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June 5, 2023

PerfectData Software Abuse and Account Takeover Risks

Darktrace investigates several attacks through PerfectData Software on Microsoft 365 accounts and shows how we were able to prevent full account takeovers.
Inside the SOC
Darktrace cyber analysts are world-class experts in threat intelligence, threat hunting and incident response, and provide 24/7 SOC support to thousands of Darktrace customers around the globe. Inside the SOC is exclusively authored by these experts, providing analysis of cyber incidents and threat trends, based on real-world experience in the field.
Written by
Dariush Onsori
Cyber Security Analyst
Written by
Sam Lister
SOC Analyst
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05
Jun 2023

Introduction: PerfectData Software

Amidst the ever-changing threat landscape, new tactics, techniques, and procedures (TTPs) seem to emerge daily, creating extreme challenges for security teams. The broad range of attack methods utilized by attackers seems to present an insurmountable problem: how do you defend against a playbook that does not yet exist?

Faced with the growing number of novel and uncommon attack methods, it is essential for organizations to adopt a security solution able to detect threats based on their anomalies, rather than relying on threat intelligence alone.   

In March 2023, Darktrace observed an emerging trend in the use of an application known as ‘PerfectData Software’ for probable malicious purposes in several Microsoft 365 account takeovers.

Using its anomaly-based detection, Darktrace was able to identify the activity chain surrounding the use of this application, potentially uncovering a novel piece of threat actor tradecraft in the process.

Microsoft 365 Intrusions

In recent years, Microsoft’s Software-as-a-Service (SaaS) suite, Microsoft 365, along with its built-in identity and access management (IAM) service, Azure Active Directory (Azure AD), have been heavily targeted by threat actors due to their near-ubiquitous usage across industries. Four out of every five Fortune 500 companies, for example, use Microsoft 365 services [1].  

Malicious actors typically gain entry to organizations’ Microsoft 365 environments by abusing either stolen account credentials or stolen session cookies [2]. Once inside, actors can access sensitive data within mailboxes or SharePoint repositories, and send out emails or Teams messages. This activity can often result in serious financial harm, especially in cases where the malicious actor’s end-goal is to elicit fraudulent transactions.  

Darktrace regularly observes malicious actors behaving in predictable ways once they gain access to customer Microsoft 365 environment. One typical example is the creation of new inbox rules and sending deceitful emails intended to convince recipients to carry out subsequent actions, such as following a malicious link or providing sensitive information. It is also common for actors to register new applications in Azure AD so that they can be used to conduct follow-up activities, like mass-mailing or data theft. The registration of applications in Azure AD therefore seems to be a relatively predictable threat actor behavior [3][4]. Darktrace DETECT understands that unusual application registrations in Azure AD may constitute a deviation in expected behavior, and therefore a possible indicator of account compromise.

These registrations of applications in Azure AD are evidenced by creations of, as well as assignments of permissions to, Service Principals in Azure AD. Darktrace has detected a growing trend in actors creating and assigning permissions to a Service Principal named ‘PerfectData Software’. Further investigation of this Azure AD activity revealed it to be part of an ongoing account takeover. 

‘PerfectData Software’ Activity 

Darktrace observed variations of the following pattern of activity relating to an application named ‘PerfectData Software’ within its customer base:

  1. Actor signs in to a Microsoft 365 account from an endpoint associated with a Virtual Private Server (VPS) or Virtual Private Network (VPN) service
  2. Actor registers an application called 'PerfectData Software' with Azure AD, and then grants permissions to the application
  3. Actor accesses mailbox data and creates inbox rule 

In two separate incidents, malicious actors were observed conducting their activities from endpoints associated with VPN services (HideMyAss (HMA) VPN and Surfshark VPN, respectively) and from endpoints within the Autonomous System AS396073 MAJESTIC-HOSTING-01. 

In March 2023, Darktrace observed a malicious actor signing in to a Microsoft 365 account from a Kuwait-based IP address within the Autonomous System, AS198605 AVAST Software s.r.o. This IP address is associated with the VPN service, HMA VPN. Over the next couple of days, an actor (likely the same malicious actor) signed in to the account several more times from two different Nigeria-based endpoints, as well as a VPS-related endpoint and a HMA VPN endpoint. 

During their login sessions, the actor performed a variety of actions. First, they created and assigned permissions to a Service Principal named ‘PerfectData Software’. This Service Principal creation represents the registration of an application called ‘PerfectData Software’ in Azure AD.  Although the reason for registering this application is unclear, within a few days the actor registered and granted permission to another application, ‘Newsletter Software Supermailer’, and created a new inbox rule names ‘s’ on the mailbox of the hijacked account. This inbox rule moved emails meeting certain conditions to a folder named ‘RSS Subscription. The ‘Newsletter Software Supermailer’ application was likely registered by the actor to facilitate mass-mailing activity.

Immediately after these actions, Darktrace detected the actor sending out thousands of malicious emails from the account. The emails included an attachment named ‘Credit Transfer Copy.html’, which contained a suspicious link. Further investigation revealed that the customer’s network had received several fake invoice emails prior to this initial intrusion activity. Additionally, there was an unusually high volume of failed logins to the compromised account around the time of the initial access. 

Figure 1: Advanced Search logs depicting the steps which the actor took after logging in to a user’s Microsoft 365 account.
Figure 1: Advanced Search logs depicting the steps which the actor took after logging in to a user’s Microsoft 365 account.

In a separate case also observed by Darktrace in March 2023, a malicious actor was observed signing in to a Microsoft 365 account from an endpoint within the Autonomous System, AS397086 LAYER-HOST-HOUSTON. The endpoint appears to be related to the VPN service, Surfshark VPN. This login was followed by several failed and successful logins from a VPS-related within the Autonomous System, AS396073 MAJESTIC-HOSTING-01. The actor was then seen registering and assigning permissions to an application called ‘PerfectData Software’. As with the previous example, the motives for this registration are unclear. The actor proceeded to log in several more times from a Surfshark VPN endpoint, however, they were not observed carrying out any further suspicious activity. 

Advanced Search logs depicting the steps which the actor took after logging in to a user’s Microsoft 365 account.
Figure 2: Advanced Search logs depicting the steps which the actor took after logging in to a user’s Microsoft 365 account.

It was not clear in either of these examples, nor in fact any of cases observed by Darktrace, why actors had registered and assigned permissions to an application called ‘PerfectData Software’, and there do not appear to be any open-source intelligence (OSINT) resources or online literature related to the malicious usage of an application by that name. That said, there are several websites which appear to provide email migration and data recovery/backup tools under the moniker ‘PerfectData Software’. 

It is unclear whether the use of ‘PerfectData Software’ by malicious actors observed on the networks of Darktrace customers was one of these tools. However, given the nature of the tools, it is possible that the actors intended to use them to facilitate the exfiltration of email data from compromises mailboxes.

If the legitimate software ‘PerfectData’ is the application in question in these incidents, it is likely being purchased and misused by attackers for malicious purposes. It is also possible the application referenced in the incidents is a spoof of the legitimate ‘PerfectData’ software designed to masquerade a malicious application as legitimate.

Darktrace Coverage

Cases of ‘PerfectData Software’ activity chains detected by Darktrace typically began with an actor signing into an internal user’s Microsoft 365 account from a VPN or VPS-related endpoint. These login events, along with the suspicious email and/or brute-force activity which preceded them, caused the following detection models to breach:

  • SaaS / Access / Unusual External Source for SaaS Credential Use
  • SaaS / Access / Suspicious Login Attempt
  • SaaS / Compromise / Login From Rare Following Suspicious Login Attempt(s)
  • SaaS / Email Nexus / Unusual Location for SaaS and Email Activity

Subsequent activities, including inbox rule creations, registration of applications in Azure AD, and mass-mailing activity, resulted in breaches of the following detection models.

  • SaaS / Admin / OAuth Permission Grant 
  • SaaS / Compromise / Unusual Logic Following OAuth Grant 
  • SaaS / Admin / New Application Service Principal
  • IaaS / Admin / Azure Application Administration Activities
  • SaaS / Compliance / New Email Rule
  • SaaS / Compromise / Unusual Login and New Email Rule
  • SaaS / Email Nexus / Suspicious Internal Exchange Activity
  • SaaS / Email Nexus / Possible Outbound Email Spam
  • SaaS / Compromise / Unusual Login and Outbound Email Spam
  • SaaS / Compromise / Suspicious Login and Suspicious Outbound Email(s)
DETECT Model Breaches highlighting unusual login and 'PerfectData Software' registration activity from a malicious actor
Figure 3: Detection Model Breaches highlighting unusual login and 'PerfectData Software' registration activity from a malicious actor.

In cases where Darktrace's Autonomous Response was enabled in autonomous response mode, ‘PerfectData Software’ activity chains resulted in breaches of the following Darktrace Autonomous Response models:

• Antigena / SaaS / Antigena Suspicious SaaS Activity Block

• Antigena / SaaS / Antigena Significant Compliance Activity Block

In response to these model breaches, Darktrace's Autonomous Response took immediate action, performing aggressive, inhibitive actions, such as forcing the actor to log out of the SaaS platform, and disabling the user entirely. When applied autonomously, these Autonomous Response actions would seriously impede an attacker’s progress and minimize network disruption.

Figure 4: An Autonomous Response model breach created in response to a malicious actor's registration of 'PerfectData Software'

In addition, Darktrace Cyber AI Analyst was able to autonomously investigate registrations of the ‘PerfectData Software’ application and summarized its findings into digestible reports. 

A Cyber AI Analyst Incident Event log
Figure 5: A Cyber AI Analyst Incident Event log showing AI Analyst autonomously pivoting off a breach of 'SaaS / Admin / OAuth Permission Grant' to uncover details of an account hijacking.

Growing threat of account hijackings in the remote workplace 

Due to the widespread adoption of Microsoft 365 services in the workplace and continued emphasis on a remote workforce, account hijackings now pose a more serious threat to organizations around the world than ever before. The cases discussed here illustrate the tendency of malicious actors to conduct their activities from endpoints associated with VPN services, while also registering new applications, like PerfectData Software, with malicious intent. 

While it was unclear exactly why the malicious actors were using ‘PerfectData Software’ as part of their account hijacking, it is clear that either the legitimate or spoofed version of the application is becoming an very likely emergent piece of threat actor tradecraft.

Darktrace's anomaly-based detection allowed it to recognize that the use of ‘PerfectData Software’ represented a deviation in the SaaS user’s expected behavior while Darktrace's Autonomous Response, when enabled in autonomous response mode, was able to quickly take preventative action against threat actors, blocking the potential use of the application for data exfiltration or other nefarious purposes.

[related-resource]

Appendices

MITRE ATT&CK Mapping

Reconnaissance:

T1598 ­– Phishing for Information

Credential Access:

T1110 – Brute Force

Initial Access:

T1078.004 – Valid Accounts: Cloud Accounts

Command and Control:

T1105 ­– Ingress Tool Transfer

Persistence:

T1098.003 – Account Manipulation: Additional Cloud Roles 

Collection:

• T1114 – Email Collection 

Defense Evasion:

• T1564.008 ­– Hide Artifacts: Email Hiding Rules­

Lateral Movement:

T1534 – Internal Spearphishing

Unusual Source IPs

• 5.62.60[.]202  (AS198605 AVAST Software s.r.o.) 

• 160.152.10[.]215 (AS37637 Smile-Nigeria-AS)

• 197.244.250[.]155 (AS37705 TOPNET)

• 169.159.92[.]36  (AS37122 SMILE)

• 45.62.170[.]237 (AS396073 MAJESTIC-HOSTING-01)

• 92.38.180[.]49 (AS202422 G-Core Labs S.A)

• 129.56.36[.]26 (AS327952 AS-NATCOM)

• 92.38.180[.]47 (AS202422 G-Core Labs S.A.)

• 107.179.20[.]214 (AS397086 LAYER-HOST-HOUSTON)

• 45.62.170[.]31 (AS396073 MAJESTIC-HOSTING-01)

References

[1] https://www.investing.com/academy/statistics/microsoft-facts/

[2] https://intel471.com/blog/countering-the-problem-of-credential-theft

[3] https://darktrace.com/blog/business-email-compromise-to-mass-phishing-campaign-attack-analysis

[4] https://darktrace.com/blog/breakdown-of-a-multi-account-compromise-within-office-365

Darktrace's Threat Research Report

This report explores the latest trends shaping the cybersecurity landscape and what defenders need to know in 2025

Inside the SOC
Darktrace cyber analysts are world-class experts in threat intelligence, threat hunting and incident response, and provide 24/7 SOC support to thousands of Darktrace customers around the globe. Inside the SOC is exclusively authored by these experts, providing analysis of cyber incidents and threat trends, based on real-world experience in the field.
Written by
Dariush Onsori
Cyber Security Analyst
Written by
Sam Lister
SOC Analyst

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May 2, 2025

SocGholish: From loader and C2 activity to RansomHub deployment

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Over the past year, a clear pattern has emerged across the threat landscape: ransomware operations are increasingly relying on compartmentalized affiliate models. In these models, initial access brokers (IABs) [6], malware loaders, and post-exploitation operators work together.

Due to those specialization roles, a new generation of loader campaigns has risen. Threat actors increasingly employ loader operators to quietly establish footholds on the target network. These entities then hand off access to ransomware affiliates. One loader that continues to feature prominently in such campaigns is SocGholish.

What is SocGholish?

SocGholish is a loader malware that has been utilized since at least 2017 [7].  It has long been associated with fake browser updates and JavaScript-based delivery methods on infected websites.

Threat actors often target outdated or poorly secured CMS-based websites like WordPress. Through unpatched plugins, or even remote code execution flaws, they inject malicious JavaScript into the site’s HTML, templates or external JS resources [8].  Historically, SocGholish has functioned as a first-stage malware loader, ultimately leading to deployment of Cobalt Strike beacons [9], and further facilitating access persistence to corporate environments. More recently, multiple security vendors have reported that infections involving SocGholish frequently lead to the deployment of RansomHub ransomware [3] [5].

This blog explores multiple instances within Darktrace's customer base where SocGholish deployment led to subsequent network compromises. Investigations revealed indicators of compromise (IoCs) similar to those identified by external security researchers, along with variations in attacker behavior post-deployment. Key innovations in post-compromise activities include credential access tactics targeting authentication mechanisms, particularly through the abuse of legacy protocols like WebDAV and SCF file interactions over SMB.

Initial access and execution

Since January 2025, Darktrace’s Threat Research team observed multiple cases in which threat actors leveraged the SocGholish loader for initial access. Malicious actors commonly deliver SocGholish by compromising legitimate websites by injecting malicious scripts into the HTML of the affected site. When the visitor lands on an infected site, they are typically redirected to a fake browser update page, tricking them into downloading a ZIP file containing a JavaScript-based loader [1] [2]. In one case, a targeted user appears to have visited the compromised website garagebevents[.]com (IP: 35.203.175[.]30), from which around 10 MB of data was downloaded.

Device Event Log showing connections to the compromised website, following by connections to the identified Keitaro TDS instances.
Figure 1: Device Event Log showing connections to the compromised website, following by connections to the identified Keitaro TDS instances.

Within milliseconds of the connection establishment, the user’s device initiated several HTTPS sessions over the destination port 443 to the external endpoint 176.53.147[.]97, linked to the following Keitaro TDS domains:

  • packedbrick[.]com
  • rednosehorse[.]com
  • blackshelter[.]org
  • blacksaltys[.]com

To evade detection, SocGholish uses highly obfuscated code and relies on traffic distribution systems (TDS) [3].  TDS is a tool used in digital and affiliate marketing to manage and distribute incoming web traffic based on predefined rules. More specifically, Keitaro is a premium self-hosted TDS frequently utilized by attackers as a payload repository for malicious scripts following redirects from compromised sites. In the previously noted example, it appears that the device connected to the compromised website, which then retrieved JavaScript code from the aforementioned Keitaro TDS domains. The script served by those instances led to connections to the endpoint virtual.urban-orthodontics[.]com (IP: 185.76.79[.]50), successfully completing SocGholish’s distribution.

Advanced Search showing connections to the compromised website, following by those to the identified Keitaro TDS instances.
Figure 2: Advanced Search showing connections to the compromised website, following by those to the identified Keitaro TDS instances.

Persistence

During some investigations, Darktrace researchers observed compromised devices initiating HTTPS connections to the endpoint files.pythonhosted[.]org (IP: 151.101.1[.]223), suggesting Python package downloads. External researchers have previously noted how attackers use Python-based backdoors to maintain access on compromised endpoints following initial access via SocGholish [5].

Credential access and lateral movement

Credential access – external

Darktrace researchers identified observed some variation in kill chain activities following initial access and foothold establishment. For example, Darktrace detected interesting variations in credential access techniques. In one such case, an affected device attempted to contact the rare external endpoint 161.35.56[.]33 using the Web Distributed Authoring and Versioning (WebDAV) protocol. WebDAV is an extension of the HTTP protocol that allows users to collaboratively edit and manage files on remote web servers. WebDAV enables remote shares to be mounted over HTTP or HTTPS, similar to how SMB operates, but using web-based protocols. Windows supports WebDAV natively, which means a UNC path pointing to an HTTP or HTTPS resource can trigger system-level behavior such as authentication.

In this specific case, the system initiated outbound connections using the ‘Microsoft-WebDAV-MiniRedir/10.0.19045’ user-agent, targeting the URI path of /s on the external endpoint 161.35.56[.]33. During these requests, the host attempted to initiate NTML authentication and even SMB sessions over the web, both of which failed. Despite the session failures, these attempts also indicate a form of forced authentication. Forced authentication exploits a default behavior in Windows where, upon encountering a UNC path, the system will automatically try to authenticate to the resource using NTML – often without any user interaction. Although no files were directly retrieved, the WebDAV server was still likely able to retrieve the user’s NTLM hash during the session establishment requests, which can later be used by the adversary to crack the password offline.

Credential access – internal

In another investigated incident, Darktrace observed a related technique utilized for credential access and lateral movement. This time, the infected host uploaded a file named ‘Thumbs.scf’ to multiple internal SMB network shares. Shell Command File ( SCF) is a legacy Windows file format used primarily for Windows Explorer shortcuts. These files contain instructions for rendering icons or triggering shell commands, and they can be executed implicitly when a user simply opens a folder containing the file – no clicks required.

The ‘Thumbs.scf’ file dropped by the attacker was crafted to exploit this behavior. Its contents included a [Shell] section with the Command=2 directive and an IconFile path pointing to a remote UNC resource on the same external endpoint, 161.35.56[.]33, seen in the previously described case – specifically, ‘\\161.35.56[.]33\share\icon.ico’. When a user on the internal network navigates to the folder containing the SCF file, their system will automatically attempt to load the icon. In doing so, the system issues a request to the specified UNC path, which again prompts Windows to initiate NTML authentication.

This pattern of activity implies that the attacker leveraged passive internal exposure; users who simply browsed a compromised share would unknowingly send their NTML hashes to an external attacker-controlled host. Unlike the WebDAV approach, which required initiating outbound communication from the infected host, this SCF method relies on internal users to interact with poisoned folders.

Figure 3: Contents of the file 'Thumbs.scf' showing the UNC resource hosted on the external endpoint.
Figure 3: Contents of the file 'Thumbs.scf' showing the UNC resource hosted on the external endpoint.

Command-and-control

Following initial compromise, affected devices would then attempt outbound connections using the TLS/SSL protocol over port 443 to different sets of command-and-control (C2) infrastructure associated with SocGholish. The malware frequently uses obfuscated JavaScript loaders to initiate its infection chain, and once dropped, the malware communicates back to its infrastructure over standard web protocols, typically using HTTPS over port 443. However, this set of connections would precede a second set of outbound connections, this time to infrastructure linked to RansomHub affiliates, possibly facilitating the deployed Python-based backdoor.

Connectivity to RansomHub infrastructure relied on defense evasion tactics, such as port-hopping. The idea behind port-hopping is to disguise C2 traffic by avoiding consistent patterns that might be caught by firewalls, and intrusion detection systems. By cycling through ephemeral ports, the malware increases its chances of slipping past basic egress filtering or network monitoring rules that only scrutinize common web traffic ports like 443 or 80. Darktrace analysts identified systems connecting to destination ports such as 2308, 2311, 2313 and more – all on the same destination IP address associated with the RansomHub C2 environment.

Figure 4: Advanced Search connection logs showing connections over destination ports that change rapidly.

Conclusion

Since the beginning of 2025, Darktrace analysts identified a campaign whereby ransomware affiliates leveraged SocGholish to establish network access in victim environments. This activity enabled multiple sets of different post exploitation activity. Credential access played a key role, with affiliates abusing WebDAV and NTML over SMB to trigger authentication attempts. The attackers were also able to plant SCF files internally to expose NTML hashes from users browsing shared folders. These techniques evidently point to deliberate efforts at early lateral movement and foothold expansion before deploying ransomware. As ransomware groups continue to refine their playbooks and work more closely with sophisticated loaders, it becomes critical to track not just who is involved, but how access is being established, expanded, and weaponized.

Credit to Chrisina Kreza (Cyber Analyst) and Adam Potter (Senior Cyber Analyst)

Appendices

Darktrace / NETWORK model alerts

·       Anomalous Connection / SMB Enumeration

·       Anomalous Connection / Multiple Connections to New External TCP Port

·       Anomalous Connection / Multiple Failed Connections to Rare Endpoint

·       Anomalous Connection / New User Agent to IP Without Hostname

·       Compliance / External Windows Communication

·       Compliance / SMB Drive Write

·       Compromise / Large DNS Volume for Suspicious Domain

·       Compromise / Large Number of Suspicious Failed Connections

·       Device / Anonymous NTML Logins

·       Device / External Network Scan

·       Device / New or Uncommon SMB Named Pipe

·       Device / SMB Lateral Movement

·       Device / Suspicious SMB Activity

·       Unusual Activity / Unusual External Activity

·       User / Kerberos Username Brute Force

MITRE ATT&CK mapping

·       Credential Access – T1187 Forced Authentication

·       Credential Access – T1110 Brute Force

·       Command and Control – T1071.001 Web Protocols

·       Command and Control – T1571 Non-Standard Port

·       Discovery – T1083 File and Directory Discovery

·       Discovery – T1018 Remote System Discovery

·       Discovery – T1046 Network Service Discovery

·       Discovery – T1135 Network Share Discovery

·       Execution – T1059.007 JavaScript

·       Lateral Movement – T1021.002 SMB/Windows Admin Shares

·       Resource Deployment – T1608.004 Drive-By Target

List of indicators of compromise (IoCs)

·       garagebevents[.]com – 35.203.175[.]30 – Possibly compromised website

·       packedbrick[.]com – 176.53.147[.]97 – Keitaro TDS Domains used for SocGholish Delivery

·       rednosehorse[.]com – 176.53.147[.]97 – Keitaro TDS Domains used for SocGholish Delivery

·       blackshelter[.]org – 176.53.147[.]97 – Keitaro TDS Domains used for SocGholish Delivery

·       blacksaltys[.]com – 176.53.147[.]97 – Keitaro TDS Domains used for SocGholish Delivery

·       virtual.urban-orthodontics[.]com – 185.76.79[.]50

·       msbdz.crm.bestintownpro[.]com – 166.88.182[.]126 – SocGholish C2

·       185.174.101[.]240 – RansomHub Python C2

·       185.174.101[.]69 – RansomHub Python C2

·       108.181.182[.]143 – RansomHub Python C2

References

[1] https://www.checkpoint.com/cyber-hub/threat-prevention/what-is-malware/socgholish-malware/

[2] https://intel471.com/blog/threat-hunting-case-study-socgholish

[3] https://www.trendmicro.com/en_us/research/25/c/socgholishs-intrusion-techniques-facilitate-distribution-of-rans.html

[4] https://www.proofpoint.com/us/blog/threat-insight/update-fake-updates-two-new-actors-and-new-mac-malware

[5] https://www.guidepointsecurity.com/blog/ransomhub-affiliate-leverage-python-based-backdoor/

[6] https://www.cybereason.com/blog/how-do-initial-access-brokers-enable-ransomware-attacks

[7] https://attack.mitre.org/software/S1124/

[8] https://expel.com/blog/incident-report-spotting-socgholish-wordpress-injection/

[9] https://www.esentire.com/blog/socgholish-to-cobalt-strike-in-10-minutes

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About the author
Christina Kreza
Cyber Analyst

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May 1, 2025

Your Vendors, Your Risk: Rethinking Third-Party Security in the Age of Supply Chain Attacks

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When most people hear the term supply chain attack, they often imagine a simple scenario: one organization is compromised, and that compromise is used as a springboard to attack another. This kind of lateral movement is common, and often the entry vector is as mundane and as dangerous as email.

Take, for instance, a situation where a trusted third-party vendor is breached. An attacker who gains access to their systems can then send malicious emails to your organization, emails that appear to come from a known and reputable source. Because the relationship is trusted, traditional phishing defenses may not be triggered, and recipients may be more inclined to engage with malicious content. From there, the attacker can establish a foothold, move laterally, escalate privileges, and launch a broader campaign.

This is one dimension of a supply chain cyber-attack, and it’s well understood in many security circles. But the risk doesn’t end there. In fact, it goes deeper, and it often hits the most important asset of all: your customers' data.

The risk beyond the inbox

What happens when customer data is shared with a third party for legitimate processing purposes for example billing, analytics, or customer service and that third party is then compromised?

In that case, your customer data is breached, even if your own systems were never touched. That’s the uncomfortable truth about modern cybersecurity: your risk is no longer confined to your own infrastructure. Every entity you share data with becomes an extension of your attack surface. Thus, we should rethink how we perceive responsibility.

It’s tempting to think that securing our environment is our job, and securing their environment is theirs. But if a breach of their environment results in the exposure of our customers, the accountability and reputational damage fall squarely on our shoulders.

The illusion of boundaries

In an era where digital operations are inherently interconnected, the lines of responsibility can blur quickly. Legally and ethically, organizations are still responsible for the data they collect even if that data is processed, stored, or analyzed by a third party. A customer whose data is leaked because of a vendor breach will almost certainly hold the original brand responsible, not the third-party processor they never heard of.

This is particularly important for industries that rely on extensive outsourcing and platform integrations (SaaS platforms, marketing tools, CRMs, analytics platforms, payment processors). The list of third-party vendors with access to customer data grows year over year. Each integration adds convenience, but also risk.

Encryption isn’t a silver bullet

One of the most common safeguards used in these data flows is encryption. Encrypting customer data in transit is a smart and necessary step, but it’s far from enough. Once data reaches the destination system, it typically needs to be decrypted for use. And the moment it is decrypted, it becomes vulnerable to a variety of attacks like ransomware, data exfiltration, privilege escalation, and more.

In other words, the question isn’t just is the data secure in transit? The more important question is how is it protected once it arrives?

A checklist for organizations evaluating third-parties

Given these risks, what should responsible organizations do when they need to share customer data with third parties?

Start by treating third-party security as an extension of your own security program. Here are some foundational controls that can make a difference:

Due diligence before engagement: Evaluate third-party vendors based on their security posture before signing any contracts. What certifications do they hold? What frameworks do they follow? What is their incident response capability?

Contractual security clauses: Build in specific security requirements into vendor contracts. These can include requirements for encryption standards, access control policies, and data handling protocols.

Third-party security assessments: Require vendors to provide evidence of their security controls. Independent audits, penetration test results, and SOC 2 reports can all provide useful insights.

Ongoing monitoring and attestations: Security isn’t static. Make sure vendors provide regular security attestations and reports. Where possible, schedule periodic reviews or audits, especially for vendors handling sensitive data.

Minimization and segmentation: Don’t send more data than necessary. Data minimization limits the exposure in the event of a breach. Segmentation, both within your environment and within vendor access levels, can further reduce risk.

Incident response planning: Ensure you have a playbook for handling third-party incidents, and that vendors do as well. Coordination in the event of a breach should be clear and rapid.

The human factor: Customers and communication

There’s another angle to supply chain cyber-attacks that’s easy to overlook: the post-breach exploitation of public knowledge. When a breach involving customer data hits the news, it doesn’t take long for cybercriminals to jump on the opportunity.

Attackers can craft phishing emails that appear to be follow-ups from the affected organization: “Click here to reset your password,” “Confirm your details due to the breach,” etc.

A breach doesn’t just put customer data at risk it also opens the door to further fraud, identity theft, and financial loss through social engineering. This is why post-breach communication and phishing mitigation strategies are valuable components of an incident response strategy.

Securing what matters most

Ultimately, protecting against supply chain cyber-attacks isn’t just about safeguarding your own perimeter. It’s about defending the integrity of your customers’ data, wherever it goes. When customer data is entrusted to you, the duty of care doesn’t end at your firewall.

Relying on vendors to “do their part” is not enough. True due diligence means verifying, validating, and continuously monitoring those extended attack surfaces. It means designing controls that assume failure is possible, and planning accordingly.

In today’s threat landscape, cybersecurity is no longer just a technical discipline. It’s a trust-building exercise. Your customers expect you to protect their information, and rightly so. And when a supply chain attack happens, whether the breach originated with you or your partner, the damage lands in the same place: your brand, your customers, your responsibility.

[related-resource]

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Tony Jarvis
VP, Field CISO | Darktrace
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