The large-scale watering hole campaign has been targeting entities in the US and Europe, mainly in Ukraine.

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Authorities seized the domain of Virtualine, a bulletproof hosting provider that cybercriminals used to commit a large-scale sextortion scheme, ransomware, data theft, malware hosting and money laundering, the Justice Department said Tuesday. 

Virtualine facilitated prolific criminal activity, including the distribution of child sexual abuse material (CSAM), the Justice Department said. The Russian-speaking bulletproof hosting provider was among the most active this year in crypto-related crime in particular, researchers said. 

The site and its associated infrastructure stands out among the dozens of bulletproof hosting providers currently tracked by TRM Labs. “It was not among the largest by total inflows, but it received the most illicit-attributed value in 2026 to date,” the blockchain and cryptocrime research firm wrote in a blog post.

Virtualine received almost one-fifth of all illicit-attributed inflow among bulletproof hosting providers tracked by TRM this year to date.

A Russian drug marketplace accounted for nearly 44% of the direct payments Virtualine received from customers and attributed counterparties so far this year, according to TRM. A sextortion scheme accounted for nearly 17% of direct payments to Virtualine, followed by a cryptocurrency mixer at almost 13%, ransomware at nearly 5%, cybercrime services at 3% and malware at 2%.

“Virtualine is another example of Russia’s illicit economy at work: darknet markets, ransomware groups, non-compliant exchanges, and brokers all feeding the same ecosystem,” Ari Redbord, global head of policy at TRM Labs, said in a prepared statement. 

“Bulletproof hosting is the connective tissue. Seizing a domain matters, but the blockchain record doesn’t disappear with it. It shows who is paying, who is getting paid, and where they go next,” he added. 

Virtualine attracted many criminals as customers. Ransomware groups, including Coinbase Cartel, The Gentlemen, INC, DragonForce and Qilin all paid the site’s operators, according to TRM. The bulletproof hosting provider also received payments from the StealC infostealer, the Matanbuchu loader, bot and malware-distribution services and sites linked to CSAM. 

The FBI and prosecutors got a court order to seize Virtualine’s primary domain, which was also known as Secury, Massgod, Spamhouse, Lanedo and Omegatech.

Officials said Virtualine continued hosting services for a customer that distributed CSAM and a hack-for-hire service after it received numerous notices from law enforcement in Germany, Canada, Australia, the National Center for Missing and Exploited Children and a victim’s attorney.

TRM underscores that Virtualine was disrupted, but not completely shut down. “A domain seizure disrupts how customers find and access a service,” researchers wrote. “It does not, by itself, establish that the operator has stopped working, or that customers have lost access to all underlying infrastructure.”

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A new bipartisan House bill would charge the federal government with developing formal guidance for defending AI models against distillation attacks.

The AI Cyber Defense Act, shared exclusively with CyberScoop ahead of release, is sponsored by Reps. Pat Harrigan, R-N.C., and George Whitesides, D-Calif. It would direct the National Institute for Standards and Technology to develop voluntary industry standards and best practices for preventing distillation attacks from foreign entities from four countries: Russia, China, Iran and North Korea.

In an interview, Harrigan told CyberScoop it is “incredibly expensive” for the U.S. AI industry to maintain its six-to-12 month lead over other countries, and distillation attacks give other parties an incentive to copy other models while keeping their own spending low.

He said he believes countries such as China are making a strategic choice to hold back on full investment of their own AI industry, instead betting they can drift behind American companies as they perform the arduous and expensive research and development to advance the field.

“One of my concerns is that our adversaries just see it as much more beneficial and productive for them as this [U.S. industry] engine burns,” said Harrigan. “Where they actually just see it as more beneficial for themselves in the short term, to hang six to 12 months behind the United States, let us burn really hot and for 5 to 10% of the spend, they can just distill and steal, and they can do that up to until the point where our market kind of falters. At which point they can turn it into high gear, having not expended those resources yet in the past, and actually leapfrog us.”

As part of that mission, NIST will first have to define what a distillation attack is, and separate it from much of the sharing and collaboration between open-weight and open-source models that have also helped drive innovation.

Distillation attacks happen when one AI model is trained on the output data and reasoning of another, usually more powerful or advanced, model. The U.S. government, along with AI companies Anthropic, OpenAI and Google, has accused Chinese companies like Moonshot AI, DeepSeek and Alibaba, of carrying out “systematic” campaigns to distill and copy U.S. commercial models.

According to AI and cybersecurity experts, these campaigns involve the use of hundreds of burner and resold accounts and false identities to bypass geographic restrictions to access U.S. frontier models, and involve thousands, sometimes millions of prompts meant to extract valuable outputs and capabilities that can be used to train a foreign model.

Meanwhile, U.S. AI companies themselves face multiple ongoing lawsuits from media organizations, creators, artists and other laborers, who allege that commercial U.S. models were originally trained on their works without any compensation or permission.  

“AI is advancing at a breakneck pace, and every month we keep China and other adversaries from stealing our progress is a month we gain to build the safeguards this technology needs,” Rep. Whitesides said in a statement to CyberScoop.

The bill would also establish an “AI Cybersecurity Roundtable” at NIST composed of governments and AI industry stakeholders that would work to develop voluntary standards for defensive use of AI in cybersecurity in critical infrastructure.

Harrigan said he envisions the roundtable as including frontier AI companies including software and hardware security experts, who can add independent third-party voices in discussions on the best way to defend IT assets in critical infrastructure and other industries. A place “where you can go and pick an off-the-shelf set of standards that says these are the best practices as we know them all today, given the current state of technology development and the threats that are out there.”

The bill defines “entities of concern” as any foreign person or organization headquartered in one of the four listed countries of concern (Russia, China, Iran and North Korea), or one operating under the direction of a company based in those countries. The director of NIST would also have the ability to designate specific individuals or organizations as entities of concern.

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Russian government-connected hackers compromised two defense firms and a law enforcement agency in North Atlantic Treaty Organization countries as part of an espionage campaign, Symantec researchers said in a blog post Tuesday.

The infamous group behind hacks of the Democratic National Committee during the 2016 election cycle was behind the attacks that Symantec identified in recent months: Swallowtail, also known as APT28, Fancy Bear and Forest Blizzard, notorious for its links to the Russian military agency GRU.

The hackers apparently chose the targets of their attacks carefully, including a naval shipbuilder, a manufacturer of military aircraft engines and the law enforcement agency. In the attack on the shipbuilder, Symantec saw “hands-on-keyboard” activity as the hackers repeatedly returned to a compromised host over the course of a week to steal credentialed material.

“Hands-on-keyboard activity means a human operator is choosing what to do next, rather than malware running a fixed routine,” Dick O’Brien, principal intelligence analyst at the Symantec Threat Hunter Team, told CyberScoop. “It’s essentially confirmation that the organization is a genuine target for the operators, not an accidental infection. It also confirms that further exploitation beyond the initial infection was at least attempted.”

O’Brien said the campaign reflected broader intelligence collection aimed at European government and defense targets, but its motive wasn’t certain. He speculated that it could have been part of campaigns to target nations aiding Ukraine in its war against Russia.

The hackers made use of the Hookedge backdoor first identified in August by Recorded Future’s Insikt Group. That firm saw attacks dating back to September of last year by the same group using the same backdoor on defense and diplomatic targets in Romania, Spain and Turkey.

Symantec also observed the hackers deploying a previously undocumented loader.

“What surprised us was that the attackers then moved their most sensitive follow-up activity onto a dedicated server, when Recorded Future had expected them to keep hopping between free services,” O’Brien said. “The loader, ld.exe, hadn’t been publicly documented. It decrypts its payload in memory, and it needs a key supplied only at runtime on the command line. Without both the encrypted file and the key, the payload can’t be recovered. We didn’t recover it, so we don’t know its function.”

This spring, researchers and U.S. government agencies said they quashed a Forest Blizzard espionage campaign. Western governments warned last year about the group targeting companies supporting Ukraine.

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OpenAI disclosed Thursday it shut down two influence operations from Russia and Iran that used ChatGPT and other AI tools to create fake journalist personas and covert think tanks that successfully planted stories and narratives in mainstream news publications.

One cluster of accounts, which OpenAI calls “Dark Clark,” is attributed to Russian actors. The network focused on influencing Latin American politics and culture. Its name comes from Mia Clark, a fake AI persona the group presented as the leader of the Social Research Center, a supposed Latin American think tank used to seed propaganda in news reporting.

The group’s content primarily focused on harming Ukraine’s reputation in Latin America, though it also became involved in hot-button political issues in Argentina and Bolivia.

Based on reports generated through ChatGPT, where operatives discussed wage scales for employees and hiring and firing decisions, OpenAI researchers said it’s likely the Russian group was actually in control of the Social Research Center, rather than being an employee or observer.  

OpenAI called it “the most complex attempt to run a front identity that we’ve disrupted over the past two and a half years.”

“The available evidence indicates that the SRC’s employees in Latin America were not aware that they were working for a Russian group,” OpenAI said. “Unlike another Russia-linked ‘think tank’ that we recently exposed, the SRC appears to have produced a majority of original content via its co-opted staff.”

OpenAI cites several fact-checks and official denials from major media organizations and government officials in Latin America that appear to be in response to Dark Clark’s propaganda.

In March, Lupa Media reported on a TikTok video falsely claiming that the Ecuadorian government was using shell companies to recruit citizens to fight for Ukraine against Russia. The actors also generated and spread fake audio clips of the Ukrainian consul in Ecuador insulting Ecuadorian citizens.

During anti-government protests in Bolivia in May, the group released another fake audio clip, this time of an employee at the state water company claiming that the government was on the verge of declaring a state of emergency and shutting off water to La Paz, prompting an official denial from the Bolivian government.

The report does not attribute the activity to any specific Russian government or intelligence agency. It does mention that its operators seemed particularly interested in Politology, a successor to the Wagner Group, the Russian mercenary force previously led by Yevgeny Prigozhin. According to OpenAI, the group prompted its model for information on Politology “far more” than any other Russian organization.

The Iranian campaign used many of the same AI tools to pitch written articles on the U.S.-Iran war. Operators created at least seven different fake journalist personas who managed to place dozens of stories online through legitimate media organizations. However, the stories themselves often failed to elicit many comments or social media reactions.

“We identified almost 100 articles published or syndicated under the operation’s bylines across roughly a dozen online outlets around the world,” OpenAI said. “These were small to medium outlets, generally focused on international affairs, geopolitics, and events in the Middle East.”

OpenAI said the activity resembled “a commercial actor running a for-hire influence campaign,” but did not attribute it to a specific actor or group.

Most influence campaigns tracked by OpenAI tend to be low-impact, garnering little organic engagement online and virtually no offline impact. Campaigns are rated on an impact scale of 1-6, with few rising above a 1 or 2.

OpenAI rated the Russian campaign a 5 and the Iranian campaign a 4, indicating they were significantly more successful in breaking through to mainstream audiences, eliciting fact checks and official denials that tend to happen when a narrative becomes so big that authorities must deny it.

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The computers that automate water treatment systems across the country were built for durability, not for an internet-connected world. Many still accomplish their fundamental function, but as cyberattacks on the sector mounted this summer, water industry officials say those aging systems, especially internet-exposed operational technology and programmable logic controllers, remain among the easiest ways for adversaries to break in.

Tom Dobbins, executive director of the Water Information Sharing and Analysis Center or WaterISAC, told CyberScoop the sector’s biggest ongoing weaknesses include exposed OT, vulnerable PLCs, insecure connections through integrators and poor cyber hygiene at smaller utilities, which have pushed the center to make threat sharing faster across the sector.

“We have been under attack, and our enemies, the threat actors, are stepping up their activity as the U.S. is involved in a number of conflicts around the world,” Dobbins said.

That includes not only threats from Iran, the nation the U.S. government reportedly believes is behind this summer’s water facility attacks, but also China and Russia, he said.

WaterISAC is announcing a partnership with Cyware Wednesday to use its threat intelligence platform, selecting the company in part because of its existing relationships with other industry ISACs, Dobbins said. The ISAC already has a partnership with the National Rural Water Association to serve 20,000 of the water sector’s smallest utilities, and Dobbins said Cyware would help its analysts further.

It’s a sector that faces myriad challenges, seen by many as further behind on protecting its systems due to financial and technological constraints.

“OT systems that are exposed to the internet are a major challenge, and many of these systems that are older generation need to be not accessible to the internet,” Dobbins said.

Furthermore, programmable logic controllers (PLCs) are “obviously” a “vulnerability point,” he said. 

Those two vulnerabilities were the ones most commonly linked to this summer’s attacks.

Across the sector, PLCs have been the “main point of entry” for hackers, in part because they date back to a “simpler, gentler time,” Dobbins said.

“A lot of the equipment was developed pre-cyber threats and activities,” he said. “The equipment, it’s still valuable, it still is operational, so there’s not a huge reason for or incentive for utilities to upgrade it.”

President Donald Trump has disputed the notion that Iran was behind this summer’s attacks, despite alerts from the Cybersecurity and Infrastructure Security Agency.

“Let’s put it this way: I saw a recent CISA release that pointed to Iran as threat actors, and I know that the president kind of implied that it was not Iran, but I’ll say that CISA maybe is more expert in this area than maybe the president,” Dobbins said. “The president may not have been fully briefed when he made that comment.”

But CISA has also warned of potential threats from Russia and China, he said.

Two other sources of vulnerability for the sector are external — integrators — and internal — employees.

“If those integrators are working and they have a connection into an OT system that’s not managed discretely, then a threat actor can come in through an integrator and get into a system,” he said. 

Then there’s someone “who’s actually a good employee who’s tried to do the right thing and opens an email that has a malicious link in it, so they become subject to a phishing attack,” Dobbins said.

At smaller utilities, it can be difficult to keep up with basic cyber hygiene as well, he said: changing passwords, implementing multifactor authentication.

One way that Cyware might be able to help is by leveraging its relationships with other ISACs, said Tom Stockmeyer, managing director of government and critical infrastructure at Cyware.

“We’re thrilled to add water to the portfolio and start enabling cross-sector sharing,” he said.

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A group of Russian government hackers is refining its attacks to make it easier to eavesdrop on victims and significantly expand its targets among governments, think tanks and nonprofits around the world, with an emphasis on Ukraine, Microsoft research published Tuesday concludes.

The company examined a change in the approach of a group it calls Star Blizzard, which is affiliated with the Russian Federal Security Service (FSB), and its novel malware, RedFlick.

“In 2026, Microsoft observed Star Blizzard shift from exclusively targeted spear-phishing operations to also conducting larger-scale phishing campaigns,” Microsoft wrote in a blog post. “The larger-scale phishing operations were observed at a scale not previously seen from the actor, ranging from tens to hundreds of email messages per campaign. This change likely reflects the actor’s adoption of a mass-mailing phishing platform to automate campaign execution and increase the likelihood of successful compromises by significantly expanding the initial targeting pool.”

Microsoft said the RedFlick campaigns have targeted Ukrainians, as well as financial institutions and governments that have supported Ukraine. It said it has seen the activity affect over 100 organizations that are primarily in the United States or United Kingdom.

One of the things that makes RedFlick effective isn’t just its pure volume, but the fact that its “infection flow only requires a single user interaction, reducing friction in the compromise process,” the company said in its blog post.

The most common phishing lure is inviting potential victims to exclusive events, but it also solicits its targets with information about supposed tax audits, payment notices and fines.

“Since January 2026, Microsoft observed at least 13 distinct large-scale phishing campaigns targeting primarily NGOs, think tanks, and government organizations worldwide,” the company wrote.

The initial targets were in Ukraine but by spring it was going after those outside the nation it invaded in 2022. “The actor’s shift from Ukraine-focused operations to global targets could indicate Star Blizzard initially targeted Ukraine to test their new capabilities,” Microsoft wrote.

RedFlick has been a key adaptation as “a malware delivery technique that helps evade detection by initiating a set of scheduled tasks to deploy the actor’s custom backdoor, CosmicPulse,” the company said.

This isn’t the first time that Microsoft has called out Star Blizzard, with past observations coming in 2023 and 2025 and takedown efforts coming in 2024.

Star Blizzard has been known by other names as well: SEABORGIUM, Callisto Group, TA446 and COLDRIVER.

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Law enforcement has arrested two leaders of a Russian-owned phone hacking company used by Kremlin agencies who allegedly masked its foreign ownership from the U.S. Defense Department, Department of Homeland Security and others to win millions of dollars worth of contracts, the Justice Department announced Wednesday.

Lee Reiber of Boise, Idaho, the CEO of Oxygen Forensics (Oxygen US), was arrested in his home state and Oleg Davydov, one of five Russian nationals whom DOJ said actually controlled the company, was arrested in London, from where the department plans to seek his extradition. They face charges of conspiracy to commit wire fraud.

Publicly, Oxygen went to great lengths to present Reiber as the true leader of a company based in Alexandria, Va., asserting that the company was not controlled by Russian-based executives, according to a criminal complaint., While the company told government agencies it was U.S.-owned, Russian officials with the company repeatedly overruled him, the complaint alleges. 

Oxygen’s business aims were complicated in 2022 after the United States expanded sanctions against Russia following its invasion of Ukraine. That’s when the company installed Reiber as CEO and removed the owners from public corporate filings. An unnamed co-conspirator in the complaint nonetheless said that “fateful decisions will be made by” five shareholders, including Davydov. 

Since March 2022, Oxygen has sold its forensics software to the U.S. Secret Service, Homeland Security Investigations, the DHS inspector general and DOD. After the 2022 sanctions, Oxygen won more than $2 million in contracts and purchases from the Secret Service and its National Computer Forensics Institute. Reiber asserted U.S. ownership as recently as February of this year to the NCFI, according to the complaint.

Reiber knew the company had to conceal its true ownership, the complaint states. Oxygen and its competitors have quarreled in the media and in courts. Oxygen in 2023 faced accusations that Oxygen US and Oxygen Russia were both using software code reverse-engineered from Elcomsoft’s products. Oxygen Russia’s customers included the Russian Federal Security Service (FSB). 

“The accusation mattered to Reiber because answering it truthfully would have required disclosing that Oxygen US and Oxygen Russia sold the same software, developed by the same team, and were owned by the same people,” the complaint reads, citing email correspondence.

Knowing Oxygen’s actual ownership configuration would’ve changed the equation for the government agencies, according to the complaint.

“Procurement officials at the U.S. government customers have represented that they would not have awarded or renewed contracts for the forensic software had they known that OxygenUS was a Russian-owned company,” the complaint reads.

Natalia Krapiva, senior tech-legal counsel at Access Now, celebrated what she nonetheless called an overdue move from DOJ.

“For years, civil society warned that Oxygen Forensics was owned and built from Russia. Now the Justice Department confirmed it,” Krapiva told CyberScoop. “We applaud the U.S. government for taking this crucial step, but the fact that it took so long is both a national security and a human rights scandal.”

“The same technology that extracted data for U.S. investigations has been used inside Russia to jail journalists, activists, and peaceful dissenters. And it doesn’t stop at the U.S. border,” she continued. “We call on the U.S. and over 100 governments using this technology to immediately sever all ties to the company, implement sanctions, and conduct full investigation(s) of how Russian tech designed for the FSB spent all these years inside their sensitive law enforcement operations.”

Court-listed attorneys for Reiber listed in court documents didn’t respond to requests for comment. No attorney for Davydov could be located.

The DOJ in its announcement specified that “The complaint does not allege that the software contained malicious code or that it was used to gain unauthorized access to any customer’s computer systems or data.”

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A 35-year-old Armenian national was sentenced to two years in prison for his involvement in a series of Ryuk ransomware attacks while living in Ukraine and Russia in 2019 and 2020, the Justice Department said Tuesday.

Karen Vardanyan was extradited from Ukraine to the United States last year and pleaded guilty to computer fraud and conspiracy to commit fraud and extortion in July. Vardanyan’s sentencing, which also calls for about $1.2 million in restitution to victims, matches terms of a plea agreement he reached with prosecutors.

Vardanyan and his co-conspirators’ victims include a Michigan-based company that paid a ransom of nearly $1.2 million in January 2020, a Watsonville, Oregon-based technology company that was attacked in December 2019 and a Texas-based school breached in February 2020, according to court records.

“Like Vardanyan, many cybercriminals are not masterminds of a complex ransomware or extortion scheme but nonetheless play an integral part in the success of these crimes,” read a memo signed by U.S. attorneys in the District of Oregon.

“Unfortunately, high rewards and a relatively low risk of detection are basic features of cybercrime. The only way to affect the cost-benefit analysis of these crimes is to impose meaningful sentences on those who are caught,” the U.S. attorneys added.

Prosecutors previously accused Vardanyan and his co-conspirators — Ukrainian nationals Oleg Nikolayevich Lyulyava and Andrii Leonydovich Prykhodchenko, and Armenian national Levon Georgiyovych Avetisyan — of illegally accessing computer networks to deploy Ryuk ransomware on hundreds of compromised servers and workstations between March 2019 and September 2020.

Ryuk ransomware was prevalent in 2019 and 2020, infecting thousands of victims globally across the private sector, state and local municipalities, local school districts and critical infrastructure, including a wave of attacks on U.S. hospitals.

Victims of Ryuk ransomware attacks include Hollywood Presbyterian Medical Center, Universal Health Services, Electronic Warfare Associates, a North Carolina water utility and multiple U.S. news outlets.

Justice Department officials said Vardanyan and his co-conspirators received about 1,160 bitcoins — valued at more than $15 million at the time — in ransom payments from victim companies.

Prosecutors said they found no evidence Vardanyan was still engaged in criminal activity at the time of his arrest. Vardanyan’s incarceration will be followed by three years of supervised release, and his conviction will have immigration consequences resulting in removal from the United States after serving his sentence.

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OpenAI and the Ukrainian government have agreed to a partnership that will provide AI tools and subsidized computing resources to better protect the nation’s critical infrastructure from cyberattacks.

The agreement, announced Wednesday at OpenAI’s New York office, will provide Ukrainian cybersecurity officials with access to advanced AI models designed for cybersecurity work through the company’s Daybreak program. OpenAI said it is also pledging over $1 billion in subsidized tokens to support the initiative.

During a panel discussion Dmytro Kushneruk, consul general of Ukraine in San Francisco, outlined how the tools would be used for cybersecurity automation, including functions such as incident response, threat triaging, login analysis, inventorying systems, code analysis and validating vulnerabilities.

In nearly all cases, Kushneruk said the primary benefit was carrying out those functions at machine speed. But this speed is meant to complement, not replace, Ukrainians’ human expertise.

In regard to incident response Kushneruk said humans must view “thousands and thousands of these logs and they have to find what’s really important, that’s why AI can give capable defenders really much greater advantage and leverage.” 

“This is why the object is not to replace the cyber defender with AI, but to make sure the cyber defender acts faster,” he added.

Kushneruk said that for Ukraine, the partnership “is really not about protecting computers, it is about actually keeping our country running.”

Ukraine faces approximately 6,000 cyberattacks per year, or about 15 per day, according to Kushneruk. Over the past twelve years, the country’s critical infrastructure, including electricity and water systems, has endured sustained attacks from Russia in the form of cyberattacks and physical strikes.

Since Russia’s 2022 invasion, Ukraine’s critical infrastructure has been under constant threat. While missiles remain the primary concern, Kushneruk said Ukraine has been preparing to protect vital services since Russian GRU hackers shut down the country’s power grid in 2015. 

He added that while the country was “maybe not so much prepared” to deal with the fallout in 2015, it improved over time, including the resilience displayed in 2025 when trains kept running after Russian hackers attacked Ukraine’s railway system.

Some national security experts and congressional committees have explicitly cited the resilience of Ukrainian critical infrastructure as a model for U.S. industry.

Naz Durakoğlu, minority staff director of the U.S. Senate Foreign Relations Committee, said there is “pretty much across the board” agreement between the parties in favor of similar adoption of defensive AI tools by U.S. critical infrastructure operators, though issues like regulation remain sticking points.

“This is something that’s already happening, and frankly, it’s just kind of a basic duty of government to make sure that when you turn the tap on, water comes out, the electricity doesn’t go out, and hospitals keep running and treating patients,” said Durakoğlu. “So there is a broad understanding that this is a major issue, and I will say seeing what Ukraine has to go through day-to-day is also a huge wake-up call to our members on a bipartisan basis.”

OpenAI has publicly pushed for its product, and AI at-large, to be used to solve these types of problems. Company president and co-founder Greg Brockman signed an open letter released earlier this year calling for “collective action” and widespread use of AI models to find and fix vulnerabilities before the rest of the world,  including foreign governments and cybercriminals, got access to the same capabilities.

According to Politico, OpenAI CEO Sam Altman met with U.S. power companies in July to discuss using AI to protect the nation’s electrical grids.

On Wednesday, OpenAI’s national security policy head, Sasha Baker, said the company felt “urgency” to try to strike similar agreements with other governments and industries.

“There’s this period of time where we’re really rushing to get [these tools] in the hands of critical infrastructure operators, of governments around the world, of people who want to patch systems, defend their networks, remediate vulnerabilities because we know as these tools proliferate out there in the ecosystems, there are going to be bad guys out there that also try to use them,” said Baker. “So, we have this window of time to take action and we’re really motivated by the idea that we need to act with some urgency.”

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Artificial intelligence has removed the skill advantage that once set state-sponsored hackers apart from lone criminals, according to a threat report Anthropic published Thursday that documents misuse of its Claude models across seven areas of harm.

The report, which details activity observed between December 2025 and August 2026, covers cyber operations, influence operations, surveillance, scams and fraud, biological misuse, conventional weapons development and distillation. Anthropic said it disrupted each operation, strengthened safeguards and shared intelligence with authorities and industry partners where appropriate. 

“The cases we share here aren’t typical misuse, but rather examples of the most notable and novel threat activity we’ve identified to date,” the report reads. “We’re publishing this work because we believe we have a responsibility to disclose malicious misuse of our services. As models become increasingly capable, their risks will increase, unless AI developers and society’s defenders act to make them safer.”

The cyber operations the company detailed were a Russian-aligned espionage campaign that hit more than 20 government and defense organizations across Ukraine and Europe, two Chinese undergraduates who ran an automated exploit foundry that produced more than a dozen potential zero-days in a single month, affiliates of the ShinyHunters crime collective who dumped 2,100 cloud access tokens across 40 corporate tenants in 34 hours, and a lone hacktivist who targeted European political parties via stolen API keys. 

For decades, cybersecurity researchers and investigators have pointed to sophisticated operations as a signature of state-sponsored tradecraft, while crude intrusions suggested amateurs or petty criminals. Anthropic posits in the report that AI has erased that conventional thinking, especially since a “majority of the operations described in this report were enabled by AI via direct execution or orchestration.”

“For threat intelligence investigators, sophistication has stopped being a reliable signal of who is behind an operation,” the report said, adding that a hacktivist on stolen API keys, scattered criminals and a state espionage operator each ran campaigns that a year earlier “would have required many skilled operators and specialist knowledge.”

The most extensive case involved a malicious actor using the handle “JackPoterz” whose actions aligned with Russian state espionage, matching behaviors linked to Midnight Blizzard. 

According to the report, the actor employed a custom toolkit composed of two families of Windows-based implants, a mobile exploitation kit, a credential stealing tool that targets browser password stores, a phishing platform designed to mimic priority targets like government organizations, and an administrative console used to manage compromised accounts. Targets included military intelligence bodies in Ukrainian and European governments, diplomatic and defense organizations, and people connected to U.S. foreign policy.

According to the report, AI monitored whether security products flagged the actor’s malware. When a detection occurred, “agents would then set about the process of autonomously modifying and rebuilding the malware to evade the existing detections,” the report said.

The same actor bulk-exported mailboxes at drone component manufacturers and stole a complete software development kit for a drone vision system, then spent days recovering its architecture and details of an unannounced product. The actor also compromised hotel Wi-Fi vendors to reach guests through DNS hijacking, took over WhatsApp accounts with headless browsers, and stole more than 300,000 national identity records from a North African government agency, along with registry data on more than half a million companies.

The Chinese-speaking operators, which the company says were partly carried out by undergraduates at a Chinese university, put Claude to work on vulnerability research around the clock. One workflow iterating on network appliance firmware “yielded more than a dozen possible zero day findings in a single month.” It ran “agent swarms,” in which a lead agent divided work among parallel subagents, and kept campaign memory between sessions. 

Clusters linked to ShinyHunters showed how AI shortens criminal timelines. One supply-chain breach ended with a dump of more than 2,100 Azure access tokens spanning more than 40 corporate tenants in about 34 hours. “AI agents performed nearly all of the work,” the report said. Another compromise moved from a single stolen developer token to full control of a victim’s cloud environment in roughly three hours.

The report also has a section dedicated to distillation attacks that Anthropic claims were carried out since February by seven labs based in China, including Alibaba, DeepSeek, Moonshot AI, Xiaomi and Zhipu. Operators affiliated with Alibaba ran the largest attack Anthropic has measured, peaking “at nearly 3 million exchanges per day launched from more than 3,500 fraudulent accounts” to harvest the outputs of Claude Opus models for training its Qwen systems.

The outputs were culled from users who never knew they were involved. The report said Moonshot and DeepSeek silently forwarded their own customers’ requests to Claude and returned its answers as their own, exposing data users had not agreed to share, including surveillance footage of a tracked individual pulled by a user likely affiliated with the People’s Liberation Army. Those practices are “likely inconsistent with privacy laws and the labs’ own terms of service,” the report said.

Earlier this week, a joint cybersecurity advisory from the National Security Agency, the Cybersecurity and Infrastructure Security Agency and the FBI accused Chinese AI companies of engaging in a deliberate and “systematic” effort to illegally distill U.S. frontier AI models and their capabilities.

Anthropic said it published the cases to give outsiders a view of how these threats form, framing the disclosures as an early look at a shifting landscape. 

“As models become increasingly capable, their risks will increase, unless AI developers and society’s defenders act to make them safer,” the report said. The old idea of “security through obscurity,” it added, “is no longer viable in this new AI-assisted world: everything connected to the internet is a potential target for exploitation.”

You can read the full report on Anthropic’s website.

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Authorities extradited a 36-year-old Russian national from the Republic of Georgia under accusations of widespread bank-account takeover attacks, including a scheme to defraud two banks of more than $6.3 million, the Justice Department said Tuesday.

Sergei Anatolyevich Filimonov and unnamed co-conspirators ran an extensive operation starting in November 2023 to spoof domains of banks, obtain credentials of legitimate customers and use those details to steal money from accounts with large balances, according to court records. 

Filimonov and his co-conspirators allegedly collected more than 5,000 victim login credentials to various banks, including those assigned to employees with access to a company headquartered in Atlanta and another business with offices in Cumming, Ga.

Authorities said Filimonov and his co-conspirators registered and maintained spoofed domains of banks, purchased sponsored links to direct unsuspecting victims to those domains, and stole credentials from those banks’ customers when they attempted to log into the fraudulent sites.

The alleged bank-account takeover crew also created infrastructure to store victim login credentials and tricked victims into providing additional details to bypass security controls.

Prosecutors said Filimonov and his co-conspirators caused and attempted to cause the unauthorized transfer of nearly $5.58 million from one unnamed bank in June 2024 and $735,000 from another bank in November 2024. Both banks have local branches in the Northern District of Georgia and maintain headquarters in North Carolina, according to the indictment. 

Officials previously seized the domain, which the co-conspirators allegedly used to store credentials harvested from the spoofed banking sites in December 2025. The FBI at the time said it identified at least 19 victims in the U.S. linked to the domain and put total attempted losses at about $28 million, including confirmed losses of about $14.6 million. 

Filimonov is charged with conspiracy to commit bank and wire fraud, access device fraud conspiracy, multiple counts of bank and wire fraud, possession of unauthorized access devices and aggravated identity theft. He faces up to 175 years in prison. 

He pleaded not guilty Sept. 4 and remains detained in the Northern District of Georgia.

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Sality, a Russia-based botnet that infected more than 11 million devices during a 23-year run of operations, was dismantled Monday by law enforcement, CrowdStrike and the Shadowserver Foundation. 

CrowdStrike, which announced the takedown Tuesday alongside authorities, said it played a crucial role dismantling the botnet’s technical infrastructure, rendering the malware-spreading operation irrecoverable. 

The peer-to-peer botnet was a persistent piece of criminal infrastructure that evaded disruption for an exceptionally long period because it lacked centralized architecture. 

Sality used infected machines to communicate peer-to-peer, creating a decentralized structure that made system-wide disruption efforts more difficult than botnets that rely on a core server. 

“The same properties that made Sality resilient also created the conditions for its undoing,” CrowdStrike wrote in a blog post. The company said it targeted Sality’s peer list of infected machines and tricked the network into permanently cutting off access to those devices.

“From the operator’s perspective, infected machines simply disappear,” CrowdStrike wrote, adding that the botnet is no longer under the operator’s control.

Sality’s domains were seized by a globally coordinated effort supported by the FBI, Justice Department and authorities from Europol, Bulgaria, Hungary and Romania, officials said. Shadowserver is working with internet service providers to identify devices infected by Sality and aid with remediation. 

“Cybercriminals, botnets, and malware are a clear and present danger to our nation’s security and economy,” Bill Essayli, first assistant U.S. attorney, said in a statement. 

Europol said the Sality takedown was the culmination of work spanning global law enforcement back to 2017. 

CrowdStrike said Sality’s operator was primarily financially motivated, but it attributed three DDoS attacks to Sality, suggesting the operator was occasionally willing to use the botnet for personal or political aims. 

The botnet enabled cryptocurrency theft and cyberattacks on victims in the United States and abroad, the Justice Department said. Officials did not name the person or cybercrime group behind Sality.

“This operation demonstrates that peer-to-peer architecture, long considered a shield against disruption, is not invincible,” CrowdStrike wrote. 

“Operating for decades without consequence does not mean operating without risk,” the company added. “The calculus has changed. We will find you, we will dismantle your infrastructure, and we will impose costs that make the enterprise untenable.”

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The Trump administration rolled out a six-month test program in Texas on Monday that will draw on volunteer expertise and technology from cyber and artificial intelligence companies to protect the water sector.

“Project Watershed 250” is the first of the state-based, industry-centric pilot projects to cross the finish line that the Office of the National Cyber Director has previewed since the publication of its national cybersecurity strategy earlier this year. Water systems have long been viewed as among the most vulnerable and neediest critical infrastructure sectors, and in recent months the sector has been the victim of a spree of attacks.

“Project Watershed 250 is a commitment from the states, industry and federal government that we will continue to prioritize our nation’s safety and deliver on America-first policies for the American people,” National Cyber Director Sean Cairncross said at a rollout event in San Antonio Monday.

“U.S. companies are providing world-class cyber capabilities, red teaming that tests utilities’ current defenses, system hardening using the latest private sector cyber tools and AI tooling that helps utilities’ frontier cyber defenders to protect Texas water systems and scale proven solutions across the country,” he said. “This six-month pilot program is designed to make our water and wastewater critical infrastructure more resilient and resistant to cyber attacks by proactively finding and fixing system weaknesses.”

The pilot program, featuring collaboration between federal and state governments, stands in contrast to how the Biden administration tried to tackle the issue, with audit requirements that some GOP states challenged in court, forcing Biden’s Environmental Protection Agency to withdraw its rule.

“For too long, at least on the federal level, the government has admired the problem of cybersecurity in water systems,” Cairncross said. “We are going to find out what works. We’re going to target that, and we are going to scale off of this and learn lessons.”

A dozen companies — Parsons, Microsoft, Fortinet, Google Cloud, Palo Alto Networks, Amazon Web Services, Reflection AI, Cloudflare, Zscaler, Forescout, Abnormal AI and Dragos — appeared at the rollout Monday to praise the initiative and tout their contributions to it.

Not everyone praised the initiative elsewhere, however. One cyber professional who works on water security issues, speaking on condition of anonymity, said the program was “all smoke” and that “there’s no real money behind it.”

“The White House did what it always does — reached out to industry with their hands out asking for industry to pay for things the government should be doing, at least in part,” the person said.

Texas Gov. Greg Abbott said the program would be overseen by Cairncross’s office and Texas Cyber Command, which was established just last year. Abbott cited the need for the program by mentioning “an Iranian-backed cyberattack” on 30 water systems across 12 states and a 2024 attack on the water system in Muleshoe, Texas, suspected to be the work of Russian hackers.

“The need for cyber resilience is overwhelming,” Abbott said. “Many rural providers simply don’t have the resources they need to be able to protect themselves.”

Watershed 250 isn’t the only federal effort to bolster water cybersecurity, with lawmakers introducing legislation in the aftermath of the recent attacks. Past legislation that Congress has enacted also sought to tackle the problem.

Updated 8/31/26: with comment from cyber professional.

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The Bureau of Alcohol, Tobacco, Firearms and Explosives insists the cyberattack that it publicly disclosed Wednesday was limited to investigation targets, and has not impacted other agency systems.

ATF said it is responding to the breach, which first became public after a prolific ransomware group claimed it accessed the federal agency’s network “The incident involved a standalone computer system containing information about targets of ATF investigations,” Tanya Roman, ATF’s public affairs chief, told CyberScoop in an email.

“The standalone system was not connected to any other ATF systems, including any case management systems, laboratory systems, or eForms systems, and it was quickly shut down when the breach was discovered,” Roman added. 

Qilin, a financially-motivated threat group composed of Russian-speaking operators, claimed responsibility for the attack, but its involvement hasn’t been independently confirmed. The group has claimed hundreds of victims from more than 60 countries since 2022 and became one of the most active ransomware threats globally by mid-2025, according to Halcyon. 

ATF declined to comment on Qilin’s alleged involvement, the root cause of the attack or when it occurred. Yet, the agency disclosed the attack hours after Qilin claimed it breached ATF’s systems.

“This is an ongoing investigation, and no further details can be shared at this time,” Roman said. 

The federal law enforcement agency, which is under the Justice Department, said senior officials designated the event a “major incident” and completed notifications. “The incident has not impacted ATF’s ability to perform its missions,” ATF said in a statement.

Qilin operates an affiliate-based ransomware model and remains highly active, claiming dozens of new victims monthly across manufacturing, health care, financial services, education and government sectors.

The FBI said Qilin was among the five-most reported ransomware variants reported to Internet Crime Complaint Center last year. Google also said the group was one of the most active ransomware brands in 2025.

The majority of Qilin’s victims are based in the United States and nearly 1 in 4 alleged targets are in the manufacturing industry, according to Halcyon. The extortion group has formed strategic partnerships with Scattered Spider and Moonstone Sleet, and uses infrastructure overlapping with BianLian. 

While Qilin has targeted organizations in the government sector before, its claimed attack against a federal law enforcement agency could mark an escalation in targeting. Yet, its objectives in this case are unclear as any ransom payment is very unlikely.

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A newly-signed presidential memorandum enlisting private sector companies in federal law enforcement hacking operations against criminal organizations could present a number of legal, practical and moral pitfalls, cyber experts told CyberScoop a day after the order was released.

While some have celebrated the memo as an overdue maneuver to more aggressively combat cybercriminals, others view it as risky at best and potentially destructive at worst. Supporters, critics and everyone in between also said that how it plays out could be decided in the 60-day timeframe the memo sets to establish the program.

But ultimately, “it’s a massive shift in the cyber policy community,” said Michael Garcia, a former top official at the Cybersecurity and Infrastructure Agency. “This is a philosophical shift.”

The Concerns

On the most critical end of the spectrum is security consultant Davi Ottenheimer, who has been a proponent of concepts like “hack back” or “active defense” that envision a bigger role for the private sector. But he was unsparing in his criticism of the Trump memo. 

“It’s an embarrassment to America,” he told CyberScoop. “It’s like seeing somebody strapped onto a horse backwards, looking at the wrong end of a rifle.”

The Trump memo’s approach has been likened to the “letters of marque” concept used in early U.S. history, when it authorized sea privateers to attack and capture enemy ships and goods on behalf of the country. But Ottenheimer, founder of Ottenheimer GmbH, noted that the practice fell out of favor for good reason in the 1800s because of the violence it unleashed and how it contributed to mercenarism.

Additionally, the memo raises a number of targeting-related issues, he said. Ottenheimer is concerned about Trump’s intentions. The memo specifically pertains to the use of participating companies against transnational criminal organizations.

“Left-wing opposition, liberals, anti-fascists —they’re all criminals to him,” Ottenheimer said. “So to authorize attacking criminals under this means private organizations can go hack people that he designates as criminals.”

Under the memo, the program must establish legal and constitutional procedures for the prior approval of the targeting of U.S. citizens, as well as develop procedures to halt any unintentional targeting of U.S. people or systems. 

However, the limitation on targeting criminals only creates a perverse incentive for attackers and a peculiar defense for anyone who’s attacked, Ottenheimer said.

He envisioned a scenario for a company participating in the program where “you’re hacking [a target], and they go, ‘Hey, we’re the state.’ And then [private companies] are like, ‘Oh, I can’t hack you anymore.’ Boom. They decided when you can and can’t hack.”

Furthermore, “you incentivize people to know as little as possible so [operations] can be authorized,” he said.

The memo raises ethical concerns for him as well: “You can’t attack somebody and then say it’s your fault that you didn’t notify them you didn’t want to be attacked.”

“There’s no notice for you being designated. There’s no prevention of you being designated. There’s no way for you to know you’re being designated,” Ottenheimer said. “That’s like a person sitting down next to you and smoking a cigarette and blowing smoke in your face and saying, ‘Hey, you got to say you don’t like cancer if you don’t want me to do this to you right now.’”

Garcia, now vice president of the cybersecurity practice at Monument Advocacy, said he supports some of the ideas of the memo, but worries about how it will be executed.

“It comes down to attribution, and if you make a risky bet on who we’re attributing [attacks] to, that’s where things can get dicey,” Garcia told CyberScoop.

There could be pressure to attribute faster, which could perhaps lead to lower certainty about who’s being targeted, and that in turn could lead to a private sector company accidentally attacking a foreign government, he said.

That raises legal questions: “It’s in the Constitution —the federal government has the ability to wage war. And there are laws by which private citizens can’t take up arms,” Garcia said.

He wanted the memo to include court oversight of the program, similar to what’s been required for private sector takedown operations. .

Garcia also isn’t sure whether there will be a big enough pool of companies willing to jump into offensive cyber operations.

“From the lawyer perspective, it’s, ‘Are you okay with engaging in this kind of legal risk? And who knows what protections the government will provide?’” he said. “I’d be very curious to see what the foreign governments’ reactions are — ‘We’re going to cut ties with any participating company that engages in this.’”

Errata Security CEO Robert Graham wrote that under the program, companies “are not willy-nilly hacking back,” given the federal supervision elements. “Though, I wonder if it doesn’t eventually morph into law enforcement saying ‘Stop bothering us, just do what you think is best.’’” 

The Case For

The Trump administration and the memo’s supporters  have touted it as a means to put the United States on stronger ground in cyberspace. 

Amanda Naylor, the director of cyber policy at the National Security Council who worked on the memo, said on LinkedIn that it was designed “to bring the capabilities, speed, and innovation of the American private sector into the fight against transnational cybercrime and fraud.”

Former Trump White House cybersecurity official Joshua Steinman said he views the memo as a step toward “parity,” given how U.S. adversaries operate in cyberspace.

“The Chinese and the Russians do this at scale, and I guarantee you they have very few limiting tools when they do it,” said Steinman, now founder of the security firm Gavalnick. “It opens up an entire workforce that allows us to go out and achieve strategic objectives.”

The restrictions in the memo are important, he told CyberScoop.

“The most sensitive things are going to continue to be done by the uniformed and authorized civilian workforces, but there’s a lot of low-hanging fruit,” i.e., criminal organizations, Steinman said. He doesn’t have any fear of the program overstepping as a result.

“We operate like a Boy Scout in cyberspace,” he said. “It’s measured and reasoned.” He compared it to the Right to Try Act for medications.

He also said he expects to see a lot of interest in participating in the private sector.

Ari Redbord, global head of policy at TRM Labs, praised the memo too, calling it “a huge step toward empowering the private sector at a critical moment” that “has a real opportunity to be truly transformative.”

“Scammers are using AI to move with unprecedented speed and scale, stealing billions in life savings from average Americans and small businesses,” he said. “The private sector holds the data. The public sector holds the authorities. This [memo] puts them together.”

What’s Next

The coordination center charged with establishing the program under the memo has 60 days to complete its work. That process could determine a lot. Graham noted that the memo has a classified annex, too.

The memo as written is quiet about what becomes of any seized assets, Graham noted. Redbord raised the same topic as one of his questions about execution of the memo. 

“What government direction and control looks like in the middle of a live operation,” he said in listing his questions. “How disruption turns into actual dollars back in victims’ pockets, and whether we can build a true victim compensation fund as part of this program. What happens when an operation touches a third country with its own laws and its own interests. And how success gets measured, in money recovered and networks dismantled.”

Will Barker, cybersecurity adviser at Huntress, said what’s next could be key.

“The 60-day implementing guidance is where the real substance lives,” he said in a written quote. “Minimum standards, operational procedures, the adjudicatory framework for target selection.”

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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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One of the most difficult obstacles to overcome in the quantum race will be the supply chain, given how diffuse it is, a top White House official said Wednesday.

“Supply chain is one of the biggest challenges in my mind, and really, the challenge with the quantum supply chain is that quantum is not defined by a single hardware platform,” said Brad Blakestad, director of the National Quantum Coordination Office within the White House Office of Science and Technology Policy.

“If you look at the quantum computing technologies, the quantum sensing technologies, the networking — those are all different,” he said in a webinar hosted by Inside Cybersecurity and USTelecom. “And even within computing, there’s seven different modalities that use completely different components. So we have this not just one monolithic supply chain, but just a bunch of different supply chains that are kind of intertwined in various ways.”

Blakestad made his remarks a little more than a month after President Donald Trump signed two executive orders on quantum computing. He referenced proposed ways to address the supply chain challenge in one of the orders.

“The other major issue or challenge that we face right now is that we’re on the cusp of quantum exploding from a commercialization perspective, but we’re not quite there yet,” he said. “So there’s not the funding, the revenue coming from large-scale quantum companies at this point to really make the supply chain as robust as you would want. So thinking about it from the government perspective, it’s just [that] there are too many places that I would want to bolster and not enough funding to do it.”

Blakestad touted steps to help that along such as the government buying widgets from a company that makes them to certain specifications, or prize challenges.

The quantum supply chain isn’t just diffuse in the United States, an International Institute for Strategic Studies policy paper noted Wednesday. It’s “inherently international: no single country dominates the supply chain, whether specialised materials, cryogenic equipment, hardware, software, fabrication or algorithms,” the authors, Dongyoun Cho and Maria Shagina, wrote.

And a March report from the Center for a New American Security identified strengthening the quantum supply chain as pivotal to the United States seizing the benefits of the technology, citing gaps in the U.S. supply chain and reliance on foreign suppliers such as China and Russia. 

Supply chain wasn’t the only obstacle Blakestad mentioned as looming large.

“The encryption challenge is a real challenge, and we want to make sure that we are aware of when quantum computers will ultimately get to a scale that they start having these sorts of implications and move as quickly as we can,” he said. “So, just by owning the technologies, by owning the workforce, by making the United States the place that people want to come to be on the cutting edge of this technology, I think that kind of addresses both of those issues, and that’s what makes it so critical.”

Another difficulty is measuring progress, Blakestad said: “It’s also very, very hard to benchmark, and to know that you’re actually doing what you’re supposed to, what you are intending to do.”

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A Russian state-sponsored threat group has been stealing sensitive data from governments and commercial organizations since July 2025 via a novel exploit in popular Linux-based enterprise software, U.S. authorities and cyber officials from more than a dozen other countries warned in a joint cybersecurity advisory Thursday.

Laundry Bear’s most recent espionage campaign involves the exploitation of a zero-day vulnerability in Zimbra Collaboration Suite that wasn’t patched until November 2025, five months after attacks were well underway, officials said. 

The exploit just requires a view — no clicks — and allows attackers to steal the previous 90 days’ worth of email, the account’s password, search history, the victim organization’s email directory, two-factor authentication tokens and other newly created passwords.

“The covert and persistent nature of this activity, along with the absence of any known financial extortion, almost certainly indicates this group’s involvement in espionage activities with Russian government backing,” officials wrote in the advisory. 

“Additionally, extensive Ukrainian targeting, prior to use against U.S. and other NATO allies, outlines an increasing trend within Russian cyber threat groups to target Ukrainian users first—both as a priority target and as a testbench for malicious cyber techniques before broader global deployment.”

The state-sponsored espionage group, also known as Void Blizzard, has compromised governments and organizations in the defense, education, energy, law enforcement, media, finance, transportation and technology sectors. 

Laundry Bear’s year-long campaign involving the exploitation of CVE-2025-66376 showcases more technical capabilities, including a custom JavaScript payload it delivers to targeted victims via phishing emails. The threat group could also likely adapt the novel data exfiltration and aggregation capability, dubbed “beehive,” to exploit other vulnerabilities, officials warned.

The defect’s medium-severity rating of 6.1 underscores the challenge defenders regularly confront in prioritizing patching schedules based on measure of severity alone.

The Russian state-supported group, which has been active since at least 2024, is still actively exploiting Zimbra Collaboration Suite instances that remain unpatched, officials said.

Authorities shared Thursday indicators of compromise, mitigation steps and urged organizations to update their vulnerable software.

“This campaign’s targeted victimology and limited exploitation capabilities likely indicate this group manually identifies and targets the victim organizations” by identifying organizations with public-facing infrastructure, officials wrote in the advisory.

Once a target is identified, Laundry Bear also likely compiles email addresses for users to target with the exploit via phishing emails. Officials did not identify specific victims or describe the volume of organizations already compromised.

The joint cybersecurity advisory was issued by the United States, Australia, Canada, New Zealand, the United Kingdom, Czech Republic, Denmark, Estonia, Finland, France, Italy, Moldova, the Netherlands, Poland, Spain and Sweden.

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The people orchestrating North Korea’s IT worker scheme are funneling money through a web of front companies and intermediaries, including sanctioned entities, that partly fund Russia’s war effort against Ukraine, DTEX said in a report Tuesday.

The security firm’s research shows that the scheme is moving beyond funding the country’s weapons program and into a bigger pool that supports many of the regime’s objectives. This includes manufacturing weapons and supplying them to Russia’s military, according to DTEX.

“When we think IT workers, we typically think head down, get your money, support the weapons program,” Michael Barnhart, nation state investigator at DTEX and lead author of the report, told CyberScoop.

“It’s a broad cover-all statement when we say it’s supplying the weapons program,” he said. “That’s the predominant place it goes,” but many other domestic programs and entities tasked with other projects are taking cuts from that pool of money as well. 

Barnhart corroborated previously leaked data from an internal North Korean payment server, which included 390 IT worker accounts, chat logs and transaction data.

He mapped the transactions to organizations that received those funds, including multiple sanctioned entities: Sobaeksu, Saenal, and Songkwang. 

The money trail also showed $1.97 million in payments from North Korean IT workers between December 2025 and February 2026 flowing directly through Korea Ryonbong General Corp, a sanctioned defense entity that procures weapons for the regime’s military programs.

Western officials previously reported that North Korea provided ammunition and weapons to Russia in 2023, and in the fall of 2024 sent upwards of 15,000 soldiers to fight alongside Russian troops, according to the Council on Foreign Relations.

“This is a consequence that is often overlooked,” Barnhart wrote in the report. “Revenue from the IT worker stream does not stop at a resume scam or a payroll-abuse story. It can feed a larger DPRK system that supports sanctioned entities, domestic state needs, and a Russia war effort that is actively consuming all facets of North Korean weapons and military support.” 

Data from the internal North Korean payment server, which was first published by ZachXBT in April, is controlled by “PC-1234,” a single administrator that DTEX has been tracking for a while. The wallet and its cluster of activity remains active, Barnhart said. 

The three months of previous activity attributed to the wallet amounted to more than $2.84 million, which then flowed upward into dozens of organizations. 

“It’s not a top-down funded regime. It’s a bottom-up,” Barnhart said. “Everyone makes money at the bottom and then they take a tiny cut, and then the money goes upwards to what we just blanketly say is the weapons program. But really, it can go a lot more places.”

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