The Hidden Hand: A Secure Corp Security Investigation

Incident ID: SC-IAM-03

Date: 15.03.2025

Investigating Team: Secure Corp Cloud Security Division

Reported By: Alex (Security Analyst)

“”Security analyst Alex reclined back in his chair and gazed at the most recent audit logs as the sun sank over Secure Corp's headquarters. He and his team had been looking at minor irregularities in the business's Azure environment for weeks, including weird API calls, mysterious permission changes, and an unsettling feeling that something was hiding in plain sight.

“Alex, you need to see this,” said Sarah, the lead cloud security engineer, sliding her laptop over.

She discovered something unsettling while examining service principal permissions throughout Secure Corp's Azure system. Originally intended for particular automated activities, a number of service principals had permissions that were far too broad.””

Incident Summary

The security team discovered a privilege escalation risk as a result of misconfigured service principals during a routine Azure IAM audit. The least privilege rules had been broken by giving these service principals excessively broad permissions. This misconfiguration might provide lateral movement, role modification, and unauthorized access throughout Secure Corp's cloud infrastructure if it is taken advantage of.

Technical Findings

1. Service Principal Misconfigurations Identified

A deep analysis of Azure AD and RBAC configurations revealed the following:

SP_CICD_Automation

• Assigned Role: Owner on Resource Group Prod-RG
• Risk: Can modify/delete all resources within the production environment, including Azure Key Vault, VMs, and Storage Accounts.

SP_DeploymentAgent

• Assigned Role: Contributor at Subscription Scope
• Risk: Can modify infrastructure and deploy unauthorized workloads across Secure Corp’s entire cloud environment.

SP_AuditLogger

• Assigned Role: Directory.ReadWrite.All (Microsoft Graph API)
• Risk: Allows modification of user roles, application registrations, and service principals. A compromised token could enable an attacker to create backdoor admin accounts.

2. Exploitation Path & Privilege Escalation Risks

The identified misconfigurations provide multiple paths for privilege escalation:

(A) Token Compromise & Service Principal Takeover

If an attacker gains access to a compromised token for one of these service principals:

• They can use az login --service-principal to authenticate as the service principal.
• With Owner privileges, they can modify IAM roles and assign themselves elevated permissions.
• With Directory.ReadWrite.All, they can manipulate Azure AD users and roles.

(B) Chained Privilege Escalation via Role Inheritance

• SP_DeploymentAgent had Contributor at the subscription level, allowing role assignments within lower-scoped resource groups.
• If an attacker compromised this service principal, they could grant another service principal higher privileges, leading to lateral movement.

(C) Key Vault Secrets Exposure

• Since SP_CICD_Automation had Owner permissions on Prod-RG, it could retrieve secrets from Azure Key Vault (GetSecret permission is inherited by default).
• A compromised key could allow unauthorized access to VMs, databases, and storage accounts.

Root Cause Analysis

• Granting excessive permissions without applying the least privilege principle.
• Inadequate RBAC boundary enforcement, which results in accidental privilege transfer.
• lack of monitoring for role assignments and modifications to the service principle.
• Deployment scripts store service principal credentials in plaintext.

Mitigation & Remediation Steps

Immediate Revocation of Excessive Permissions

• Downgraded SP_CICD_Automation to Contributor on Prod-RG.
• Restricted SP_DeploymentAgent to Resource Group scope instead of Subscription scope.
• Removed Directory.ReadWrite.All from SP_AuditLogger.

Azure AD Conditional Access Policy Enforcement

• Blocked interactive logins for service principals.
• Enforced Managed Identity over service principal authentication where possible.

Detection & Monitoring Implementation

• Enabled Azure AD Sign-In Logs & Privileged Identity Management (PIM) for service principals.
• Created a Sentinel detection rule for unusual service principal authentication events.
• Configured Azure Policy to restrict Owner role assignments for non-human identities.

Periodic Access Reviews

• Implemented quarterly IAM audits for service principals and privileged accounts.
• Enforced Just-In-Time (JIT) access for high-privilege service principals.

Next Steps & Long-Term Fixes

• Transitioning to Managed Identities: Replacing service principals where feasible.
• Automated Role Assignment Monitoring: Implementing an Azure Function to alert on excessive permissions.
• Threat Hunting for Potential Exploitation: Reviewing logs for any suspicious activity before mitigation.

Current Status: Mitigation in Progress

Assigned Team: Secure Corp Cloud Security Division

Challenge Reference

This investigation aligns with Azure-IAM-03: Investigating Service Principals Permission Paradox [Here], where misconfigured service principals lead to security risks and privilege escalation.

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