How Microsoft’s cybercrime unit has evolved to combat increased threats

Governments and the tech industry around the world have been scrambling in recent years to curb the rise of online scamming and cybercrime. Yet even with progress on digital defenses, enforcement, and deterrence, the ransomware attacks, business email compromises, and malware infections keep on coming. Over the past decade, Microsoft's Digital Crimes Unit (DCU) has forged its own strategies, both technical and legal, to investigate scams, take down criminal infrastructure, and block malicious traffic.

The DCU is fueled, of course, by Microsoft's massive scale and the visibility across the Internet that comes from the reach of Windows. But DCU team members repeatedly told WIRED that their work is motivated by very personal goals of protecting victims rather than a broad policy agenda or corporate mandate.

In just its latest action, the DCU announced Wednesday evening efforts to disrupt a cybercrime group that Microsoft calls Storm-1152. A middleman in the criminal ecosystem, Storm-1152 sells software services and tools like identity verification bypass mechanisms to other cybercriminals. The group has grown into the number one creator and vendor of fake Microsoft accounts—creating roughly 750 million scam accounts that the actor has sold for millions of dollars.

The DCU used legal techniques it has honed over many years related to protecting intellectual property to move against Storm-1152. The team obtained a court order from the Southern District of New York on December 7 to seize some of the criminal group’s digital infrastructure in the US and take down websites including the services 1stCAPTCHA, AnyCAPTCHA, and NoneCAPTCHA, as well as a site that sold fake Outlook accounts called Hotmailbox.me.

The strategy reflects the DCU’s evolution. A group with the name “Digital Crimes Unit” has existed at Microsoft since 2008, but the team in its current form took shape in 2013 when the old DCU merged with a Microsoft team known as the Intellectual Property Crimes Unit.

“Things have become a lot more complex,” says Peter Anaman, a DCU principal investigator. “Traditionally you would find one or two people working together. Now, when you’re looking at an attack, there are multiple players. But if we can break it down and understand the different layers that are involved it will help us be more impactful.”

The DCU’s hybrid technical and legal approach to chipping away at cybercrime is still unusual, but as the cybercriminal ecosystem has evolved—alongside its overlaps with state-backed hacking campaigns—the idea of employing creative legal strategies in cyberspace has become more mainstream. In recent years, for example, Meta-owned WhatsApp and Apple both took on the notorious spyware maker NSO Group with lawsuits.

Still, the DCU's particular progression was the result of Microsoft's unique dominance during the rise of the consumer Internet. As the group's mission came into focus while dealing with threats from the late 2000s and early 2010s—like the widespread Conficker worm—the DCU's unorthodox and aggressive approach drew criticism at times for its fallout and potential impacts on legitimate businesses and websites.

“There's simply no other company that takes such a direct approach to taking on scammers,” WIRED wrote in a story about the DCU from October 2014. “That makes Microsoft rather effective, but also a little bit scary, observers say.”

Richard Boscovich, the DCU’s assistant general counsel and a former assistant US attorney in Florida’s Southern District, told WIRED in 2014 that it was frustrating for people within Microsoft to see malware like Conficker rampage across the web and feel like the company could improve the defenses of its products, but not do anything to directly deal with the actors behind the crimes. That dilemma spurred the DCU’s innovations and continues to do so.

“What’s impacting people? That’s what we get asked to take on, and we’ve developed a muscle to change and to take on new types of crime,” says Zoe Krumm, the DCU’s director of analytics. In the mid-2000s, Krumm says, Brad Smith, now Microsoft’s vice chair and president, was a driving force in turning the company’s attention toward the threat of email spam.

“The DCU has always been a bit of an incubation team. I remember all of a sudden, it was like, ‘We have to do something about spam.’ Brad comes to the team and he’s like, ‘OK, guys, let’s put together a strategy.’ I’ll never forget that it was just, ‘Now we’re going to focus here.’ And that has continued, whether it be moving into the malware space, whether it be tech support fraud, online child exploitation, business email compromise.”

As the group has matured and expanded into all of these areas, Boscovich says, a “preoccupation with exposure to liability and risk” is another element of the work that keeps him up at night.

“You want to help, and you want to do all these things, but no good deed goes unpunished sometimes,” he says. “Sometimes, we would try to help someone—and to help them you kind of shut their computer down—and even though you’re trying to help them, their small business goes down. So how do you manage that? That’s always been the hardest part of my job. The legal creativity is cool, but how do I make sure that it’s acceptable risk and that we research everything so there’s no collateral damage?”

The legal strategies the group has focused on developing evolve as digital threats evolve. In 2016, the DCU began taking the approach of establishing a court “special master” when working on disruptions related to state-sponsored hacking. This judge-appointed official is a direct point of contact for ongoing cases and even remains active for years after a case has been officially closed, enabling the DCU to get court approval for infrastructure takedowns and other actions without having to file for new court orders.

“It allows us to stay on top of these threats and get an order within minutes,” Boscovich says. “We can accelerate the process of litigation almost to the speed of cyber.”

He also points out the challenge of taking action against threat actors given the professionalization of the cybercriminal ecosystem in recent years. Crime groups now operate as syndicates with different departments working on different aspects of carrying out crimes while also contracting with third parties for services they don't develop in-house.

“There’s a legal problem: How do you get a bunch of people doing separate activities into one complaint or one charge? They don’t always even know each other,” Boscovich says. To address this situation, the group worked on legal strategies under the US Racketeer Influenced and Corrupt Organizations Act (RICO), which is designed to focus on criminal organizations rather than individual criminal acts.

“These are the guys who developed the malware, brokered the malware, operate the malware, so we can put them all into one legal filing to bring them together,” he says. “Now that has become part of our legal game plan as well.”

As cybercriminal and state-backed hacking has continued to escalate, the DCU has expanded its collaborations with law enforcement and used its techniques during an ever-changing array of global crises. In 2016, for example, the group carried out its first disruption of a state actor, conducting takedowns related to Russia’s APT 28, known as Fancy Bear. The attackers had been using Microsoft-like domains in their notorious phishing rampages and disinformation campaigns related to that year’s US elections. In 2018, the group shared findings with the Delhi police about the actors behind 10 criminal call centers in India who were scamming victims in the US, Canada, the Netherlands, and Australia. The information-sharing resulted in 63 arrests. In 2020, the DCU seized domains used in pandemic-related cybercrime and also conducted takedowns against the notorious Trickbot ransomware group ahead of the 2020 US elections.

“We tend to think about it from the victim protection perspective,” says Amy Hogan-Burney, who oversees the DCU as Microsoft's general manager and associate general counsel of cybersecurity policy and protection. “I leave deterrence generally to governments, but what I always focus on is victim protection. That can be narrow, meaning a Microsoft customer or type of Microsoft customer, or it can be really broad—anyone who is using the Internet who may be impacted by cybercrime.”

This story originally appeared on wired.com.