Cyber Safety Review Board Releases Report on Microsoft Online Exchange Incident from Summer 2023
The U.S. Department of Homeland Security released the Cyber Safety Review Board’s (CSRB) findings and recommendations following its independent review of the Summer 2023 Microsoft Exchange Online intrusion.
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U.S. Department of Homeland Security
WASHINGTON – Today, the U.S. Department of Homeland Security (DHS) released the Cyber Safety Review Board’s (CSRB) findings and recommendations following its independent review of the Summer 2023 Microsoft Exchange Online intrusion. The review detailed operational and strategic decisions that led to the intrusion and recommended specific practices for industry and government to implement to ensure an intrusion of this magnitude does not happen again. Secretary of Homeland Security Alejandro N. Mayorkas received the CSRB report from the Board and delivered it to President Biden. This is the third review completed by the CSRB since the Board was announced in February 2022.

“Individuals and organizations across the country rely on cloud services every day, and the security of this technology has never been more important,” said Secretary Mayorkas. “Nation-state actors continue to grow more sophisticated in their ability to compromise cloud service systems. Public-private partnerships like the CSRB are critical in our efforts to mitigate the serious cyber threat these nation-state actors pose. The Department of Homeland Security appreciates the Board’s comprehensive review and report of the Storm-0558 incident. Implementation of the Board’s recommendations will enhance our cybersecurity for years to come.”

The CSRB provides a unique forum for leading government and industry experts to review significant cybersecurity events and provide independent, strategic, and actionable recommendations to the President, the Secretary, and the Director of the Cybersecurity and Infrastructure Security Agency (CISA) to better protect our nation. The Board is made up of cybersecurity leaders from the private sector and senior officials from DHS, CISA, the Defense Department, the National Security Agency, the Department of Justice, the Federal Bureau of Investigation, the Office of the National Cyber Director, and the Federal Chief Information Officer.

In August 2023, DHS announced that the CSRB would assess the recent Microsoft Exchange Online intrusion, initially reported in July 2023, and conduct a broader review of issues relating to cloud-based identity and authentication infrastructure affecting applicable cloud service providers (CSP) and their customers. The CSRB obtained data from and conducted interviews with 20 organizations and experts including cybersecurity companies, technology companies, law enforcement organizations, security researchers, academics, as well as several impacted organizations.

The inclusive review process developed actionable findings and recommendations. As a result of the CSRB’s recommendations, CISA plans to convene major CSPs to develop cloud security practices aligned with the CSRB recommendations and a process for CSPs to regularly attest and demonstrate alignment.

“DHS is committed to efforts that meaningfully improve cybersecurity resilience and preparedness for our nation, and the work of the CSRB is reflective of our determination and dedication to this cause,” said CISA Director Jen Easterly. “I am confident that the findings and recommendations from the Board’s report will catalyze action to reduce risk to the critical infrastructure Americans rely on every day.”

The CSRB’s review found that the intrusion by Storm-0558, a hacking group assessed to be affiliated with the People’s Republic of China, was preventable. It identified a series of Microsoft operational and strategic decisions that collectively pointed to a corporate culture that deprioritized enterprise security investments and rigorous risk management, at odds with 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 recommends that Microsoft develop and publicly share a plan with specific timelines to make fundamental, security-focused reforms across the company and its suite of products. Microsoft fully cooperated with the Board’s review.

“Cloud computing is some of the most critical infrastructure we have, as it hosts sensitive data and powers business operations across our economy,” said DHS Under Secretary of Policy and CSRB Chair Robert Silvers. “It is imperative that cloud service providers prioritize security and build it in by design. The Board has become the authoritative organization for conducting fact-finding and issuing recommendations in the wake of major cyber incidents, receiving extensive industry and expert input in each of its three reviews to date. We appreciate Microsoft’s full cooperation in the course of the Board’s seven-month, independent review. We also appreciate the input received from 19 additional companies, government agencies, and individual experts.”

“The threat actor responsible for this brazen intrusion has been tracked by industry for over two decades and has been linked to 2009 Operation Aurora and 2011 RSA SecureID compromises,” said CSRB Acting Deputy Chair Dmitri Alperovitch. “This People’s Republic of China affiliated group of hackers has the capability and intent to compromise identity systems to access sensitive data, including emails of individuals of interest to the Chinese government. Cloud service providers must urgently implement these recommendations to protect their customers against this and other persistent and pernicious threats from nation-state actors.”

The CSRB recommends specific actions to all cloud service providers and government partners to improve security and build resilience against the types of attacks conducted by Storm-0558 and associated groups. Select recommendations include:

Cloud Service Provider Cybersecurity Practices: Cloud service providers should implement modern control mechanisms and baseline practices, informed by a rigorous threat model, across their digital identity and credential systems to substantially reduce the risk of system-level compromise.

Audit Logging Norms: Cloud service providers should adopt a minimum standard for default audit logging in cloud services to enable the detection, prevention, and investigation of intrusions as a baseline and routine service offering without additional charge.

Digital Identity Standards and Guidance: Cloud service providers should implement emerging digital identity standards to secure cloud services against prevailing threat vectors. Relevant standards bodies should refine, update, and incorporate these standards to address digital identity risks commonly exploited in the modern threat landscape.

Cloud Service Provider Transparency: Cloud service providers should adopt incident and vulnerability disclosure practices to maximize transparency across and between their customers, stakeholders, and the United States government.

Victim Notification Processes: Cloud service providers should develop more effective victim notification and support mechanisms to drive information-sharing efforts and amplify pertinent information for investigating, remediating, and recovering from cybersecurity incidents.

Security Standards and Compliance Frameworks: The United States government should update the Federal Risk Authorization Management Program and supporting frameworks and establish a process for conducting discretionary special reviews of the program’s authorized Cloud Service Offerings following especially high-impact situations. The National Institute of Standards and Technology should also incorporate feedback about observed threats and incidents related to cloud provider security.

As directed by President Biden through Executive Order 14028 Improving the Nation’s Cybersecurity, Secretary Mayorkas established the CSRB in February 2022. The Board’s investigations are conducted independently, and its conclusions are independently reached. DHS and the CSRB are committed to transparency and will, whenever possible, release public versions of CSRB reports, consistent with applicable law and the need to protect sensitive information from disclosure.

To read the full report, visit the Report on the Microsoft Online Exchange Incident from Summer 2023.

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