity researchers have revealed a phishing campaign that is exploiting Microsoft's legitimate device authentication process to seize control of Microsoft 365 accounts, reflecting a broader shift in how cybercriminals are conducting identity-focused attacks. Rather than stealing passwords through counterfeit login pages, the operation manipulates victims into completing a genuine Microsoft authentication process, allowing attackers to obtain valid authentication tokens that grant direct access to compromised accounts.
The campaign, tracked by email security firm ZeroBEC, was observed between the final week of June and early July 2026. Investigators found that the attackers relied on collaboration-themed phishing lures that directed recipients to Microsoft's authentic device login experience instead of fraudulent credential harvesting websites. Behind the scenes, a backend broker generated Microsoft device authentication codes and continuously polled the authentication process until victims completed the sign-in sequence, enabling the attackers to capture valid authentication tokens without ever collecting passwords.
Researchers noted that the activity closely resembles techniques previously documented by Microsoft in its investigation of the threat cluster known as Storm-2372. That campaign, first disclosed in February 2025, used fake Microsoft Teams invitations and messaging-themed social engineering to persuade victims to enter attacker-generated device codes. Once authentication was completed, the attackers received valid access tokens that allowed them to take over Microsoft 365 accounts. Microsoft said Storm-2372 had targeted organizations across government, defense, healthcare, telecommunications, higher education, information technology, energy, and non-governmental sectors spanning Europe, North America, Africa, and the Middle East. The company also stated that the attacks abused legitimate authentication functionality rather than exploiting vulnerabilities in Microsoft products.
Although the latest campaign mirrors many of Storm-2372's tactics, ZeroBEC believes the operation is powered by a reusable phishing framework called DEBULL rather than the original threat actor itself. The researchers concluded that techniques once associated with advanced threat groups are now being packaged into reusable infrastructure that enables multiple operators to launch similar attacks with far less effort. This evolution reflects the continuing commercialization of identity-focused phishing operations, where sophisticated attack methods are increasingly offered through phishing-as-a-service platforms instead of being developed independently by individual threat actors.
At the center of the campaign is device code phishing, an attack technique that abuses the OAuth 2.0 Device Authorization Grant, a legitimate authentication mechanism designed for devices that cannot easily support traditional browser-based sign-ins. The workflow is commonly used by devices such as smart televisions, printers, conference room equipment, and other systems with limited input capabilities. Instead of entering credentials directly on those devices, users receive a short verification code that must be entered on another device through Microsoft's official authentication portal to complete the login process.
Threat actors exploit the separation between the device requesting authentication and the browser used to authorize it. Rather than creating counterfeit Microsoft login pages, attackers initiate their own device authentication session, obtain a legitimate verification code from Microsoft, and deliver that code to victims through convincing phishing emails. When recipients unknowingly enter the supplied code into Microsoft's authentic login page and complete the sign-in process, they authorize the attackers' session instead of their own, handing over valid authentication tokens that can be used to access Microsoft 365 resources. Because the victim is interacting with a genuine Microsoft service, traditional indicators of phishing, such as suspicious URLs or fake login portals, are largely absent.
Security researchers have increasingly warned that device code phishing represents a natural evolution of identity attacks. As organizations strengthened defenses against conventional credential phishing and adversary-in-the-middle attacks, threat actors shifted toward abusing trusted authentication workflows that require no password theft and can effectively circumvent multi-factor authentication protections by obtaining legitimate session tokens directly from users. Proofpoint recently reported a sharp increase in device code phishing activity during 2026, attributing the growth to publicly available criminal toolkits and the rapid expansion of phishing-as-a-service platforms that have made these techniques accessible to a wider range of cybercriminals.
A cyber operation believed to be linked to Iranian threat actors has been identified targeting Microsoft 365 environments, with a primary focus on organizations in Israel and the United Arab Emirates. The activity comes amid ongoing tensions in the Middle East and is still considered active.
According to research from Check Point, the campaign was carried out in three separate waves on March 3, March 13, and March 23, 2026. More than 300 organizations in Israel and over 25 in the U.A.E. were affected. Investigators also observed limited targeting in Europe, the United States, the United Kingdom, and Saudi Arabia.
The attackers focused on cloud-based systems used across a wide range of sectors, including government bodies, municipalities, transportation services, energy infrastructure, technology firms, and private companies. This broad targeting indicates an effort to access both public-sector systems and critical commercial operations.
The primary method used in the campaign is known as password spraying. In this technique, attackers attempt a small number of commonly used passwords across many accounts instead of repeatedly targeting a single account. This approach increases the chances of finding weak credentials while avoiding detection systems such as account lockouts or rate-limiting controls.
Security researchers noted that similar techniques have previously been associated with Iranian groups such as Peach Sandstorm and Gray Sandstorm. The current activity appears to follow a structured sequence. It begins with large-scale scanning and password attempts routed through Tor exit nodes to conceal the origin of the traffic. This is followed by login attempts, and in successful cases, the extraction of sensitive data, including email content from compromised accounts.
Analysis of Microsoft 365 logs revealed patterns consistent with earlier operations attributed to Gray Sandstorm. Investigators observed the use of red-team style tools and infrastructure, as well as commercial VPN services linked to hosting providers previously associated with Iran-linked cyber activity in the region.
To reduce risk, organizations are advised to monitor sign-in activity for unusual patterns, restrict authentication based on geographic conditions, enforce multi-factor authentication for all users, and enable detailed audit logs to support investigation in the event of a breach.
Renewed Activity from Pay2Key Ransomware Operation
In a related development, a U.S.-based healthcare organization was targeted in late February 2026 by Pay2Key, an Iran-linked ransomware group with connections to a broader threat cluster known by multiple aliases. The group operates under a ransomware-as-a-service model and was first identified in 2020.
The version used in this attack represents an upgrade from campaigns observed in July 2025, incorporating improved techniques for evasion, execution, and anti-forensic activity. Reports from Beazley Security and Halcyon indicate that no data was exfiltrated in this instance, marking a shift away from the group’s earlier double-extortion strategy.
The intrusion is believed to have begun through an unknown access point. Attackers then used legitimate remote access software such as TeamViewer to establish a foothold. From there, they harvested credentials to move laterally across the network, disabled Microsoft Defender Antivirus by falsely indicating that another antivirus solution was active, and interfered with system recovery processes. The attackers then deployed ransomware, issued a ransom note, and cleared logs to conceal their activity.
Notably, logs were deleted at the end of the attack rather than at the beginning, ensuring that even the ransomware’s own actions were removed, making forensic analysis more difficult.
The group has also adjusted its affiliate model, offering up to 80 percent of ransom payments, compared to 70 percent previously, particularly for attacks aligned with geopolitical objectives. In addition, a Linux variant of the ransomware has been identified in the wild. This version is configuration-driven, requires root-level access to execute, and is designed to navigate file systems, classify storage mounts, and encrypt data using the ChaCha20 encryption algorithm in either full or partial modes.
Before encryption begins, the malware weakens system defenses by stopping services, terminating processes, disabling security frameworks such as SELinux and AppArmor, and setting up a scheduled task to execute after system reboot. These steps allow the ransomware to run more efficiently and persist even after restarts.
Further developments point to coordination among pro-Iranian cyber actors. In March 2026, operators associated with another ransomware strain encouraged affiliates to adopt an alternative tool known as Baqiyat 313 Locker, also referred to as BQTLock, due to a surge in participation requests. This ransomware, which operates with pro-Palestinian motives, has been used in attacks targeting the U.A.E., the United States, and Israel since July 2025.
Cybersecurity experts note that Iran has a long history of using cyber operations as a response to political tensions. Increasingly, ransomware is being integrated into these efforts, blurring the line between financially motivated cybercrime and state-aligned cyber activity. Organizations need to adopt continuous monitoring, strong authentication measures, and proactive defense strategies to counter emerging threats.
Canadian outsourcing and digital services firm Telus Digital has confirmed that it experienced a cybersecurity incident after threat actors alleged they had extracted an enormous volume of data, estimated at nearly one petabyte, over a prolonged period of unauthorized access.
Telus Digital operates as the outsourcing and digital solutions division of Telus. The company provides services such as customer support, content moderation, artificial intelligence data operations, and other business process outsourcing functions to organizations around the world. Because firms in this sector often manage customer interactions, billing systems, and internal authentication tools on behalf of multiple clients, they are frequently targeted by attackers aiming to gain access to large datasets through a single compromise.
The breach has been linked to a threat group known as ShinyHunters, which claims it obtained a wide range of customer-related data connected to Telus Digital’s outsourcing services, along with call records tied to Telus’ consumer telecommunications operations.
Reports about a possible breach had surfaced earlier this year, and inquiries were made to the company at the time, though no response was received then. Telus has now acknowledged the incident, stating that it is investigating what information may have been accessed and which customers could be affected.
In its official statement, the company said unauthorized access was identified in a limited number of systems. It added that immediate steps were taken to contain the activity and prevent further intrusion. Telus also stated that its operations remain fully functional, with no evidence of disruption to customer connectivity or services. The company confirmed that external cyber forensics specialists have been engaged and that law enforcement authorities are involved. It further noted that additional safeguards have been implemented and that affected customers will be notified where appropriate.
Sources indicated that the attackers attempted to extort the company, but Telus did not engage in communication with them.
Attack Method and Data Exposure Claims
After learning that the company was not negotiating, the attackers were contacted for further details regarding the incident.
According to their claims, the intrusion began with access to Google Cloud Platform credentials that were previously exposed in data linked to the Salesloft Drift breach. In that earlier incident, attackers extracted Salesforce data belonging to approximately 760 organizations, including customer support tickets. These records were then examined to locate credentials, authentication tokens, and other sensitive information, which could be reused to access additional systems.
The threat actors stated that they identified credentials associated with Telus within that dataset. These credentials allegedly enabled them to access multiple internal systems, including a large BigQuery data environment. After extracting initial data, they reportedly used the tool trufflehog to scan for further secrets, allowing them to expand their access into additional parts of the company’s infrastructure.
The group claims that the total amount of data taken is close to one petabyte, though this figure has not been independently verified. They also shared the names of 28 well-known companies that they allege were affected. However, these claims have not been confirmed, and the identities of those organizations remain undisclosed.
The data described by the attackers covers a wide range of business operations. This includes information related to customer support services, call center activities, agent performance metrics, AI-powered support systems, fraud detection mechanisms, and content moderation processes. In addition, they claim to have accessed source code, financial records, Salesforce data, background verification documents, and recordings of customer service calls.
The breach is also said to affect Telus’ telecommunications operations, particularly its consumer fixed-line services. The allegedly exposed data includes detailed call logs, voice recordings, and campaign-related information. Samples of these call records reportedly contain timestamps, call durations, originating and receiving numbers, and technical metadata such as call quality indicators.
Overall, the nature of the exposed data appears to vary significantly depending on the organization, indicating that multiple business functions across different clients may have been impacted.
The attackers stated that they began extortion attempts in February, demanding $65 million in exchange for not releasing the stolen data. The company did not respond to these demands.
Telus has indicated that further updates may be provided as its investigation progresses.
Who Are ShinyHunters
The name ShinyHunters has been associated with various individuals and cyber incidents over time, but the group currently operating under this identity has emerged as one of the more active data extortion actors in recent months. Their operations have largely focused on compromising cloud-based platforms, particularly those connected to enterprise software ecosystems.
The group has been linked to incidents involving major organizations such as Google, Cisco, and Match Group, among others.
More recently, their tactics have expanded to include voice phishing, or vishing, attacks. In these cases, employees are contacted by individuals posing as IT support staff and are persuaded to reveal login credentials or multi-factor authentication codes through fraudulent websites. The group has also been observed using device code phishing techniques to obtain authentication tokens linked to identity platforms such as Microsoft Entra.
Once valid credentials and authentication codes are obtained, attackers can take control of single sign-on accounts and gain access to interconnected enterprise services, including Salesforce, Microsoft 365, Google Workspace, SAP, Slack, Adobe, Atlassian, Zendesk, and Dropbox.
Security Implications
This incident reflects a broader trend in which attackers reuse previously stolen data to launch new intrusions. It also highlights the elevated risk associated with outsourcing providers that centralize sensitive operations for multiple organizations.
Cybersecurity experts increasingly note that modern attacks often occur in stages, where one breach creates opportunities for subsequent compromises. As businesses continue to rely on cloud platforms and third-party service providers, the potential scale and impact of such incidents continue to grow.
The situation is currently under investigation, and additional verified details are expected as more information surfaces.
Cybercriminals are increasingly targeting Microsoft Teams, utilizing the platform for sophisticated phishing, vishing, and ransomware campaigns. Exploiting Teams' widespread use, attackers employ social engineering tactics to deceive users and extract sensitive data. Methods range from fake job offers to malicious file sharing, aiming to infiltrate accounts and compromise organizational networks.
One notable tactic involves bypassing multifactor authentication (MFA). Threat actors, reportedly linked to the SolarWinds attack, create fraudulent “onmicrosoft.com” subdomains designed to mimic legitimate security entities. They send chat requests via Microsoft Teams, prompting users to enter a code into the Microsoft Authenticator app. This action grants attackers unauthorized access to Microsoft 365 accounts, enabling data theft or the integration of malicious devices into corporate networks.
The Black Basta ransomware group employs a different strategy by overwhelming users with spam emails and impersonating IT support staff on Teams. Claiming to assist with email issues, they persuade victims to install remote desktop tools, providing attackers with direct access to deploy malware. This includes Trojans and ransomware designed to exfiltrate sensitive data and compromise systems.
Another prevalent scheme involves fake job offers. Scammers contact individuals with fabricated employment opportunities, sometimes conducting entire interviews via Microsoft Teams chat. These scams often escalate to requests for personal information, such as Social Security numbers or tax details. In some cases, victims are asked to pay for materials or services, resulting in financial loss and potential identity theft.
Attackers also impersonate HR personnel, sending phishing messages about urgent policy updates. These messages frequently include malicious files disguised as legitimate updates. Once downloaded, malware like DarkGate is installed, granting attackers control over the victim’s system and network.
Additionally, compromised Microsoft 365 accounts are used to distribute malicious files through Teams chats. These files often appear as PDFs with double extensions, deceiving users into downloading executable malware. Once activated, these programs can breach data and facilitate deeper network infiltration.
Vigilance is essential in countering these threats. Users should verify unexpected messages, invitations, or file-sharing requests, especially those containing links or urgent calls to action. Tools that check link safety and domain age can help detect phishing attempts.
Organizations should prioritize employee education on recognizing scams and enforcing robust cybersecurity protocols. By staying informed and cautious, users can mitigate risks and safeguard against cyberattacks targeting Microsoft Teams.
Microsoft has finally turned a page in making the internet safer by offering protection against shared passwords. The establishment of sharing the same password among different users, for account management or accessing team resources, was a common practice but unsafe in the past. Such practices increase the likelihood of illegal access to data that might lead to a breach. At the Ignite 2024 developer conference, Microsoft revealed the solution to this problem: encrypted password sharing for users on Microsoft 365.
Simplifying Password Sharing for Microsoft 365 Users
Soon, a new feature for Microsoft 365 Business Premium, E3, and E5 subscribers will roll out. It lets administrators deploy encrypted passwords in the browser Microsoft Edge for both corporate and web sites. This will be shared amongst designated users, thus allowing them to log on smoothly at these web sites without ever having to see the actual passwords.
According to group product manager for Edge enterprise at Microsoft, Lindsay Kubasik, this feature diminishes the possibility of unauthorized access and enhances organizational security. Because the encrypted passwords are uniformly distributed and only to a configured group of users, it keeps any organization from being exposed to security threats. The deployment will be gradual over the next few months with the idea of improving password management for enterprise users.
Essential Security Tips for Microsoft Edge Users
While firms benefit from shared encrypted passwords, Microsoft recommends that personal consumers of the Edge browser eliminate password sharing outright. Shared password use may increase vulnerabilities and become an entry point for many cyberattacks.
For users, Edge will automatically encrypt sensitive data such as passwords, credit card details, and cookies when stored locally on a device. This means such data will stay safe, with access limited only to the logged-in user. Even if an attacker gains admin access to the device, they cannot retrieve plaintext passwords unless they also obtain the user’s operating system credentials.
Best Practices for Password Security
Microsoft is keen on proper security practice, recommending that all users employ strong passwords, two-factor authentication, and even password managers as online account protection tools. Another alternative: passkeys, essentially biometric or device-based authentication methods, can eliminate reliance on a traditional password altogether.
The Bottom Line
Microsoft’s encrypted password sharing marks a pivotal advancement in digital security for enterprise users, setting a new standard for password management. For individual users, adopting recommended security practices remains crucial to staying protected in an increasingly digital world.
A major IT outage has affected a wide array of global institutions, including hospitals, major banks, media outlets, and airlines. The disruption has hindered their ability to offer services, causing widespread inconvenience and operational challenges.
International airports across India, Hong Kong, the UK, and the US have reported significant issues, with numerous airlines grounding flights and experiencing delays. In the US, major airlines such as United, Delta, and American Airlines implemented a "global ground stop" on all flights, while Australian carriers Virgin and Jetstar faced delays and cancellations. According to aviation analytics firm Cirium, over 1,000 flights worldwide have been cancelled due to the outages.
At Indira Gandhi International Airport in Delhi, passengers experienced "absolute chaos," with manual processes replacing automated systems. Similar situations were reported in airports in Tokyo, Berlin, Prague, and Zurich, where operations were significantly hampered.
Emergency services and hospitals have also been severely impacted. In the US state of Alaska, officials warned that the 911 system might be unavailable, and some hospitals have had to cancel surgeries. In Australia, however, authorities confirmed that triple-0 call centres were unaffected.
Hospitals in Germany and Israel reported service disruptions, while GP services in the UK were also affected. These interruptions have raised concerns about the ability of medical facilities to provide timely care.
The media sector did not escape the impact, with many broadcast networks in Australia experiencing on-air difficulties. Sky News UK went off air for a period but has since resumed broadcasting. Retail operations were also disrupted, with supermarkets like Coles in Australia facing payment system failures, forcing the closure of self-checkout tills.
Cybersecurity firm CrowdStrike has confirmed that a defective software update for its Microsoft Windows hosts caused the outage. In a statement, CrowdStrike assured that the issue had been identified, isolated, and a fix deployed, emphasising that the incident was not a cyberattack. They advised organisations to communicate with CrowdStrike representatives through official channels to ensure proper coordination.
Earlier in the day, a Microsoft 365 service update had noted an issue impacting users' ability to access various Microsoft 365 apps and services. Microsoft later reported that most services were restored within a few hours.
The outage has highlighted the vulnerabilities of global IT systems and the widespread reliance on third-party software. A spokesperson for Australia's home affairs ministry attributed the issues to a technical problem with a third-party software platform used by the affected companies. The country's cybersecurity watchdog confirmed that there was no evidence of a malicious attack.
As companies scramble to resolve the issues, the incident serves as a stark reminder of the critical need for robust IT infrastructure and effective crisis management strategies. The global scale of the disruption underscores the interconnected nature of modern technology and the potential for widespread impact when systems fail.
This incident will likely prompt a reevaluation of cybersecurity measures and disaster recovery plans across various sectors, emphasising the importance of resilience and preparedness in the digital age.