Microsoft Details Biggest Threats to U.S. Cybersecurity; China, Russia Attacks Outlined

Most state-sponsored hacking, about 58 percent, pinpointed by Microsoft over the past year was carried out by Russia, which targeted government agencies and think tanks in the United States as well as Ukraine, Britain and European NATO members, according to a report from the technology company.

China accounted for fewer than 1 in 10 of the state-backed hacking attempts outlined in the report, but its success rate was 44 percent when it did attempt to break into networks, Microsoft said in its second annual Digital Defense Report.

Russia has become notorious for its high-volume, state-backed hacking, and Microsoft's report provides rare insight on how it stacks up against the U.S.'s other adversaries. Overall, hacking of other governments has a 10-20 percent success rate, according to Cristin Goodwin, head of Microsoft's Digital Security Unit.

"It's something that's really important for us to try to stay ahead of—and keep driving that compromised number down—because the lower it gets, the better we're doing," Goodwin said.

For more reporting from the Associated Press, see below:

Microsoft Defense Report
Microsoft said Russia once again accounted for most state-sponsored hacking, with a 58 percent share of intrusion attempts it detected in the past year, according a report by the tech company. In this November 10, 2016, file photo, people walk past a Microsoft office in New York. Swayne B. Hall/AP Photo

The devastating effectiveness of the long-undetected SolarWinds hack—it mainly breached information technology businesses including Microsoft—also boosted Russian state-backed hackers' success rate to 32 percent in the year ending June 30, compared with 21 percent in the preceding 12 months.

The report also cited ransomware attacks as a serious and growing plague, with the United States by far the most targeted country, hit by more than triple the attacks of the next most targeted nation. Ransomware attacks are criminal and financially motivated.

By contrast, state-backed hacking is chiefly about intelligence gathering—whether for national security or commercial or strategic advantage—and thus generally tolerated by governments, with U.S. cyber operators among the most skilled. The report by Microsoft Corporation, which works closely with Washington government agencies, does not address U.S. government hacking.

The SolarWinds hack was such an embarrassment to the U.S. government, however, that some Washington lawmakers demanded some sort of retaliation. President Joe Biden has had a difficult time drawing a red line for what cyberactivity is permissible. He has issued vague warnings to President Vladimir Putin to get him to crack down on ransomware criminals, but several top administration cybersecurity officials said this week that they have seen no evidence of that.

Goodwin finds China's "geopolitical goals" in its recent cyberespionage especially notable, including targeting foreign ministries in Central and South American countries where it is making Belt-and-Road-Initiative infrastructure investments and universities in Taiwan and Hong Kong where resistance to Beijing's regional ambitions is strong. The findings further belie as obsolete any conventional wisdom that Chinese cyber spies' interests are limited to pilfering intellectual property.

Russian hack attempts were up from 52 percent in the 2019-20 period as a share of global cyber-intrusion bids detected by the "nation-state notification service" that Microsoft employs to alert its customers. For the year ending June 30, North Korea was second as country of origin at 23 percent, up from less than 11 percent previously. China dipped to 8 percent from 12 percent.

But attempt volume and efficacy are different matters. North Korea's failure rate on spear-phishing—targeting individuals, usually with booby-trapped emails—was 94 percent in the past year, Microsoft found.

Only 4 percent of all state-backed hacking that Microsoft detected targeted critical infrastructure, the Redmond, Washington-based company said, with Russian agents far less interested in it than Chinese or Iranian cyber-operatives.

After the SolarWinds hack was discovered in December, the Russians transitioned back to focus mostly on government agencies involved in foreign policy, defense and national security, followed by think tanks then health care, where they targeted organizations developing and testing COVID-19 vaccines and treatments in the United States, Australia, Canada, Israel, India and Japan.

In the report, Microsoft said Russian state hackers' recent greater efficacy "could portend more high-impact compromises in the year ahead." Accounting for more 92 percent of the detected Russian activity was the elite hacking team in Russia's SVR foreign intelligence agency best known as Cozy Bear.

Cozy Bear, which Microsoft calls Nobelium, was behind the SolarWinds hack, which went undetected for most of 2020 and whose discovery badly embarrassed Washington. Among badly compromised U.S. government agencies was the Department of Justice, from which the Russian cyber spies exfiltrated 80 percent of the email accounts used by the U.S. attorneys' offices in New York.

Microsoft's nation-state notifications, of which about 7,500 were issued globally in the period covered by the report, are by no means exhaustive. They only reflect what Microsoft detects.