Token Protection in Microsoft Entra ID: A Game-Changer for Business Email Compromise Defence

As cybersecurity investigators well know, Business Email Compromise (BEC) attacks have evolved far beyond simple phishing schemes. Today's sophisticated threat actors have mastered the art of token theft and manipulation, allowing them to maintain persistent access to victim systems even after passwords have been changed. This presents a significant challenge for organisations and investigators alike until now.

Microsoft's new Token Protection feature in Entra ID Conditional Access represents a major breakthrough in defending against these advanced attack techniques. Let's explore how this technology works and why it's crucial for your organisation's security posture.

The Token Theft Problem

In traditional BEC investigations, we frequently encounter scenarios where cybercriminals have gained initial access through credential compromise but continue to operate within victim environments long after the breach has been detected and passwords reset. How is this possible? The answer lies in authentication tokens.

When users authenticate to cloud services, their devices receive tokens that serve as digital keys for accessing resources. These tokens, particularly Primary Refresh Tokens (PRTs), can remain valid for extended periods. If an attacker successfully steals these tokens through malware, session hijacking, or other means, they can impersonate legitimate users without needing their actual credentials.

This creates a persistent threat that's difficult to detect and even harder to remediate. Traditional security measures like password resets become ineffective against attackers who already possess valid authentication tokens.

How Token Protection Works

Token protection creates a cryptographically secure tie between the token and the device (client secret) it's issued to. Without the client secret, the bound token is useless. This represents a fundamental shift in how authentication tokens function.

The technology leverages the trusted relationship between registered devices and Microsoft Entra ID. When a user registers a Windows 10 or newer device in Microsoft Entra ID, their primary identity is bound to the device. This binding creates a cryptographic connection that makes stolen tokens virtually useless to attackers operating from different devices.

Here's how it protects against token theft:

Device Binding: Tokens become cryptographically tied to specific registered devices, making them unusable if stolen and replayed from unauthorised systems.

Session Validation: Each authentication request validates not only the token but also verifies it's being used from the intended device.

Immediate Protection: Unlike password resets, which can take time to propagate, token protection is effective immediately upon policy enforcement.

Current Capabilities and Limitations

Token protection is currently in public preview and supports specific applications and device configurations:

Supported Applications:

• Office 365 Exchange Online
• Office 365 SharePoint Online

If you deployed Windows App in your environment, include:

1. Azure Virtual Desktop
2. Windows 365
3. Windows Cloud Login

Notable Limitations:

Organisations should be aware of current limitations, including lack of support for Office perpetual clients, certain PowerShell modules accessing SharePoint, and specific device deployment scenarios like Surface Hub and Windows Teams Rooms systems.

Warning:

Your Conditional Access policy should only be configured for these applications. Selecting the Office 365 application group might result in unintended failures. This change is an exception to the general rule that the Office 365 application group should be selected in a Conditional Access policy.

Implementation Strategy for Security Teams

For organisations looking to implement token protection, Microsoft recommends a phased approach:

Phase 1: Assessment

Start with report-only mode to analyse your environment's compatibility without impacting users. This allows you to identify potential issues before enforcement.

Phase 2: Pilot Testing

Begin with a small group of users, particularly those in privileged roles who are high-value targets for BEC attacks. These users often have access to sensitive systems and data that attackers covet.

Phase 3: Gradual Rollout

Expand coverage systematically while monitoring sign-in logs for any compatibility issues or user disruptions.

Monitoring and Forensics

Token protection provides valuable forensic capabilities through enhanced logging. Investigators can now examine sign-in logs to determine:

• Whether authentication requests used bound or unbound protocols
• Specific reasons why token binding failed
• Device registration status and compatibility issues

The logs include detailed status codes that help identify the root cause of token protection failures, from unsupported device types to missing device registration requirements.

Impact on BEC Investigations

From an investigative perspective, token protection fundamentally changes the threat landscape:

Reduced Attack Surface: Stolen tokens become significantly less valuable to attackers, reducing the incentive for token-based attacks.

Enhanced Detection: Token protection failures can serve as early indicators of attempted token replay attacks.

Simplified Remediation: Organisations can have greater confidence that password resets and user re-authentication will effectively terminate unauthorised access.

Improved Attribution: Device binding makes it easier to identify the source of legitimate versus malicious authentication attempts.

Futher Considerations

While token protection represents a significant advancement, organisations should view it as part of a comprehensive security strategy rather than a silver bullet. It works best when combined with:

• Multi-factor authentication requirements
• Device compliance policies
• Regular security awareness training
• Behavioural based email security controls beyond M365 (such as Abnormal)
• Comprehensive monitoring and incident response capabilities

Conclusion

Token protection in Microsoft Entra ID addresses a critical gap in defending against sophisticated BEC attacks. By cryptographically binding authentication tokens to trusted devices, it significantly reduces the value of stolen tokens to attackers.

For organisations that have experienced BEC incidents or want to strengthen their defences against these evolving threats, implementing token protection should be a priority. While the feature is currently in preview with some limitations, its potential to disrupt token-based attack chains makes it an essential tool in the modern cybersecurity arsenal.

The days of attackers maintaining persistent access through stolen tokens are numbered. With proper implementation and monitoring, token protection can help organisations finally close this critical security gap and restore confidence in their authentication infrastructure.

Note: Token protection requires Microsoft Entra ID P1 licenses and is currently available in public preview. Organisations should thoroughly test compatibility in their specific environments before full deployment.