Nearly two of every 10 U.S. water and wastewater organizations have identity data actively exposed from infostealers harvesting their credentials, according to research published Tuesday.

The study from identity risk firm SpyCloud follows months of reports about a wave of cyberattacks hitting targets in the sector, which U.S. government officials suspect are tied to Iran.

The company built a database of 66,845 Environmental Protection Agency-registered systems, examined internet domains and ultimately analyzed 10,000 organizations, finding that 1,787 showed active infostealer exposure.

In one case, a single infected device at a smart meter technology provider that SpyCloud didn’t name contained saved logins linked to roughly 167 different U.S. utility metering tenants — meaning that one exposure opened the door to many more. 

That “cascading supply chain exposure” was one of the biggest findings of the report that SpyCloud shared exclusively with CyberScoop, said Jason Lancaster, chief investigations officer at the cyber firm, along with the quantitative approach” to measure exposure overall.

“We talk about it a lot,” Lancaster said of the exponential risk that one exposure can present. “There’s examples here and there, but that was a standout example of, here’s a tangible thing that is an exposure right now.”

Generally, “Infostealer exposure means the attacker isn’t guessing anymore, they’ve got legitimate points of entry,” Lancaster said. “In the investigations I’ve worked, that log data usually contains stolen session cookies, credentials, and autofill info pulled straight off the infected device. That’s enough to walk right past [multifactor authentication] by hijacking an already-authenticated session, log into corporate email or VPNs without raising a single alert, and sit there quietly for weeks while they map out the network.”

Still, the study had limitations. It doesn’t address what apparently led to the cyberattacks that unfolded in Minnesota and elsewhere this summer: internet-exposed programmable logic controllers.

It’s “important to note that our research did not focus on OT devices which run the most critical processes within these utilities, and any exposure we cite herein should not be interpreted as exposure of specific OT devices,” the report said. It did, however, find that 258 of the 1,787 organizations with active infostealer exposure carried credentials to operational technology or remote-access systems.

Some of the report’s conclusions were about the limitations of the data itself.

“Exposure concentrated in larger operators and in the vendor supply chain; small utilities were largely underrepresented,” SpyCloud said. “That’s a pattern in the data, not a claim that every water system nationwide carries this risk — and it measures identity exposure, not confirmed intrusion.”

It’s the first study of its kind that SpyCloud has done for a specific industry, so the company doesn’t have comparisons to other industries, Lancaster said. SpyCloud has begun a responsible disclosure process for those affected within its report, he said, beginning with a briefing for the Cybersecurity and Infrastructure Security Agency.

“It’s important to remember, infostealer logs aren’t the end of an incident — they are often the beginning,” Lancaster said. “Access brokers sell these logs specifically because ransomware crews and other fraudsters want exactly this kind of entry point. So, the real question isn’t whether the exposure is dangerous. It’s how much time you have before someone weaponizes that stolen data against you.”

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President Donald Trump blamed Minnesota Friday for the cyberattacks its water systems have suffered in recent days, saying the state was “behind it.”

Trump said the state being “incompetent” was the issue, but it wasn’t clear whom he thought actually conducted cyberattacks that U.S. investigators have attributed to Iran — if, perhaps, somehow Minnesota incompetently cyberattacked itself. The White House referred a request for clarification back to Trump’s remarks.

“I think that Minnesota is behind it,” Trump told reporters Friday. “Because they’re grossly incompetent. I don’t think there was an Iranian cyberattack. I think Minnesota ought to get its act together.”

The White House also didn’t clarify whom the president believed was behind similar attacks in other states, when asked for comment. Trump has repeatedly used federal power aggressively in Minnesota, a state led by Gov. Tim Walz, a Democrat who was on the ticket that ran against him in 2024 as the vice presidential nominee. Trump also has downplayed Iranian attacks amid the war he launched against the nation with Israel in February.

A number of cyber experts quickly pushed back on Trump’s comments after he made them.

“Victim blaming in cyber is so 2000 and late,” cybersecurity pioneer Chris Wysopal, Veracode co-founder and chief security evangelist, said on the Bluesky social media platform. Said Jake Williams, a member of the IANS faculty: “His own intelligence services are attributing this to Iran.”

Andy Jabbour — founder and CEO of Gate 15, a cybersecurity firm which provides support to the water sector — told CyberScoop that, “speaking candidly, I’m not even sure what he was actually saying or suggesting Minnesota’s government did or didn’t do.”

“Attribution is tricky business,” he continued, referencing recent alerts from the Cybersecurity and Infrastructure Security Agency and others. “But logically, given an ongoing war with Iran, recent statements made by Iran-aligned threat groups, with assessments that the recent activity is aligned with recent CISA warnings, given yesterday’s statements from CISA and the FBI, random unsubstantiated allegations aimed at political opponents seem reckless and are a disservice to the American people.”

Walz struck back at Trump in a Facebook post, noting steps from his Department of Government Efficiency to slash federal funding. CISA has shrunken considerably under Trump, and his administration has pushed states to defend against cyberattacks that feds once countered.

“Trump knows exactly who is responsible for this attack, and knows that other states were hit too,” Walz said. “This is what modern warfare looks like, and it further illustrates there’s no plan to win a war with Iran.”

“DOGE took an axe to CISA and left the U.S. exposed to cyber attacks,” he continued. “Thankfully, our experts in Minnesota were able to identify the vulnerability quickly and work with local communities to stop it.”

A spokesperson for Minnesota IT Services, a state agency that has been responding to the water cyberattacks, declined to address Trump’s remarks.

“We remain focused on supporting affected communities, securing critical infrastructure and coordinating with local partners and federal officials as the investigation continues,” the spokesperson, Emily Zimmer, told CyberScoop. “We will not comment on political statements or speculate about attribution.”

Other cyber professionals declined to comment directly on Trump’s remarks, but offered thoughts on who was behind the attacks and their motives.

Bryson Bort, CEO and founder of Scythe said the evidence supports the attribution with Iran, and that it looks like hackers there found something they could exploit on the internet and seized the chance.

“This was a target of opportunity,” said Bort, co-founder of the ICS Village, a non-profit advancing awareness of industrial control system security; such systems are common in the water sector. “It wasn’t that Minnesota did something as a state to raise Iran’s ire.”

Cynthia Kaiser, a former top FBI cyber official, said that when the bureau conducts attributions, it looks at technical indicators but also who has the capability, who has conducted similar attacks in the past and what the purpose of the attacks is.

“Iran ticks all these kinds of things,” Kaiser, now senior vice president at cybersecurity firm Halcyon, told CyberScoop. “My view is, if it walks like a duck, if it talks like a duck, I strongly suspect it’s a duck. I’d be shocked if we found out it wasn’t Iran.”

Just last week, CISA updated an advisory about how Iranian hackers were targeting programmable logic controllers in the water sector and other sectors, a warning that the water industry’s information sharing and analysis center said it believed.

“WaterISAC is confident in our government partners’ assessment that the confirmed activity is aligned with the joint Cybersecurity Advisory (CSA) AA26-097A ‘Iranian-Affiliated Cyber Actors Exploit Programmable Logic Controllers Across U.S. Critical Infrastructure’ published and recently updated by CISA,” Tom Dobbins, executive director, WaterISAC, told CyberScoop. “We have evidence of earlier attacks from Iran even before this current conflict. Cyber attacks are the most viable way that Iran can directly attack our homeland, and it is logical that they would do so, especially given the challenges of absolute attribution.”

The water sector is often viewed as one of the most vulnerable critical infrastructure sectors, and Dobbins called on Congress to provide funding to provide funding for the ISAC.

Sen. Tina Smith, D-Minn., also took issue with Trump’s comments.

“The President provided an unserious response that is beneath the dignity of the office he holds. Iran’s purported cyberattack on Minnesota’s water infrastructure must be taken as a serious threat to our national security.  Smith said in a statement, adding that she’s been in touch with CISA and the FBI and was grateful to Minnesota’s IT experts. “The entire situation serves as a stark reminder of the danger this war puts us in the longer it drags on.”

Fellow Minnesota Democratic Sen. Amy Klobuchar had earlier been in touch with Sean Cairncross, the national cyber director and a Minnesota native, about the incident.

Trump has previously displayed a laissez-faire view toward other cyberattacks on the United States, such as when he’s been asked about Chinese and Russian cyberattacks and Trump shrugs them off as something America does, too.

He also has cast doubt before on his government officials’ assessments of who’s responsible for cyberattacks on the United States, such as when he asserted China rather than Russia was behind the landmark SolarWinds breach.

Updated 8/3/2026: with comments from Minnesota’s senators.

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