Nearest Neighbor Attack: Russian Hackers Breach US Company via WiFi

Russian state-sponsored hacking group APT28—also known as Fancy Bear, Forest Blizzard, or Sofacy - used an innovative technique called the "nearest neighbor attack" to compromise a U.S. company’s enterprise WiFi network from thousands of miles away. This breach highlights a growing threat to corporate WiFi security.

Here's how the nearest neighbor attack unfolded.

APT28 targeted the company by first compromising an organization in a nearby building within the WiFi range of the victim. This lateral movement allowed them to exploit vulnerabilities without needing physical proximity to the target.

The attack came to light on February 4, 2022, when cybersecurity firm Volexity detected suspicious activity at a Washington, D.C., organization involved in Ukraine-related work. Volexity tracks APT28 under the alias "GruesomeLarch."

1. Initial Access via Password-Spraying
   

   The hackers gained credentials to the victim’s enterprise WiFi through password-spraying attacks against public-facing services. Multi-factor authentication (MFA) thwarted their attempts to exploit these credentials over the public internet, but connecting through the enterprise WiFi didn’t require MFA.

2. Pivoting Through Nearby Networks
   

   To solve the challenge of distance, the hackers compromised a neighboring organization’s network. They sought dual-homed devices (e.g., laptops or routers) that connected both to the compromised wired network and the target’s WiFi.
   

3. Daisy-Chaining Connections
   

   Using valid access credentials, APT28 breached multiple organizations in a daisy-chain attack. Eventually, they identified a device in range of the target's wireless access points, located near the victim’s conference room.
   

4. Exploitation and Data Exfiltration
   

   The attackers used Remote Desktop Protocol (RDP) from an unprivileged account to laterally navigate the target network. They ran a batch file, servtask.bat, to dump Windows registry hives (SAM, Security, and System), compressing them into a ZIP archive for exfiltration. Native Windows tools were employed to maintain a low operational footprint.

APT28, operating under Russia’s GRU military intelligence unit (26165), has been conducting cyber operations since at least 2004. Their latest method showcases a creative workaround to proximity limitations traditionally associated with close-access operations, such as those requiring physical presence in a parking lot near the target.

Volexity’s investigation revealed that APT28 targeted organizations and individuals with expertise in Ukraine. The hackers’ ability to execute a complex, multi-step attack remotely demonstrates a significant evolution in threat tactics.

Despite initial difficulties in attribution, a Microsoft report released in April 2024 identified overlaps in indicators of compromise (IoCs) that confirmed APT28's involvement. The report also revealed that the group likely exploited a zero-day vulnerability, CVE-2022-38028, in the Windows Print Spooler service to escalate privileges before running critical payloads.

APT28’s "nearest neighbor attack" underscores the importance of treating enterprise WiFi networks with the same level of security as internet-facing systems. While protections like MFA have significantly enhanced remote access security, organizations must address vulnerabilities in WiFi networks to prevent similar breaches.

This incident serves as a reminder that sophisticated threat actors can innovate around traditional defenses, making proactive security measures essential.