Incident: Chinese Government Exploits Microsoft Exchange Vulnerabilities Causing Global Breach

Published Date: 2021-07-29

Postmortem Analysis
Timeline 1. The software failure incident involving the hack of Microsoft Exchange email server software by China occurred prior to the article's publication on July 29, 2021 [116804]. Therefore, the software failure incident happened before July 29, 2021.
System The software failure incident mentioned in the article involved the hack of Microsoft Exchange email server software. Specifically, the vulnerability exploited was in the Microsoft Exchange software, which allowed the Chinese government to affect thousands of computers and networks worldwide, including in Australia [116804]. Therefore, the systems that failed in this software failure incident were: 1. Microsoft Exchange email server software [116804].
Responsible Organization 1. Chinese government [116804]
Impacted Organization 1. Thousands of computers and networks worldwide, including in Australia [116804] 2. About 70,000 businesses and organizations in Australia using a Microsoft Exchange server [116804]
Software Causes 1. Exploitation of vulnerabilities in the Microsoft Exchange email server software by China's ministry of state security [116804]
Non-software Causes 1. Lack of restraint in cyberspace by states, leading to reckless or malicious actions [116804] 2. Poor record of Australia as an accomplice for the US's eavesdropping activities, as claimed by the Chinese embassy [116804]
Impacts 1. The software failure incident involving the hack of Microsoft Exchange email server software by China's ministry of state security affected thousands of computers and networks worldwide, including in Australia [116804]. 2. Approximately 70,000 businesses and organizations in Australia using a Microsoft Exchange server were impacted by the attack, highlighting the significant scale of the incident [116804]. 3. The incident created vulnerabilities in the affected systems, likened to having faulty locks on doors, allowing various actors, including criminals and state actors, to exploit the open doors and gain unauthorized access [116804]. 4. The software failure incident prompted the Australian government to seek support for proposed legislation to enhance cyber defenses for critical infrastructure operators, indicating a need for stronger security measures in response to the attack [116804].
Preventions 1. Implementing timely software updates and patches to address vulnerabilities in the Microsoft Exchange server software could have prevented the incident [116804]. 2. Enhancing cybersecurity measures and practices within organizations, especially critical infrastructure operators, to strengthen their defenses against cyber threats could have mitigated the risk of such attacks [116804]. 3. Increasing awareness and training for employees on cybersecurity best practices to prevent falling victim to phishing attempts or other social engineering tactics that could lead to breaches [116804].
Fixes 1. Patching the vulnerabilities in the Microsoft Exchange email server software exploited by the Chinese government [116804]. 2. Implementing stronger cyber defenses for critical infrastructure operators, as proposed by the Australian government [116804]. 3. Enforcing new cyber security obligations on critical sectors, including mandatory reporting of serious cyber security incidents to the Australian Signals Directorate [116804]. 4. Providing government agencies with new powers to respond to major cyber attacks, such as obtaining information from affected businesses or entities [116804].
References 1. Australian Signals Directorate (ASD) [116804] 2. Chinese embassy in Canberra [116804]

Software Taxonomy of Faults

Category Option Rationale
Recurring multiple_organization (a) The software failure incident related to the hack of Microsoft Exchange email server software has affected multiple organizations. The incident involved exploiting vulnerabilities in the Microsoft Exchange software to affect thousands of computers and networks worldwide, including in Australia [116804]. This indicates that the same software failure incident has occurred across various organizations that were using Microsoft Exchange servers.
Phase (Design/Operation) design, operation (a) The software failure incident related to the design phase can be seen in the article where it is mentioned that China's ministry of state security exploited vulnerabilities in the Microsoft Exchange software to affect thousands of computers and networks worldwide, including in Australia. This exploitation of vulnerabilities in the software design allowed for unauthorized access and compromise of systems [116804]. (b) The software failure incident related to the operation phase is evident in the same article where it is described that the Chinese government propped open the doors of thousands of homes by exploiting vulnerabilities in the Microsoft Exchange software. This action allowed for criminals and other state actors to pour in behind the propped-open doors and gain unauthorized access to systems, highlighting a failure in the operation or use of the software [116804].
Boundary (Internal/External) within_system, outside_system (a) within_system: - The software failure incident related to the hack of Microsoft Exchange email server software was due to vulnerabilities within the system itself, allowing the Chinese government to exploit these vulnerabilities [116804]. - The failure was likened to having faulty locks on doors within the system, which were then propped open by the Chinese government, enabling unauthorized access [116804]. - The incident involved exploiting vulnerabilities in the Microsoft Exchange software, indicating that the failure originated from within the system [116804]. (b) outside_system: - The actions of the Chinese government in exploiting the vulnerabilities in the Microsoft Exchange software were considered as originating from outside the system, as they were external actors taking advantage of the system's weaknesses [116804]. - The Chinese government's actions were described as akin to leaving doors open for criminals to get inside, implying that the external actions breached the system's security from the outside [116804].
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident in this case was attributed to non-human actions, specifically actions taken by the Chinese government in exploiting vulnerabilities in the Microsoft Exchange software. The incident was likened to propping open doors by exploiting these vulnerabilities, allowing unauthorized access to thousands of computers and networks worldwide [116804]. (b) The response to the software failure incident highlighted the importance of human actions in cybersecurity. Officials emphasized the need for states to show restraint in cyberspace and avoid reckless or malicious actions. Additionally, the Australian government proposed legislation to impose new cybersecurity obligations on critical sectors and to work cooperatively with businesses and organizations to strengthen their defenses against cyber threats [116804].
Dimension (Hardware/Software) software (a) The software failure incident reported in the articles was not attributed to hardware issues. Instead, it was a result of vulnerabilities in the Microsoft Exchange email server software that were exploited by state actors, specifically the Chinese government. The incident involved the exploitation of these software vulnerabilities to gain unauthorized access to thousands of computers and networks worldwide, including in Australia [116804]. (b) The software failure incident was directly linked to software vulnerabilities in the Microsoft Exchange email server software. The Chinese government exploited these vulnerabilities to affect thousands of computers and networks globally, leading to a significant cyber attack at a large scale. The incident highlighted the importance of addressing software flaws and strengthening cyber defenses to prevent such malicious actions in cyberspace [116804].
Objective (Malicious/Non-malicious) malicious (a) The software failure incident related to the hack of Microsoft Exchange email server software was malicious in nature. The incident involved the Chinese government exploiting vulnerabilities in the software to affect thousands of computers and networks worldwide, including in Australia. This action was likened to propping open doors of homes and leaving them ajar for criminals to get inside, indicating a deliberate and harmful intent [116804]. Additionally, the Australian government and other countries publicly pointed the finger at Beijing for these actions, emphasizing that such reckless and malicious actions in cyberspace should not be tolerated [116804]. (b) There is no information in the articles suggesting that the software failure incident related to the hack of Microsoft Exchange email server software was non-malicious.
Intent (Poor/Accidental Decisions) poor_decisions (a) The intent of the software failure incident was related to poor decisions made by the Chinese government. The incident involved exploiting vulnerabilities in the Microsoft Exchange software to affect thousands of computers and networks worldwide, including in Australia. The Australian Signals Directorate (ASD) director general described the Chinese government's actions as propping open doors by taking advantage of faulty locks on the doors, allowing criminals and other state actors to pour in behind those propped-open doors [116804]. The Australian government, along with the United States and other countries, publicly pointed the finger at Beijing for these actions, emphasizing that such reckless actions should not be tolerated in cyberspace [116804].
Capability (Incompetence/Accidental) unknown (a) The software failure incident related to the hack of Microsoft Exchange email server software was attributed to the actions of the Chinese government exploiting vulnerabilities in the software. The Australian Signals Directorate (ASD) director general, Rachel Noble, likened the Chinese government's actions to propping open doors with faulty locks on thousands of homes, allowing criminals and other state actors to exploit the vulnerabilities [116804]. (b) The incident was not described as accidental but rather as a deliberate and malicious action by the Chinese government to exploit vulnerabilities in the Microsoft Exchange software, allowing unauthorized access to thousands of computers and networks worldwide [116804].
Duration temporary The software failure incident related to the hack of Microsoft Exchange email server software was temporary in nature. This incident was caused by the exploitation of vulnerabilities in the Microsoft Exchange software by China's ministry of state security, which affected thousands of computers and networks worldwide, including in Australia [116804]. The incident was described as akin to propping open doors with faulty locks, allowing criminals and state actors to exploit the vulnerabilities and gain unauthorized access to systems. The incident prompted the Australian government to seek support for proposed legislation to enhance cyber defenses and impose new cybersecurity obligations on critical sectors [116804].
Behaviour crash, omission, other (a) crash: The software failure incident in the article is related to a hack of Microsoft Exchange email server software, where the Chinese government exploited vulnerabilities in the software, affecting thousands of computers and networks worldwide, including in Australia. This incident led to a situation where the system lost its security state, allowing unauthorized access to numerous systems [116804]. (b) omission: The software failure incident can also be related to omission, as the Chinese government exploited vulnerabilities in the Microsoft Exchange software, which led to the system omitting its intended function of providing secure email services by leaving doors open for unauthorized access [116804]. (c) timing: The software failure incident is not directly related to timing issues where the system performs its intended functions but at the wrong time. Instead, the focus is on the system's vulnerability and exploitation leading to unauthorized access [116804]. (d) value: The software failure incident is not directly related to the system performing its intended functions incorrectly in terms of the data or output produced. The main issue was the exploitation of vulnerabilities in the software, leading to unauthorized access [116804]. (e) byzantine: The software failure incident does not exhibit characteristics of a byzantine failure where the system behaves erroneously with inconsistent responses and interactions. The incident primarily involved exploiting vulnerabilities to gain unauthorized access [116804]. (f) other: The other behavior exhibited in this software failure incident is the intentional propping open of doors in the software, allowing unauthorized access to systems, which can be categorized as a security breach or a form of system manipulation [116804].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence property, theoretical_consequence (d) property: People's material goods, money, or data was impacted due to the software failure The software failure incident involving the hack of Microsoft Exchange email server software by China's ministry of state security affected thousands of computers and networks worldwide, including in Australia [116804]. This incident resulted in the exploitation of vulnerabilities in the Microsoft Exchange software, allowing access to businesses and organizations' data. The director general of the Australian Signals Directorate mentioned that it was estimated that about 70,000 businesses and organizations in Australia were using a Microsoft Exchange server, indicating a significant impact on data and potentially sensitive information [116804].
Domain information, government (a) The failed system was related to the information industry, specifically affecting businesses and organizations using a Microsoft Exchange server for email communication. The incident involved a hack of the Microsoft Exchange email server software, impacting thousands of computers and networks worldwide, including in Australia [116804]. (b) N/A (c) N/A (d) N/A (e) N/A (f) N/A (g) N/A (h) N/A (i) N/A (j) N/A (k) N/A (l) The incident also had implications for the government sector, as the Australian government was prompted to publicly point the finger at Beijing for the cyber attack on the Microsoft Exchange software. The Australian government was seeking support for proposed legislation to place extra requirements on critical infrastructure operators to enhance their cyber defenses [116804]. (m) N/A

Sources

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