China has called the US government ‘the world’s largest hacking empire’ in response to a Microsoft report accusing Chinese state-sponsored hackers of snooping on US government emails.

In a blog post published on Tuesday, Microsoft said the hacker group dubbed ‘Storm-0558’ gained access to email accounts linked to 25 organisations, including western European government agencies and at least two US government agencies.

The US State and Commerce Departments said in statements that they were among the affected agencies.

‘We assess this adversary is focused on espionage, such as gaining access to email systems for intelligence collection,’ said Microsoft’s executive vice president of security Charlie Bell, in a separate post.

The email accounts of US Secretary of Commerce Gina Raimondo and Department of State officials were also hacked, according to reports from The Washington Post, citing US officials familiar with the matter.

Microsoft said in a statement that the hacking group forged digital authentication tokens to access webmail accounts running on the firm’s Outlook service starting in May.

‘As with any observed nation-state actor activity, Microsoft has contacted all targeted or compromised organizations directly via their tenant admins and provided them with important information to help them investigate and respond,’ said the company.

The Chinese embassy in London dismissed the accusation as ‘disinformation’.

‘No matter which agency issued this information, it will never change the fact that the United States is the world’s largest hacker empire conducting the most cyber theft,’ said Chinese foreign ministry spokesman Wang Wenbin in a routine briefing.

‘Since last year, the cybersecurity organisations of China and other countries have issued many reports exposing the cyber attacks on China by the US government over a long period of time, but the US has not made a response so far.’

Private sector cybersecurity experts have said newly discovered hacking activity shows how Chinese groups are improving their cyber capabilities.

‘Storm-0558, speculated to be a state sponsored actor, is also known to use custom malware such as Cigril and Bling for the purpose of espionage,’ said Shobhit Gautam, solutions architect, at cybersecurity firm HackerOne.

He added that the US and UK governments have been quick to harness human intelligence to secure their defences.

‘The US DoD, UK’s NCSC, and UK MoD are already working with ethical hackers, with the US DoD having fixed over 45,000 vulnerabilities as a result.’

US National Security Adviser Jake Sullivan, who is at the Nato summit in Vilnius, Lithuania, with US President Joe Biden, told ABC’s Good Morning America programme that the investigation is continuing.

‘We detected it fairly rapidly and we were able to prevent further breaches,’ he said adding that the matter was ‘still being investigated’.

Earlier this year, Microsoft spotted another Chinese state-sponsored hacker group targeting critical infrastructure organisations in the United States.

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