Schneier on Security

US Cyber Safety Review Board on the 2023 Microsoft Exchange Hack

The US Cyber Safety Review Board released a report on the summer 2023 hack of Microsoft Exchange by China. It was a serious attack by the Chinese government that accessed the emails of senior US government officials.

From the executive summary:

The Board finds that this intrusion was preventable and should never have occurred. The Board also concludes that Microsoft’s security culture was inadequate and requires an overhaul, particularly in light of the company’s centrality in the technology ecosystem and the level of trust customers place in the company to protect their data and operations. The Board reaches this conclusion based on:

1. the cascade of Microsoft’s avoidable errors that allowed this intrusion to succeed;
2. Microsoft’s failure to detect the compromise of its cryptographic crown jewels on its own, relying instead on a customer to reach out to identify anomalies the customer had observed;
3. the Board’s assessment of security practices at other cloud service providers, which maintained security controls that Microsoft did not;
4. Microsoft’s failure to detect a compromise of an employee’s laptop from a recently acquired company prior to allowing it to connect to Microsoft’s corporate network in 2021;
5. Microsoft’s decision not to correct, in a timely manner, its inaccurate public statements about this incident, including a corporate statement that Microsoft believed it had determined the likely root cause of the intrusion when in fact, it still has not; even though Microsoft acknowledged to the Board in November 2023 that its September 6, 2023 blog post about the root cause was inaccurate, it did not update that post until March 12, 2024, as the Board was concluding its review and only after the Board’s repeated questioning about Microsoft’s plans to issue a correction;
6. the Board’s observation of a separate incident, disclosed by Microsoft in January 2024, the investigation of which was not in the purview of the Board’s review, which revealed a compromise that allowed a different nation-state actor to access highly-sensitive Microsoft corporate email accounts, source code repositories, and internal systems; and
7. how Microsoft’s ubiquitous and critical products, which underpin essential services that support national security, the foundations of our economy, and public health and safety, require the company to demonstrate the highest standards of security, accountability, and transparency.

The report includes a bunch of recommendations. It’s worth reading in its entirety.

The board was established in early 2022, modeled in spirit after the National Transportation Safety Board. This is their third report.

Here are a few news articles.

EDITED TO ADD (4/15): Adam Shostack has some good commentary.

Tags: China, email, hacking, Microsoft, privacy

Posted on April 9, 2024 at 9:56 AM • 16 Comments