Microsoft, along with a group of industry partners, disrupted EvilTokens, a short-lived but highly consequential cybercrime platform that investigators linked to more than 12,000 compromised Microsoft customer email inboxes across more than 10,000 organizations globally, the company said Tuesday.

Acting on federal court order Sept. 15, Microsoft and partners seized 50 websites the phishing-as-a-service used for operations and disabled more than 175 domains linked to EvilTokens’ supporting infrastructure. 

EvilTokens, launched in February 2026, was “a powerful cybercrime platform that used AI at every step of the attack chain — from compromising email accounts to designing intricate roadmaps for financial fraud and scams,” Steven Masada, associate general counsel and general manager of Microsoft’s Digital Crimes Unit, wrote in a blog post.

About 1,000 cybercriminals used EvilTokens over the course of its operation, a Microsoft spokesperson told CyberScoop.

The service was centered on an AI-style chatbot that cybercriminals used to analyze victims’ inboxes, identify trusted relationships, payment authorizations and other sensitive details that could facilitate fraud.

“AI was not simply helping attackers write more convincing messages. It helped them decide who to target, who to impersonate, and how to most effectively exploit the relationship to extract as much money as possible,” Masada wrote. 

EvilTokens was one of the most widely used phishing-as-a-service platforms prior to its takedown. It facilitated business-email compromise campaigns by stealing session tokens that allowed cybercriminals to sift through a victim’s inbox and maintain persistent access.

“We cannot estimate the total fraud attributable to all EvilTokens activity. However, we were able to correlate at least 13 complaints filed with the FBI’s Internet Crime Complaint Center to EvilTokens-linked activity, representing approximately $1.7 million in reported losses,” a Microsoft spokesperson said. “Because many incidents go unreported and not all victims can be definitively linked to specific campaigns, we believe this is a conservative estimate.”

Victims of EvilTokens were largely concentrated in the United States, Canada, the United Kingdom, Australia, India and France, according to Microsoft. SpyCloud, which supported the takedown, identified compromised email domains spanning 79 countries.

Microsoft said it also identified two men behind EvilTokens — Felix Utomi and Waidi Segun Adams — and attributes the development and support of the platform to Storm-2992, a threat actor unaffiliated with any other known cybercrime groups.

The United Kingdom’s Metropolitan Police acted on that information Sept. 18 when it served warrants in the greater London area, arrested the men accused of making articles for use in fraud and money laundering and seized their digital devices.

The Metropolitan Police said it received information from Microsoft about EvilTokens’ administrators in August. Utomi and Adams were released on bail as the investigation continues. 

“The two primary operators identified in our investigation were residing in the U.K.,” a spokesperson for Microsoft told CyberScoop. “While our investigation focused on those individuals, we believe others may have supported the operation in various capacities.”

Microsoft’s legal filing in the U.S. District Court for the Eastern District of Virginia refers to five additional unidentified people allegedly acting as support personnel and users.

Microsoft and others involved in the EvilTokens takedown, including Health-ISAC, Cloudflare, OpenAI, Shadowserver and TRM Labs, didn’t fully quantify how much fraud the service enabled, but it gained popularity quickly among cybercriminals and was lucrative for its operators.

Coinbase, which also aided the investigation into EvilTokens, said it traced about $1.1 million in revenue for EvilTokens from its paying customers. The virtual currency company’s threat researchers found more than 1,000 deposits to EvilTokens from more than 700 distinct addresses through June 2026. 

Operators sold access to the service through Telegram for a $1,500 initiation fee and a recurring $500 subscription. EvilTokens significantly lowered the barrier to entry for cybercriminals by including specialized tools for identity attacks, cloud systems, social engineering and financial fraud in a single interface.

The service allowed cybercriminals to map organizational structure and permissions in Microsoft Graph, which enabled lateral movement, researchers said. With active tokens gained through a collection of highly-targeted phishing lures, cybercriminals consistently bypassed multi-factor authentication, email gateways and endpoint security tools.

Microsoft said the platform’s creators developed portions of the platform with AI and it uncovered capabilities from multiple AI models. 

“It packaged much of the criminal process into a commercially run service, complete with subscription pricing, customer support, management dashboards and tools designed to move customers from account access toward financial exploitation,” Masada added.

The companies and organizations involved in the globally-coordinated takedown identified and notified potential victims, shared indicators of compromise and shared intelligence with law enforcement about EvilToken’s operators and some of its customers.

Experts advised organizations and employees to treat unsolicited device codes as a red flag, assume compromised accounts are fully cataloged in minutes, and independently verify requests to change payment information or redirect funds.

“The infrastructure supporting EvilTokens has been disrupted, but the model it demonstrated will not disappear with it,” Masada warned.

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Botnets powered by residential proxy networks are proliferating, enabling cybercriminals of all types to evade detection by blending in with seemingly legitimate traffic, Lumen Technology’s Black Lotus Labs said in a report Friday.

The global scale of botnets observed by Lumen is currently approaching 60 million victim IP addresses, Chris Formosa, senior lead information security engineer at Black Lotus Labs, told CyberScoop. Roughly 1 in 4 of those compromised IPs are based in the United States, and the true number of infected devices is much greater because there are networks beyond Lumen’s visibility and multiple devices are often unknowingly running a malicious proxy network on the same IP. 

Super-sized botnets are also gaining momentum, according to Lumen, with an average of 10 distinct botnets controlling their own populations of about 1 million active victims daily.

“The only reason these botnets keep getting more and more victims is because there is clearly a market. Aside from criminal activity, who wants access to millions of IPs regularly?” Formosa said. 

That demand for botnets fuels opportunities for growth, reselling, collaboration, and quick rebounds following massive disruptions.

IPIDEA, one of the largest residential proxy networks in operation when its infrastructure was disrupted by coordinated strikes in January, recovered at nearly half-strength within hours and earlier this surpassed its pre-disruption botnet size with a current botnet population of about 10 million IPs, researchers said.

“Their rebuild was eye-opening as they began to rebound from that interdiction,” Ryan English, information security engineer at Black Lotus Labs, told CyberScoop. “Even for how quickly some botnets can rebound, theirs was surprising. We’ve seen them all rebuild, but we haven’t seen anybody do it that fast.”

Meanwhile, botnets are continuously growing, as cybercriminals seek out the cover they provide, more cheap and poorly defended devices hit the market and vendors stop providing security updates for older but still usable products. 

“Your available pool for those proxy hunters grows every year, and it will continue to grow every year,” English said, adding that more than 1 billion devices are currently vulnerable and available to be unknowingly sucked up into botnets.

The challenge for defenders is lopsided, and while disruptions and seizures occur relatively often, botnet operators have formed a global supply chain with pathways that are difficult to break. 

“We have observed multiple residential proxy services collaborating to form what amounts to the largest cooperative network ever seen on the internet,” researchers wrote in the report.

Black Lotus Labs currently tracks more than 30 distinct malicious proxy botnet clusters, and most of those regularly boast more than 100,000 daily victims.

“Our understanding of the various botnets in this space, along with experience in multiple disruptions, leads us to a very important conclusion: taking down a single malicious proxy provider or their botnet in isolation is likely to result in a short-lived solution,” researchers wrote. 

“In recent years, the malicious proxy environment has essentially created the largest collective botnet currently active on the internet, capable of moving millions of IPs within hours to wherever they are needed,” they added. “Until the malicious proxy landscape is properly addressed and regulated on both the private industry and law enforcement sides, this issue will grow and, along with the DDoS botnet landscape, will most likely become a greater problem in the long term.”

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The Treasury Department is slapping sanctions on First VPN and its administrator for allegedly selling services to ransomware operators, as well as another person aiding ransomware gangs.

First VPN Services, or 1VPNS, was “deeply embedded in the cybercriminal ecosystem” and appeared in virtually every Europol investigation in recent years, the law enforcement body said after a sting targeting the service in May.

Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 1VPNS as well as its alleged administrator, Ukrainian citizen Dmytro Rashevskyi, Monday in conjunction with the United Kingdom. The outfit provided anonymity services that could be legitimate in some instances, but 1VPNS advertised itself in online cybercrime forums for more than a decade, touting its refusal to cooperate with law enforcement, the office said.

“Numerous ransomware groups have purchased infrastructure from 1VPNS, which they have leveraged in attacks on U.S. companies and institutions — including to hide the origins of their attacks, deploy malware, and manage exfiltrated data,” OFAC said. “Victims of ransomware attacks that involved the use of 1VPNS infrastructure have included U.S. businesses, financial services companies, hospitals, and municipal governments.”

Treasury also sanctioned Belarus national Yegeniy Vladimirovich Silayev for allegedly selling “cryptors,” tools used to disguise ransomware and other malware, to ransomware operators.

“Unlike legitimate encryption tools, which are designed to protect data and the privacy of the people that own it, cryptors are built specifically to make malware stealthier and more effective by disguising it as harmless files,” OFAC said.

Treasury’s sanctions designations dovetail with separate, unrelated cyber sanctions that European governments from Monday. The FBI has previously issued an alert about First VPN Service. 

Blockchain intelligence firm TRM Labs said it has seen 1VPNS selling its services to ransomware operators for prices ranging from $723 for Anubis to $58 Sinobi.

“The amounts are small because infrastructure subscriptions are small,” Ari Redbord, global head of policy and government affairs for the company, wrote on LinkedIn. “A named ransomware group paying a named enabler on public chains still leaves a trail investigators can follow after the fact.”

Victims tied to First VPN Service infrastructure include U.S. municipalities, hospitals and financial services companies.

Europol said it had arrested the administrator of 1VPNS in its May sting, but did not name them. 

The Treasury Department did not immediately respond to a question about whether its sanctions targeted that same arrested person.

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