Attackers stole ConnectWise application credentials to access Microsoft 365 tenants, prompting the company to suspend cloud services.

ConnectWise suspended its Cloud Backup service and took both SaaS Security and Cloud Management offline over the weekend after discovering that unknown attackers had obtained unauthorized access to seven of its application identities.

The company discovered the incident on October 14 through internal monitoring, disabled the compromised identities on October 17, and is still investigating how attackers obtained the credentials.

“We have taken protective action following unauthorized access to application identities associated with ConnectWise Cloud Backup, formerly known as SkyKick. Our investigation remains ongoing. Since implementing the mitigations described below, we have not observed successful threat activity in the environments we monitor.” reads the alert published by the company on October 17. “Out of an abundance of caution, we suspended Cloud Backup service by revoking certificates used for affected application connections across all users. This removed ConnectWise’s access through those connections. The shared credentials previously used for Cloud Backup are no longer valid and cannot be used. In addition to mobilizing our internal security teams and Security Operations Center (SOC), we have engaged a reputable third-party incident response firm to support our investigation and containment efforts. Together, these teams are actively monitoring our backup infrastructure and broader environment, with the investigation extending across all partner-facing services. At this time, we have no indication that any other ConnectWise product, service, or offering is impacted.”

This was not a case of attackers stealing individual customers’ passwords. ConnectWise’s applications already had permission to access customer Microsoft 365 environments to manage services and run backups. After stealing the application credentials, the attackers could pretend to be ConnectWise’s own applications and request access tokens from Microsoft Entra ID. They did not need to steal any customer passwords.

Depending on the permissions granted to these applications, the attackers could access mailboxes, SharePoint documents, Teams messages, and directory data. ConnectWise explained that disabling the affected connections prevents new authentication through those connections; however, it does not reverse changes previously made inside a tenant. In other words, disabling the compromised connections stops new access through them, but it does not undo what the attackers may have already done inside customer environments. Any changes made before the connections were disabled may remain.

Here’s what makes this particularly hard to clean up. An attacker who used a stolen application credential to get into a tenant could add their own client secret to a different trusted application already registered in that tenant, or create an entirely new application and grant it permissions. Either path gives them a second key that still works even after ConnectWise’s original compromised credential is revoked.

“The larger risk is what happens when that access is used to gain more. If an application can assign directory roles, as we saw in one tenant, it can make itself a Global Administrator, and an administrator can add credentials to other applications, create new applications and grant them permissions, reset passwords and authentication methods for users, and change Conditional Access policies.” reads the analysis published by cybersecurity firm Huntress. “Each of those steps gives the attacker another way back in that does not depend on the original vendor credential, which is why rotating the vendor credential is necessary, but not enough.”

Huntress identified malicious sign-ins from IP address 144.172.64.128 through October 15 at around 14:20 UTC, and a second targeted wave later that same day aimed specifically at 16 tenants in the policy, national security, trade, and critical minerals sectors. That second wave appeared to be manual rather than automated and hit Exchange Online, SharePoint Online, Teams, Azure Resource Manager, Entra, and Office 365 Management APIs in rapid succession. All 16 attempts in the second wave failed, but the fact that they were manually targeted at sensitive sectors is the detail worth sitting with.

Of about 1,000 Microsoft Entra tenants that recorded sign-in activity from the suspicious IP address, around 300 sign-ins were successful. However, a successful sign-in did not always give the attackers access to a tenant. In some cases, they could not proceed because the required service principal was missing. This was a result of the tenant’s configuration, not a security measure that had been deliberately put in place.

ConnectWise said its Cloud Backup archives remain encrypted, isolated, and preserved, with no evidence that attackers accessed or compromised them.

“Cloud Backup remains suspended. Scheduled backups are not running, and access to affected backup archives and restoration capabilities remains unavailable.” continues the ConnectWise’s alert.”Existing archives remain encrypted, isolated, and preserved. We have no evidence that these archives have been accessed.”

However, while the service remains offline, backups cannot run and customers cannot restore their data. This creates an operational risk for organizations that depend on the service to recover their systems and information.

Huntress’s recommendation for anyone using ConnectWise Cloud Backup or Cloud Management is to review both their own Microsoft 365 tenant and every managed customer tenant, including any with dormant SkyKick connections. Look specifically for sign-in activity from 144.172.64[.]128 starting October 13. Before doing anything else, preserve available sign-in and audit logs, because containment steps can overwrite the evidence you need to understand what actually happened.

The list of what to check is long: application credentials and federation trusts, directory role assignments, consent grants, recent policy changes, mailbox forwarding rules, and delegated mailbox access. Any of these could be the thing an attacker quietly added before the connection was killed. Full ConnectWise advisory and ongoing updates are available here.

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Pierluigi Paganini

(SecurityAffairs – hacking, ConnectWise)

Attackers bypass endpoint security by posing as IT staff, stealing Microsoft 365 sessions, draining SaaS data and demanding extortion.

Forget installing malware because today’s extortionists just pick up the phone instead of writing code. A widespread threat cluster tracked as PREY-0058 bypasses endpoint security entirely by targeting Microsoft 365 and SaaS environments through pure social engineering.

Attackers pose as internal IT help desk staff via phone calls and direct executives toward rogue authentication portals.

“The threat actors impersonate internal IT or helpdesk personnel by phone and direct them to an authentication-themed URL, often formatted as <victim organization>.<lure domain>.” reads the report published by Artic Wolf. “These attacks most frequently target Directors, Vice Presidents, and other executive staff.”

Once victims land on these pages, adversary-in-the-middle panels intercept credentials and multi-factor approvals in real time.

Stolen session tokens are then replayed using residential proxy networks that match the victim’s exact geographic location.

“Stolen sessions are replayed from residential proxy infrastructure, most notably NodeMaven, often from IP addresses that resolve to the same geo-location and network (ASN) as the victim.” states Artic Wolf. “Initial sign-in activity involves applications such as “My Signins”, “My Profile”, “My Apps”, which reveal account details and the applications available to the victim.”

This clever trick blinds standard impossible travel alerts and leaves defenders scratching their heads.

Intruders waste no time once they slip past the front door, immediately shifting focus to massive data harvesting.

“After initial access, the threat actors perform discovery techniques against SharePoint and Entra ID.” continues the report. “SharePoint discovery includes SearchQueryPerformed events with contentclass:STS_Site, contentclass:STS_Web, and wildcard searches using indexdocid for pagination.”

They map out repositories and drain sensitive files from OneDrive, Exchange, and Box before dropping a heavy extortion demand.

To detect these attacks, monitor Microsoft 365 sign-ins coming from residential proxies or hosting networks such as NodeMaven. Suspicious activity is more likely when several common Microsoft account pages are accessed at the start of a session, especially OfficeHome, My Signins, My Profile, My Apps and Microsoft Account Controls.

Alerts should also consider changes from a user’s normal sign-in pattern, such as a different location, ISP, browser, operating system or user agent.

In SharePoint, look for unusual SearchQueryPerformed events that map or enumerate sites and files. In Exchange, watch for large numbers of MailItemsAccessed events in a short time, especially when they come from hosting or proxy IPs. Also monitor heavy SharePoint and OneDrive file access or downloads from one user, particularly when scripting tools such as Python requests or Microsoft Graph are used. Finally, watch for new phishing domains that imitate your organization and target passkey or MFA registration.

To reduce the risk, require managed devices for Microsoft 365 and block or challenge access from proxy and hosting networks. Use phishing-resistant MFA such as FIDO2 keys or device-bound passkeys, which can stop AiTM attacks. Limit users’ access to sensitive SharePoint data, enable Continuous Access Evaluation, and train employees and help-desk teams to verify unexpected IT calls through a trusted channel.

Artic Wolf also released Indicators of Compromise (IoCs) for these attacks.

Follow me on Twitter: @securityaffairs and Facebook and Mastodon

Pierluigi Paganini

(SecurityAffairs – hacking, IT Help Desk)