A state-sponsored Chinese hacking group has been spying on a wide range of U.S. critical infrastructure organizations, from telecommunications to transportation hubs, Western intelligence agencies and Microsoft (MSFT.O) said.
The espionage has also targeted the U.S. island territory of Guam, home to strategically important American military bases, Microsoft said in a report, adding that “mitigating this attack could be challenging.”
While China and the United States routinely spy on each other, analysts say this is one of the largest known Chinese cyber-espionage campaigns against American critical infrastructure.
Chinese foreign ministry spokesperson Mao Ning said on Thursday the hacking allegations were a “collective disinformation campaign” from the Five Eyes countries, a reference to the intelligence-sharing grouping of countries made up of the United States, Canada, New Zealand, Australia and the UK.
Mao said the campaign was launched by the U.S. for geopolitical reasons and that the report from Microsoft analysts showed that the U.S. government was expanding its channels of disinformation beyond government agencies.
It was not immediately clear how many organizations were affected, but the U.S. National Security Agency (NSA) said it was working with partners including Canada, New Zealand, Australia, and the UK, as well as the U.S. Federal Bureau of Investigation to identify breaches. Canada, UK, Australia and New Zealand warned they could be targeted by the hackers too.
Microsoft analysts said they had “moderate confidence” this Chinese group, which it dubbed as ‘Volt Typhoon’, was developing capabilities that could disrupt critical communications infrastructure between the United States and Asia region during future crises.
The Chinese activity is unique and worrying also because analysts don’t yet have enough visibility on what this group might be capable of, he added.
As China has stepped up military and diplomatic pressure in its claim to democratically governed Taiwan, U.S. President Joe Biden has said he would be willing to use force to defend Taiwan.
Security analysts expect Chinese hackers could target U.S. military networks and other critical infrastructure if China invades Taiwan.
The NSA and other Western cyber agencies urged companies that operate critical infrastructure to identify malicious activity using the technical guidance they issued.
Microsoft said the Chinese hacking group has been active since at least 2021 and has targeted several industries including communications, manufacturing, utility, transportation, construction, maritime, government, information technology, and education.
NSA cybersecurity director Rob Joyce said the Chinese campaign was using “built-in network tools to evade our defences and leaving no trace behind.” Such techniques are harder to detect as they use “capabilities already built into critical infrastructure environments,” he added.
As opposed to using traditional hacking techniques, which often involve tricking a victim into downloading malicious files, Microsoft said this group infects a victim’s existing systems to find information and extract data.
Guam is home to U.S. military facilities that would be key to responding to any conflict in the Asia-Pacific region. It is also a major communications hub connecting Asia and Australia to the United States by multiple submarine cables.
Bart Hoggeveen, a senior analyst at the Australian Strategic Policy Institute who specializes in state-sponsored cyber attacks in the region, said the submarine cables made Guam “a logical target for the Chinese government” to seek intelligence.
Canada’s cybersecurity agency said it had no reports of Canadian victims of this hacking as yet. “However, Western economies are deeply interconnected,” it added. “Much of our infrastructure is closely integrated and an attack on one can impact the other.”