Microsoft and Japan's National Police Agency have jointly dismantled a phishing operation that sent more than 1 billion fraudulent emails and text messages to organizations across 150 countries since January 2026, with over 750 million of those messages directed specifically at Microsoft customers. The action was announced on Tuesday under an order from the U.S. District Court for the Southern District of Florida.

The operation brought together Microsoft's Digital Crimes Unit, the Japan Cybercrime Control Center, Health-ISAC, and private cybersecurity firms including Resecurity, Cloudflare, Oracle, Proofpoint, and TRM Labs. The U.S. Secret Service also participated in the investigation.

The Marketplace

At the center of the operation sits YAM Store, which Microsoft internally tracks as Storm-3119. Investigators describe it as a Chinese-language underground marketplace that sold access to compromised Microsoft 365 and Google cloud environments, software licenses, storage space, and stolen credentials. Chinese-speaking actors are believed to have built the phishing kits it supported, according to Microsoft.

To stock the marketplace, operators bought up expired domains from defunct companies, rebuilt their websites to look active, and used those fake identities to register new cloud accounts. Some went further and built fake companies from scratch, using AI-generated documents, images, and business content to pass verification checks. Once inside Microsoft environments, attackers used stolen application credentials to manage accounts and abused SharePoint and OneDrive to store and deliver phishing content.

Three Phishing Kits

YAM Store operated alongside three phishing kits that Microsoft collectively tracks as Storm-2990: CoGUI, Haozi, and Iron Man. Each kit was rented out on a subscription model, letting operators with little technical background run large, automated fraud campaigns against targets worldwide.

Iron Man was the most developed of the three. Security firm Resecurity, which assisted in the investigation, found that the kit's infrastructure held 911 published build versions and roughly 2,360 phishing packages covering 130 countries and geographic areas, with the catalog receiving updates as recently as October 1, 2026. Its template library contained over 2,300 lure designs impersonating banks, retailers, delivery services, streaming platforms, and government agencies, including traffic and parking authorities. The kit also included a payment-card capture module that collected card numbers, expiry dates, and CVV codes from victims.

To block security researchers and automated scanners, the kits used geofencing, IP filtering lists, and fake CAPTCHA gates that stopped bots while letting real victims through. Operators also received real-time Telegram alerts whenever a victim entered credentials, and some ran live sessions to interact with victims as they responded to lures.

"Over 1 billion malicious email and SMS messages were sent since the start of 2026. More than 750 million of those were aimed directly at Microsoft customers." [Microsoft Digital Crimes Unit, October 2026]

Some campaigns also used device-code phishing, a technique that misuses Microsoft 365's standard device sign-in flow. Rather than stealing passwords directly, attackers tricked victims into entering a short device code, which gave them a valid login token and full access to the account. Microsoft has since recommended that organizations review whether device-code sign-in is necessary and consider restricting it through access policies.

The Takedown

The Florida court order gave Microsoft and Health-ISAC authority to seize and redirect the core domains behind YAM Store, CoGUI, and Iron Man. Microsoft deactivated more than 20,000 accounts linked to YAM Store and blocked over 100,000 domains used for impersonation and fraud. TRM Labs worked to trace and freeze cryptocurrency assets connected to the operation. Infrastructure removal was still continuing as of Tuesday.

Japan's National Police Agency had alerted Microsoft to the operation in late 2025, after a surge of fraud hit Japanese individuals and businesses. Japan ranked as the single most targeted country in the campaign, followed by the United States, Australia, and India. The healthcare sector, financial services companies, wholesale distributors, and IT firms absorbed the largest share of attacks.

No arrests have been announced.

What the wider pattern tells us 

The YAM Store action follows a March 2026 takedown of Tycoon 2FA, a separate phishing platform that Europol and Microsoft dismantled together with law enforcement from Latvia, Lithuania, Portugal, Poland, Spain, and the United Kingdom. Tycoon 2FA used adversary-in-the-middle techniques to intercept login credentials and session cookies in real time, bypassing multi-factor authentication and reaching nearly 100,000 organizations since it first appeared in 2023. At its peak in November 2025, the platform was generating over 30 million phishing messages a month. That case resulted in a civil complaint naming Saad Fridi as the alleged creator.

Both operations ran on the same basic model: platforms that sold ready-made attack tools to buyers with little technical skill, letting them run large fraud campaigns cheaply. Microsoft advised organizations to treat email from education and nonprofit domains with extra care, since YAM Store sold cloud accounts tied to real .edu and .org tenants obtained through the domain-buying scheme, making fraudulent emails look like they came from real institutions.