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Microsoft 365 Users Targeted in New Device Code Phishing Campaign

 



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.

FBI Warns Russian-Linked Hackers Have Shifted Signal Phishing Campaign to Steal Backup Recovery Keys

 


The U.S. Federal Bureau of Investigation (FBI) and the Cybersecurity and Infrastructure Security Agency (CISA) have issued an updated public service announcement warning that Russian intelligence-linked threat actors have expanded an ongoing phishing campaign targeting Signal users. Rather than attempting to intercept authentication codes alone, the attackers are now seeking victims' Signal Backup Recovery Keys, enabling them to restore encrypted cloud backups and gain access to historical conversations.

The latest advisory builds on an alert released in March 2026, when the agencies disclosed that Russian-backed operators were targeting users of commercial messaging applications, particularly Signal, through carefully crafted phishing campaigns. Those earlier attacks focused on compromising accounts by deceiving users into handing over verification codes, account PINs, or linking unauthorized devices to their Signal accounts, instead of defeating the application's end-to-end encryption.

According to the FBI, the threat actors have refined their social engineering techniques by impersonating automated Signal support accounts and introducing a new objective: convincing users to disclose the recovery keys that protect their encrypted backups.

The agencies said the campaign continues to concentrate on individuals considered to be of intelligence value, including current and former U.S. government officials, government personnel from allied nations, military members, political figures, journalists, and officials located in Ukraine.

The activity has been attributed to Russian Intelligence Services (RIS), including officers associated with Russia's Federal Security Service (FSB) Border Guards and additional actors operating on behalf of the Russian military. Security researchers publicly track the activity under the designations UNC5792 and UNC4221.

Phishing campaign evolves beyond account hijacking

The updated advisory describes a notable change in the attackers' methods. Earlier phishing attempts largely sought one-time verification codes, Signal PINs, or persuaded victims to connect attacker-controlled devices to their accounts. The current campaign instead attempts to obtain the cryptographic recovery key used by Signal's Secure Backups feature.

To begin the attack, the operators pose as Signal's support team and distribute fraudulent messages claiming the messaging platform is introducing mandatory two-factor verification following an alleged increase in attacks carried out by hackers from Iran and post-Soviet countries. The messages falsely state that the security changes require users to configure Signal Backups in order to avoid losing conversations and media files.

Victims are instructed to navigate through the application's backup settings, enable Secure Backups, reveal the Backup Recovery Key, copy it to the clipboard, and complete what appears to be a legitimate setup process.

Signal's Secure Backups feature allows users to store encrypted copies of conversations on the company's cloud infrastructure. Those backups remain protected through end-to-end encryption, with the Backup Recovery Key serving as the only credential capable of decrypting and restoring the archived data. Because Signal does not retain this key, anyone who obtains it can restore the encrypted backup onto another device.

After victims complete the initial steps, the attackers send a second phishing message while continuing to impersonate Signal support. This follow-up communication claims the user's account is experiencing a synchronization problem and warns that stored messages and media could be permanently lost unless immediate action is taken.

The fraudulent notification instructs users to revisit the backup settings, copy the Backup Recovery Key once again, and paste it directly into the conversation under the pretense of preventing data loss.

If victims comply, the attackers obtain the recovery key and use it to restore the encrypted backup on devices under their control. This grants access to previously archived communications, including private conversations and group chats.

The FBI emphasized that these attacks do not compromise Signal's encryption itself. Instead, they rely entirely on social engineering techniques that manipulate users into voluntarily surrendering the credentials needed to decrypt their own backups.

Compromised recovery keys remain a risk even after creating a new account

The updated advisory also highlights a recovery scenario that affected users may easily overlook.

According to the FBI, creating a new Signal account with the same phone number does not invalidate a Backup Recovery Key that has already been stolen. If attackers previously acquired the key, they may still be able to access any encrypted backups downloaded before the compromise was discovered.

To prevent future backup restorations using a compromised credential, users should generate a new Backup Recovery Key through Signal's backup settings. Creating a replacement key invalidates the previous one for subsequent backup downloads. However, the agencies cautioned that this action cannot revoke access to backups that attackers have already restored using the stolen key.

Agencies urge users to remain cautious of unsolicited support messages

The FBI and CISA reminded users that legitimate messaging platform support teams communicate only through official company email channels. They do not request verification codes through the application itself, nor do they send unsolicited messages instructing users to verify accounts, restore backups, or disclose recovery credentials.

Anyone who believes they may have interacted with the phishing campaign is encouraged to report the incident to the FBI's Internet Crime Complaint Center (IC3), a local FBI field office, or CISA.

The advisory accentuates the fact that well-designed encryption remains effective only when the credentials protecting it remain under the user's control. Rather than attempting to break modern cryptography, state-sponsored threat actors are increasingly directing their efforts toward manipulating trusted users into revealing the keys that unlock their own protected data.

Cyber Security: Six Cyber Threats to Look Out for in 2026


With industries being digitized, cybercrime is also advancing. This year, besides being opportunistic, threats have also become highly targeted, intelligent, and automated. 

The data comes from UK Government’s Cyber Security Breaches Survey 2025, which hints that 43% of businesses and 30% of charities listed an attack or a cyber breach or attack in the past 12 months. That’s a surprising 61,000 charities and 612,000 businesses impacted. 

Despite the data, businesses can lower their risk of cyber threats. But it is important to understand these key risks to stay safe and prepare for the next danger.

Six rising common cyber threats

1. Deepfakes: Deepfakes have shifted from niche technology to a major threat. Hackers nowadays use AI-generated audio and media to mimic organization staff. This can be risky in procurement or finance, where hackers push staff to send funds, share personal data, or approve finances, where the hackers pose as business leaders.

2. Supply-chain attacks: Instead of targeting organizations directly, hackers are targeting third-party vendors to get access to various firms at once via supply-chain attacks. The attack tactic abuses trust and internal security sometimes may not address all the threats in the supply chain. One hacked vendor can prompt a domino effect throughout hundreds of businesses. 

3. AI-powered phishing hacks: Phishing is one of the most common attacks in the past 12 months, and the tactic has changed significantly over the years. Most of the phishing attacks today are supported by AI tools and hackers are copying internal comms.

4. Credential stuffing attack: Weak passwords are the biggest reasons for hacks these days. In such attacks, hackers use stolen login credentials from past hacks and test them automatically across distinct platforms.

5. IoT and device flaws: As IoT is increasing, the hack surface also widens. Many devices such as sensors, cameras and industrial machinery still have limitations. Hackers abuse these flaws to access larger corporate networks. Traditional cyber security methods tend to ignore these flaws, and this has resulted in a significant risk.

6. Cloud errors: A simple thing such as exposed storage bucket or false access setting can expose sensitive data publicly accessible. These cases don’t get hacked as the information is unprotected. Currently, cloud storage environments are advanced, and building robust configuration hygiene has become a top critical priority.

Hackers Exploit KnowledgeDeliver Bug to Install Web Shells


Threat actors abused a critical zero-day bug in a server that ran a KnowledgeDeliver LMS to install the Godzilla. The bug is a deserialization problem tracked as CVE-2026-5426 and can be abused without verification. It originates from the use of “shared hardcoded machine key in the web portal configuration,” said Bleeping Computer, throughout all KnowledgeDeliver consumer deployments. 

Deserialization of ViewState

Hackers found the stolen machine key and used it in ViewState deserialization campaigns to sign infected ViewState payloads and launch remote code execution (RCE) at the OS level. 

In 2025, Mandiant responded to a campaign on a KnowledgeDeliver server and said that in the beginning, the bug was abused as a zero-day to deploy a compromised script into the web platform.

Attack tactic

The compromise was also possible as threat actors used “identical pre-shared ASP.NET machine keys across multiple customer deployments,” the experts said. 

According to Mandiant, “KnowledgeDeliver installations deployed before Feb. 24, 2026 relied on a standardized web.config file provided by the vendor. This configuration file contained hardcoded machineKey values used by the ASP.NET framework to encrypt and sign data, including ViewState payloads.”

Experts said that the code on the platform lured users to download a malicious installer, which compromised the machine with a Cobalt Strike beacon by deploying a backdoor. 

The encrypted payload used a key “that used the name of the compromised organization, which indicated that the threat actor prepared this payload specifically for the targeted organization,” Mandiant report said.

Similar attacks in 2025

In August last year, experts from ASEC also disclosed that Godzilla was planted in ASP.NET environments in ViewState deserialization attacks against firms in the finance industry.

Threat actors could modify a JavaScript file with code that asked users to run a ‘security authentication plugin’ and install a malicious script from a domain that hackers used.

Hackers targeting unsecured machines

In recent years, threat actors are increasingly exploiting unsafe  machine keys in Viewstate deserialization attacks against web platforms for a few products.

Threat actors utilized a hardcoded machine key in March of last year to create a malicious payload that gave them access to Gladinet CenterStack's secure file-sharing servers.

After obtaining the machine key to generate signed malicious ViewState payloads, hackers gained access to 85 Microsoft SharePoint systems in July 2025.

Additionally, state-sponsored actors utilized ViewState deserialization assaults to install WeepSteel, a spying tool that revealed the ASP.NET machine key on Sitecore servers.

Researchers Show How ChatGPT Summaries Could Be Used for Phishing Attacks

 


Researchers have identified a technique that could allow malicious content embedded within a web page to appear inside ChatGPT responses, creating an opportunity for phishing, tracking, and social-engineering attacks through a platform users generally regard as trustworthy.

The attack method, named "ChatGPhish" by cybersecurity firm Permiso Security, focuses on how ChatGPT handles Markdown-formatted content when summarizing information from external websites. Markdown is a commonly used formatting language that allows web content to include elements such as hyperlinks and images.

According to Permiso Security researcher Andi Ahmeti, ChatGPT's web interface trusts Markdown links and image URLs originating from third-party pages that users ask the assistant to summarize. When a response is generated, the platform can automatically retrieve those images and present hyperlinks as active, clickable elements within the chatbot's interface.

In a scenario outlined by the researchers, an attacker could place a small hidden payload within a web page. If a user later asks ChatGPT to summarize that page, the embedded content may become part of the model's processing context. During response rendering, attacker-controlled images could be automatically requested, potentially exposing information such as the visitor's IP address, browser User-Agent string, and Referer data.

The researchers also found that links embedded in a manipulated page could appear as legitimate clickable items inside the AI-generated summary. Beyond directing users to phishing destinations, attackers could display fabricated security notifications, account-warning messages designed to imitate system alerts, or QR codes hosted on attacker-controlled infrastructure such as an Amazon S3 bucket. A victim scanning such a code with a mobile device could be redirected to a malicious destination, bypassing certain desktop-based URL filtering mechanisms and enterprise security controls.

The research adds to a growing body of evidence showing that AI-powered summarization tools can become unintended delivery channels for attacker instructions. Earlier this year, Permiso Security disclosed a separate attack involving Microsoft Copilot, where specially crafted instructions hidden inside an email influenced the output generated by the AI assistant. That technique was classified as a cross-prompt injection attack, also known as indirect prompt injection.

According to the researchers, the primary issue is not simply that prompt injection is possible. The more significant concern is how the manipulated content is ultimately presented to the user. A standard web page summarized by ChatGPT can cause phishing links, deceptive warnings, QR codes, and remotely hosted content to be displayed directly inside the assistant's interface, giving attacker-controlled material an appearance of legitimacy.

As AI assistants become common tools for workplace research, document review, and information gathering, this behavior introduces a new risk. Any web page processed by an employee could potentially contain hidden instructions or malicious content capable of influencing both the generated summary and the way that information is displayed.

Permiso Security noted that this shifts phishing activity beyond traditional delivery methods. Users no longer need to open a suspicious attachment or interact with an obviously fraudulent email. In some cases, simply asking an AI assistant to summarize a webpage may expose them to attacker-controlled content.

The disclosure arrives alongside research from Adversa AI detailing two attack techniques aimed at AI coding assistants and agentic development tools. The first, known as SymJack, allows a malicious code repository to achieve remote code execution through an AI-powered coding assistant.

According to Adversa AI researcher Rony Utevsky, the attack relies on convincing the AI assistant to perform what appears to be a harmless file-copy operation. The destination, however, is a symbolic link pointing to the assistant's own configuration file. As a result, attacker-controlled content is written into the configuration. When the assistant is restarted, a malicious Model Context Protocol (MCP) server is launched and executes arbitrary code using the victim's privileges.

The second technique, called TrustFall, uses a repository containing a malicious MCP server together with configuration settings that automatically approve its execution. A developer only needs to clone or open the repository in an AI coding environment and accept a folder-trust prompt. Once that action is taken, the attacker-controlled MCP server can start automatically without requiring additional tool approval, running with the same operating-system permissions as the developer.

Adversa AI explained that a victim who clones the repository, launches Claude, and accepts the generic trust prompt effectively allows the malicious MCP server to start as a native process on the machine. The payload executes immediately when the server starts, before additional prompts or tool requests occur.

The ChatGPhish findings emerge amid a steady stream of research examining weaknesses in modern AI systems, coding agents, and autonomous workflows.

Researchers recently described a jailbreak method called Involuntary In-Context Learning (IICL), which exploits the tension between a model's contextual learning behavior and its safety mechanisms to bypass protections in GPT-5.4.

Separate research from Cisco found that many AI security evaluations fail to reflect how real-world attackers operate. Rather than relying on a single prompt, attackers often use multiple interactions, gradually changing their wording, adopting different personas, and breaking objectives into smaller steps. Cisco argued that single-turn testing overlooks these techniques because real attacks frequently unfold across extended conversations.

Additional research has uncovered a vulnerability affecting Anthropic Claude Code in which a user-level configuration file, "~/.claude.json," can be altered through a rogue npm package. The attack enables modification of MCP endpoints and can place an attacker between Claude Code and an OAuth-protected MCP server, creating an opportunity to capture authentication tokens used to access downstream software-as-a-service platforms.

Researchers have also documented a technique involving OpenClaw skills that appear harmless during installation but later retrieve remote updates. In one scenario, attackers can influence an AI agent through workspace files after instructing users to append specific content to a file called HEARTBEAT.md during setup.

Another study demonstrated how hidden text embedded inside phishing emails can manipulate AI-based email security products. Attackers concealed text taken from legitimate newsletters and romance novels to make malicious messages appear benign to automated filtering systems.

LayerX researchers separately disclosed a flaw known as ClaudeBleed affecting Claude's Chrome extension. According to the company, any browser extension, including one without elevated permissions, could communicate with Claude's language model through the extension's content script because the code does not adequately verify the source of incoming instructions. This could allow another extension to issue commands and trigger actions through the AI assistant.

Cisco researchers also examined typographic prompt injection attacks against vision-language models. In these attacks, adversarial text is embedded inside images. The manipulated image may appear unreadable or resemble visual noise to humans and OCR-based filters while remaining interpretable to the target AI model.

Other recently disclosed vulnerabilities include flaws in Microsoft Semantic Kernel, tracked as CVE-2026-25592 and CVE-2026-26030, which researchers said could allow prompt-injection attacks to progress into host-level remote code execution.

Researchers additionally described the Neural Exec attack and abuse of the Unicode right-to-left-override function to bypass safety mechanisms protecting Apple's local AI models. The issue has since been addressed in iOS 26.4 and macOS 26.4.

A separate indirect prompt-injection vulnerability known as WebPromptTrap affected BrowserOS, an open-source agentic browser. The technique relied on hidden instructions embedded in an otherwise legitimate article to influence an AI-generated summary and persuade users to approve an authorization request. The issue was patched in BrowserOS version 0.32.0.

Research into the broader AI-agent ecosystem has uncovered persistent security weaknesses. An audit covering 3,984 skills published through ClawHub and skills.sh found that 534 skills, representing 13.4% of the total, contained at least one critical security issue. Researchers also identified 1,467 skills with broader weaknesses, including malware distribution risks, prompt-injection opportunities, exposed secrets, hard-coded API credentials, insecure handling of authentication data, and unsafe exposure to third-party content.

Additional studies identified attacks against NemoClaw, NVIDIA's reference framework for securing OpenClaw agents. Researchers demonstrated methods for extracting OpenClaw data through the platform's default sandbox configuration using either a malicious GitHub repository or a compromised npm package.

Security researchers are increasingly examining how advances in AI capability could affect offensive cyber operations. According to researchers at Palo Alto Networks Unit 42, more capable AI models could allow attackers to exploit both newly discovered and previously known vulnerabilities at a scale, speed, and level of automation that has traditionally required specialized expertise.

Last month, Unit 42 presented a proof-of-concept AI agent called Zealot that was capable of carrying out cloud attack operations with limited human involvement. The system chained together reconnaissance, exploitation, privilege escalation, and data-exfiltration activities by leveraging known weaknesses and misconfigurations.

Researchers argue that cloud environments are particularly susceptible to this type of automation because most administrative functions are accessible through APIs, multiple discovery mechanisms exist for identifying resources, configuration errors remain common, and access control often depends heavily on credentials.

According to Unit 42 researchers Yahav Festinger and Chen Doytshman, current large language models are already capable of coordinating reconnaissance, exploitation, privilege escalation, and data theft activities with relatively little human guidance. The techniques themselves are not necessarily new. What is changing is the speed and scale at which those established attack patterns can now be executed through AI-assisted automation.

Microsoft Warns Passwords and SMS-Based 2FA Are No Longer Enough Against Modern Cyberattacks






Microsoft is intensifying its push toward passwordless security, warning that traditional passwords and older forms of two-factor authentication are becoming increasingly ineffective against modern phishing attacks powered by artificial intelligence.

In a statement released during World Passkey Day, Microsoft said the cybersecurity industry must reduce dependence on passwords and other “phishable” login methods by accelerating the adoption of passkeys. 

For years, technology companies encouraged users to strengthen account security by enabling two-factor authentication (2FA) or multi-factor authentication (MFA). Microsoft itself previously stated that MFA could block more than 99% of password-based attacks. However, cybercriminals have steadily adapted their tactics, particularly targeting SMS-based authentication systems through phishing pages, SIM-swapping schemes, session hijacking, and social engineering attacks.

The company now argues that passwords, even when paired with weak MFA methods like text-message verification codes, continue to leave accounts vulnerable. Microsoft described these older protections as “legacy” authentication methods that can still become entry points for attackers. 

Instead, Microsoft is promoting passkeys, which rely on cryptographic authentication rather than memorized passwords. A passkey stores a private digital key directly on a user’s device and only works on the legitimate website or application where it was created. Access is then confirmed through biometric verification, such as fingerprints or facial recognition, or through a device PIN. 

Security experts say this approach makes phishing significantly harder because passkeys cannot be reused on fake websites designed to imitate legitimate login pages. Unlike passwords or SMS codes, the authentication process is tied directly to the original domain. 

Microsoft also stressed that enabling passkeys alone is not enough if passwords and fallback authentication methods remain active on accounts. According to the company, weak backup options can still be exploited even after stronger protections are introduced. Microsoft has therefore continued removing older authentication systems across its ecosystem, including plans to eliminate security questions from password reset flows beginning in 2027. 

The urgency surrounding this transition has increased alongside the rapid growth of AI-generated phishing campaigns. Microsoft cited internal findings showing that AI-assisted phishing operations can achieve click-through rates as high as 54%, meaning more than half of targeted users may interact with malicious messages. 

Industry-wide adoption of passkeys is also accelerating. The FIDO Alliance estimates that more than five billion passkeys are already in use globally. Microsoft said hundreds of millions of users now sign into services such as OneDrive, Xbox, and Copilot using passkeys every day. 

Internally, Microsoft claims that over 99% of users within its environment now have access to phishing-resistant authentication methods. The company added that account recovery systems remain a critical security challenge because attackers increasingly target recovery processes instead of direct logins. 

Researchers and government agencies are broadly supporting the move toward passwordless security. The United Kingdom’s National Cyber Security Centre recently encouraged organizations and consumers to adopt passkeys, citing growing risks from AI-driven phishing and phishing-as-a-service platforms. 

Still, cybersecurity researchers caution that passkeys are not completely immune to attack. Recent academic research examining FIDO2 authentication methods found that while passkeys substantially raise the difficulty for attackers, sophisticated compromise techniques involving infected devices, session theft, or manipulated browser environments may still pose risks under certain conditions. 

Microsoft maintains that removing passwords and other phishable credentials remains essential as AI systems increasingly act on behalf of users across enterprise environments. If a single digital identity is compromised, attackers could potentially exploit connected AI agents to access systems, trigger workflows, and operate with existing permissions at machine speed.