Microsoft and authentication services provider Okta said they are investigating claims of a potential breach alleged by the LAPSUS$ extortionist gang.

The development, which was first reported by Vice and Reuters, comes after the cyber criminal group posted screenshots and source code of what it said were the companies' internal projects and systems on its Telegram channel.

The leaked 37GB archive shows that the group may have accessed the repositories related to Microsoft's Bing, Bing Maps, and Cortana, with the images highlighting Okta's Atlassian suite and in-house Slack channels.

"For a service that powers authentication systems to many of the largest corporations (and FEDRAMP approved) I think these security measures are pretty poor," the group wrote on Telegram.

On top of this, the group alleged that it breached LG Electronics (LGE) for the "second time" in a year.

Bill Demirkapi, a security researcher at Zoom, noted that "LAPSUS$ appears to have gotten access to the Cloudflare tenant with the ability to reset employee passwords," adding the company "failed to publicly acknowledge any breach for at least two months."

LAPSUS$ has since clarified that it did not breach Okta's databases and that "our focus was ONLY on Okta customers." This could pose serious implications for other government agencies and companies that rely on Okta to authenticate user access to internal systems.

"In late January 2022, Okta detected an attempt to compromise the account of a third-party customer support engineer working for one of our subprocessors. The matter was investigated and contained by the subprocessor," Okta CEO Todd McKinnon said in a tweet.

"We believe the screenshots shared online are connected to this January event. Based on our investigation to date, there is no evidence of ongoing malicious activity beyond the activity detected in January," McKinnon added.

Cloudflare, in response, said it's resetting the Okta credentials of employees who have changed their passwords in the last four months, out of abundance of caution.

Unlike traditional ransomware groups that follow the double extortion playbook of stealing data from a victim and then encrypting that information in return for a payment, the new entrant to the threat landscape focuses more on data theft and using it to blackmail the targets.

In the months since it went active in late December 2021, the cybercrime gang has racked up a long list of high-profile victims, including Impresa, NVIDIA, Samsung, Mercado Libre, Vodafone, and most recently Ubisoft.

"Any successful attack against a service provider or software developer can have further impact beyond the scope of that initial attack," Mike DeNapoli, lead security architect of Cymulate, said in a statement. "Users of the services and platforms must be alerted to the fact that there are possible supply-chain attacks that will need to be defended against."