A Russian state-sponsored hacking group, GruesomeLarch (also known as APT28 or Fancy Bear), has developed a sophisticated method called the “Nearest Neighbor Attack.” This technique allows hackers to remotely infiltrate organizations by exploiting the Wi-Fi networks of nearby businesses, without needing malware or physical presence.

How the Attack Worked

The attack was discovered in February 2022, just before Russia’s invasion of Ukraine, by cybersecurity firm Volexity. Hackers used this method to breach an unnamed organization, referred to as “Organization A,” which had projects related to Ukraine. The key steps included:

1. Password Spraying: Hackers obtained user credentials by targeting Organization A’s public-facing services with password spray attacks.
2. Wi-Fi Exploitation: When multi-factor authentication (MFA) blocked access to internet-facing services, the attackers targeted Organization A’s Enterprise Wi-Fi network, which only required a username and password.
3. Daisy-Chaining: Hackers compromised nearby buildings’ systems to bridge connections to Organization A’s Wi-Fi. They exploited dual-homed devices that connected both to wired and wireless networks.
4. Lateral Movement: Once inside, they used built-in Windows tools (living-off-the-land techniques) to move through the network without raising alarms.

Key Findings

• Hackers breached multiple nearby organizations to gain access to Organization A. For example, a system in “Organization B” across the street and another in “Organization C” were used as stepping stones.
• They exploited Organization A’s Guest Wi-Fi network, which was poorly isolated from the main corporate network, to regain access and retrieve sensitive data.
• Hackers used anti-forensic tools, like Windows Cipher.exe, to hide their activities and make file recovery difficult.

Lessons and Recommendations

This incident emphasizes the growing threat of sophisticated cyberattacks that blend local proximity with remote capabilities. To strengthen defenses, organizations should:

• Require multi-factor authentication (MFA) for Wi-Fi access.
• Segregate Wi-Fi and Ethernet networks to limit cross-network exploitation.
• Monitor for unusual use of built-in Windows utilities.

The Nearest Neighbor Attack underscores the need for vigilant Wi-Fi security, as attackers increasingly target overlooked vulnerabilities in nearby systems and networks.