The FBI, along with Google and Lumen Technologies, took down a major cybercrime network based in China that was responsible for an estimated $1.9 billion in losses, officials said Friday. 

Outsider, which provided phishing kits and hosted infrastructure for cybercriminals since July 2023, facilitated a wave of phishing attacks against people and businesses in 55 countries, including the United States, the FBI said in a LinkedIn post.

The jointly coordinated effort dubbed “Operation Ghost Hook” netted the seizure of several domains of the group’s core admin servers, a Shopify storefront, roughly $100,000 from Outsider payment wallets and thousands of domains registered through U.S.-based providers, officials said.

The FBI said it also used an Outsider Telegram bot to access information on the cybercrime network’s customers.

“The criminals behind Outsider Enterprise built a business out of impersonating trusted brands to defraud hundreds of thousands of victims,” Brett Leatherman, assistant director of the FBI’s cyber division, said in a statement.

Authorities traced Outsider’s phishing domains to nearly 3.9 million stolen credit cards.

Google, one of the vendors impersonated by the phishing kits, described Outsider as a massive AI-powered operation. 

Outsider provided its phishing kit, which allowed cybercriminals to create fake sites and phishing campaigns to steal credit cards, bank account credentials and personal data, for a weekly subscription as low as $88 per week, the company said in a civil lawsuit it filed to dismantle the cybercrime network’s infrastructure. 

The China-based group behind the operation encouraged and provided step-by-step instructions for customers to use Gemini and other AI platforms to generate custom code for phishing lures and corresponding sites for illegitimate missed packages, overdue highway tolls, parking violations, issues with a brokerage account or wireless carrier rewards.

“The Outsider software allows scammers to request multiple types of verification from victims, including SMS, PIN, email and app verification,” Google wrote in the lawsuit filed in the U.S. District for the Southern District of New York. “This flexibility enables the enterprise to defeat various forms of authentication security.”

Google said it’s working with AT&T, T-Mobile and Verizon to intercept the spam messages before they reach customers, but these types of phishing attacks are prevalent and have been spreading for years. 

Google is also pushing for legislative action, including a series of bills, to combat these scams, General Counsel Halimah DeLaine Prado wrote in a blog post.

“Litigation alone won’t end this,” she wrote. “As threats evolve, our laws must, too.”

Google said it doesn’t know the real names of the people or entities involved in Outsider, but said the operation is supported by multiple cybercrime groups providing different roles with overlapping infrastructure.

The FBI said the takedown was part of Operation Riptide, an ongoing campaign targeting cybercriminals and the infrastructure and financial networks they use to commit fraud.

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The FBI is warning organizations and defenders about Kali365, a growing phishing-as-a-service platform that retrieves Microsoft 365 access tokens, issuing a public service announcement Thursday. 

The toolkit bypasses multi-factor authentication and abuses OAuth device code authorizations via phishing lures impersonating common enterprise services. This technique grants cybercriminal-controlled applications access to Microsoft 365 accounts, opening victims up to a host of follow-on malicious activity, including data theft, fraud, extortion and ransomware attacks.

Kali365 is one of many rapidly emerging device-code phishing tools, which are gaining popularity as a more effective means for cybercriminals to circumvent security controls while abusing legitimate Microsoft device authorization pages, according to researchers. 

Instead of gaining access to accounts via phishing kits that steal credentials and second-factor authentication codes, device-code phishing platforms connect a malicious app to a legitimate account with a single code. The process requires fewer steps and less interaction with the user, but victims do have to copy-and-paste a code generated by the Kali365 platform to grant access.

“We see quite a bit of this device-code phishing activity, but so much of it looks really similar. They’re all using the same types of lures, the same types of content, the same branding,” Selena Larson, senior threat researcher at Proofpoint, told CyberScoop. “It is very much AI generated, AI driven, and the threat actors, I think, are finding it pretty effective because we’re seeing this shift happen kind of all at once.”

Proofpoint researchers observed seven device-code phishing tools that looked nearly identical during a 10-day period last month.

Device-code phishing isn’t new, but platforms like Kali365 have integrated new techniques that differ from MFA phishing, and might be more effective as a result. “It’s something that people might not be used to. It’s a little bit sleeker,” Larson said.

This also partly explains why these cybercriminal tools are growing so quickly. Larson said Proofpoint observed an explosion in device-code phishing activity starting in February. 

By April, Kali365 was up and running and primarily distributed on Telegram, according to the FBI. “Kali365 lowers the barrier of entry, providing less-technical attackers access to AI-generated phishing lures, automated campaign templates, real-time targeted individual/entity tracking dashboards, and OAuth token capture capabilities,” the agency said in the public warning. 

Researchers at Arctic Wolf Labs, which has also been tracking large-scale campaigns linked to Kali365, said the platform charges affiliates $250 for 30 days of service or $2,000 for a full year.

Kali365 stores the OAuth access and refresh tokens it captures, and makes those available to affiliates on its platform. Those tokens can also be shared and reused by other cybercriminals who didn’t participate in the initial phishing lure, Arctic Wolf researchers added. 

The FBI also noted that these Microsoft 365 tokens provide persistent access, allowing attackers to wade through multiple Microsoft services without a password or additional MFA requests. 

“Identity can be very, very powerful once you’re in an organization,” Larson said, adding that attackers can abuse that access to impersonate people, access and steal data for extortion, commit fraud and deploy malware.

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Still under development, Bluekit provides users with automated domain registration and an AI Assistant.

The post New Bluekit Phishing Kit Features AI Assistant appeared first on SecurityWeek.

Threat actors are reusing Tycoon 2FA tools across other phishing kits following the platform’s disruption.

The post Tycoon 2FA Loses Phishing Kit Crown Amid Surge in Attacks appeared first on SecurityWeek.