Beyond Ransomware: The New Business Model of the LAPSUS$/Scattered Spider Supergroup and How It Threatens Your Boardroom
By CyberDudeBivash • September 27, 2025 • Board-Level Strategic Briefing
For the past five years, the specter of ransomware has dominated boardroom conversations about cyber risk. We have been conditioned to fear the encrypted server and the decryption fee. But while we were building taller walls against ransomware, a new predator emerged with a completely different business model. The threat groups known as **LAPSUS$** and **Scattered Spider** are not just encrypting data; they are hijacking entire corporations. Their targets are not just servers, but your employees, your IT help desk, and your brand's reputation. They have successfully breached some of the largest and most technologically advanced companies in the world, including Microsoft, NVIDIA, Uber, and most recently, MGM Resorts, costing hundreds of millions in damages. This is a strategic briefing for the boardroom. It's time to understand this new business model of cyber extortion and the fundamental changes you must make to your processes to defend your organization.
Disclosure: This is a strategic briefing for senior executives. It contains affiliate links to technologies and training that are foundational to a resilient defense against these modern, human-centric threats. Your support helps fund our independent research.
The Boardroom Defense Stack
Defending against this threat requires investing in process, people, and the right technology.
Chapter 1: The New Face of Cybercrime - Profiling the LAPSUS$/Scattered Spider Supergroup
To understand this threat, leadership must discard the old stereotype of the lone, hooded hacker. LAPSUS$ and Scattered Spider (while potentially distinct, their TTPs are so similar we will discuss them as a "supergroup") represent a new archetype of adversary.
Key Characteristics
- Demographics: They are predominantly young, digital natives—teenagers and young adults who grew up immersed in online culture. This gives them an intuitive understanding of how people and online systems interact.
- Motivation: Their motives are a chaotic mix of financial gain and notoriety. They are not just seeking a quiet payday; they relish the public spectacle of a major breach and actively use social media to taunt their victims, amplifying the reputational damage.
- Core Skill: Social Engineering. Their primary weapon is not a piece of code; it is the telephone and the keyboard. They are masters of deception, manipulation, and impersonation. They are willing to spend hours researching an employee on LinkedIn to find a single piece of information they can use to sound convincing on a call to your help desk.
How They Differ From Traditional Ransomware Gangs
Think of a traditional ransomware group (like Conti or REvil) as a hierarchical, professionalized mafia. They are organized, methodical, and their goal is a quiet, efficient financial transaction.
LAPSUS$/Scattered Spider are more like a chaotic, highly adaptable street gang. They are noisy, brazen, and their attacks often seem improvised and unpredictable. This chaos is a weapon in itself, designed to overwhelm a target's structured, process-driven incident response teams.
Chapter 2: The Attack Playbook - How They Hack Your People, Not Your Perimeter
The genius of the LAPSUS$ playbook is that it completely bypasses the billions of dollars we've spent on firewalls, intrusion detection, and other perimeter security technologies. They simply walk through the front door by stealing the digital identity of a legitimate employee.
Step 1: The SIM Swap - Stealing the Phone Number
The attack often begins with a critical but overlooked vulnerability in the telecommunications ecosystem. The attacker identifies a target employee (often someone with privileged access, like a system administrator or a cloud engineer). They use social engineering to trick the employee's mobile phone provider (e.g., AT&T, Verizon, Vodafone) into transferring the victim's phone number to a new SIM card controlled by the attacker. They now control the employee's phone number.
Step 2: The MFA Bypass - Defeating Weak Authentication
With control of the phone number, the attacker can now intercept any security code or password reset link sent via SMS text message. This immediately defeats the weakest, but still common, form of Multi-Factor Authentication (MFA). They can now initiate a password reset for the employee's corporate accounts.
Even for more modern push-based MFA (like a prompt on your phone), they have a simple but effective attack: **MFA Fatigue**. They repeatedly trigger login attempts, sometimes dozens or hundreds of times, until the frustrated employee accidentally clicks "Approve."
Step 3: Hacking the Help Desk - The Human Exploit
This is their signature move and the single biggest process failure in most large organizations. The attacker, now armed with some basic information about the employee, calls your internal IT Help Desk.
"Hi, this is Bivash from Engineering. I'm traveling and my new phone isn't getting my MFA pushes. I'm locked out and I have an urgent production issue. I need you to reset my password and add my new authenticator app so I can get back in."
A helpful but undertrained and overworked help desk agent, wanting to resolve the "urgent" issue, may bypass standard identity verification procedures. The attacker provides a few convincing details, and the help desk grants them a new password and registers the attacker's own MFA device to the employee's account. **The attacker has now become the employee.**
Step 4: Owning Identity and Living in Your Slack
With full, legitimate access to the corporate account, the attacker's first target is your central identity platform (like Okta or Azure AD) and your primary communication tool (Slack or Microsoft Teams). From here, they can:
- Search Slack/Teams for passwords, API keys, and internal documentation.
- Use the identity platform to see what other applications the employee can access, and pivot to those.
- Impersonate the employee to send messages to other team members to gain even more access.
Chapter 3: 'Beyond Ransomware' - The New Extortion Business Model
Unlike traditional ransomware groups, the LAPSUS$/Scattered Spider endgame is not just about encrypting files. Their business model is a multi-pronged extortion and disruption campaign designed to inflict maximum pain and force a payout.
1. Surgical Data Theft for Extortion
They do not encrypt indiscriminately. They use their access to find and exfiltrate only the most sensitive, most damaging data. This could be:
- Upcoming product source code (as in the Rockstar Games/GTA 6 leak).
- Sensitive customer data.
- The personal emails and messages of the executive leadership team.
The extortion demand is then tied to the non-release of this specific, highly damaging data.
2. Deliberate Operational Disruption
This is a key differentiator. The group actively works to cause operational chaos. As demonstrated in the MGM and Caesars casino breaches, they used their access to lock legitimate employees out of critical operational systems. This included email, property management systems, and even the electronic door locks for hotel rooms.
This forces the company to shut down its operations, creating a massive, immediate financial impact measured in tens of millions of dollars per day. This operational pain is a powerful lever to force a quick ransom payment.
3. Reputational Warfare
LAPSUS$/Scattered Spider are masters of public humiliation. They use their internal access to post taunts and leak data on the company's own public-facing social media accounts or internal Slack channels. They actively engage with journalists and security researchers.
This creates a media firestorm, destroys customer trust, and puts the board and leadership team under immense public pressure. It turns a security incident into a full-blown PR crisis.
Chapter 4: The Boardroom Defense Plan - 4 Steps to Harden Your Human Processes
Defending against this threat requires a fundamental shift in focus from technology to people and process. Your firewall cannot stop a social engineering attack against your help desk. Here are the four critical, board-level initiatives you must sponsor.
- Ban Weak, Phishable MFA. Mandate Hardware Keys.
- The Problem: SMS and simple push-based MFA are proven to be vulnerable to SIM swapping and MFA fatigue.
- The Action: Your new corporate standard must be **phishing-resistant MFA**. This means using a standard like FIDO2, which is embodied in hardware security keys. You must mandate the use of tools like YubiKeys for all employees, starting with your privileged users (admins, cloud engineers) and executive team. This single technical control makes the most common LAPSUS$ entry vectors obsolete.
- Armor Your IT Help Desk. It is a Tier 1 Security Control.
- The Problem: Your help desk is likely staffed by junior personnel, focused on customer service and speed-to-resolution, not rigorous security verification.
- The Action: You must implement a **mandatory, non-skippable, and rigorous identity verification process** for any remote, high-risk request like a password reset or MFA device change. This may involve a live video call where the employee must show a government-issued ID, or a callback to a pre-registered phone number on file with HR. This process change is the single most important defense against this threat.
- Treat Your Identity Platform as a Crown Jewel Asset.
- The Problem: Your identity provider (Okta, Azure AD, etc.) is the new network perimeter. A compromise there is a compromise of everything.
- The Action: Apply the highest level of security controls to your identity platform. This includes extremely limited administrative access, the strongest possible MFA for admins, and continuous monitoring of all administrative activity with high-fidelity alerting. Ensure you have a powerful EDR solution like Kaspersky EDR on the servers that support your identity infrastructure.
- Invest in Cross-Functional Training and Drills.
- The Problem: Your HR, IT Help Desk, and Security teams operate in silos.
- The Action: Create a mandatory training program, developed with a partner like Edureka, that teaches your help desk and HR teams about these specific social engineering threats. Then, run regular, unannounced drills. Have your security team perform a red team exercise where they call the help desk and attempt to social engineer them. Test your human firewall.
Chapter 5: Extended FAQ for the C-Suite
Q: This sounds like a problem with the mobile carriers and the help desk. Why is this a board-level issue?
A: Because the business impact is board-level. The MGM breach is estimated to have cost over $100 million in the third quarter alone. This attack vector leads to operational shutdowns, massive reputational damage, and direct, material financial harm. The board is responsible for overseeing enterprise risk, and this is now one of the most significant and probable risks facing any large organization.
Q: How do we balance these strict new security processes with the need for employee productivity? A video call for a password reset sounds slow.
A: The balance has to shift. The "friction" of a 5-minute identity verification call is insignificant compared to the friction of a week-long, company-wide operational shutdown. The goal is to apply this high level of friction only to high-risk, remote requests. For an employee in the office, the process can be much simpler. This is a risk-based approach.
Q: We have cyber insurance. Won't that cover us?
A: Cyber insurance is a critical part of risk transfer, but it is not a substitute for defense. Insurers are increasingly denying claims for companies that have not implemented "reasonable" security controls. In the current environment, not having strong, phishing-resistant MFA for privileged users and not having a rigorous identity verification process for your help desk could be viewed as a failure to meet that standard of care. Furthermore, insurance cannot recover lost customer trust or stolen intellectual property.
Q: Who should own this risk and lead the implementation of the defense plan?
A: The CISO should lead the technical and security process implementation. However, the Head of IT (CIO/CTO) must be a full partner in re-architecting the help desk processes. Crucially, the Chief People Officer (CPO) or Head of HR must also be a key stakeholder, as this involves employee communication, training, and identity verification policies that fall under their remit. This requires a cross-functional executive task force with direct sponsorship from the CEO or COO.
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