Varonis Exposes Azure App Loophole That Let Attackers Masquerade as Microsoft Services

Security researchers at Varonis have uncovered a subtle yet powerful flaw in Microsoft Azure’s application registration system that allowed malicious actors to create fake apps with names like “Azure Portal,” bypassing long-standing safeguards meant to prevent impersonation of official Microsoft tools.

The loophole—since patched by Microsoft—stemmed from the use of hidden Unicode characters to disguise application names. By inserting invisible “Combining Grapheme Joiner” characters between each letter, attackers could trick Azure’s name validation system and register apps with restricted names that appear indistinguishable from legitimate Microsoft services.

“We initially found one Unicode character that enabled the bypass, and after our disclosure to Microsoft, we discovered another 261,” said the Varonis Threat Labs research team. “Microsoft patched the first vulnerability in April 2025 and the second in October 2025, helping prevent future exploitation.”

A Stealthy Path to Initial Access

The discovery highlights how attackers can exploit Azure applications—software entities that connect with Microsoft 365 and cloud resources—to gain initial access, persistence, or even escalate privileges. These apps can request delegated permissions from users, effectively inheriting their access to sensitive resources such as emails, OneDrive files, and Teams messages.

Varonis researchers focused on two common infiltration methods: illicit consent grants and device code phishing. In both cases, victims are tricked into authorizing rogue applications that appear legitimate—often via links sent through phishing campaigns. Once a user consents, attackers can generate access tokens, bypass passwords, and operate within the victim’s account boundaries.

“Because the fake apps mimic trusted Microsoft names and icons, users are far more likely to grant access without scrutiny,” the researchers noted. Many real Microsoft apps also lack digital verification, further eroding user confidence in the system’s warnings.

When Invisible Code Meets Human Trust

By exploiting non-printable Unicode characters, attackers could construct app names that looked identical to “Azure Portal” or “Microsoft Teams,” but were technically different strings. These fake apps could then be shared through links or phishing emails, displaying deceptive consent pages that carried official branding and even Microsoft icons.

Varonis demonstrated that even seasoned users could be fooled. “Visual inspection alone isn’t enough,” they wrote. “The name appears legitimate in every interface, but behind the scenes, it’s something entirely different.”

Microsoft Responds—and Patches

Microsoft moved quickly to address the vulnerabilities after disclosure, releasing fixes in April and again in October 2025. The company confirmed that all customers are protected by the updates and need not take further action.

Still, the episode underscores how even sophisticated cloud ecosystems can harbor hidden risks. As organizations increasingly depend on Azure and Microsoft 365 for identity and application management, attackers continue probing for weak points in the complex web of permissions and trust relationships that underpin the cloud.

Defensive Measures: Education and Oversight

Varonis recommends several steps to prevent similar attacks:

• Restrict user consent to applications, requiring admin approval for all new app authorizations or limiting consent to verified publishers.

• Enforce least privilege by granting users and applications only the access they require.

• Monitor Azure app behavior for anomalies such as unfamiliar app names, odd access patterns, or requests containing non-ASCII characters.

• Educate users to question consent prompts and verify app legitimacy before approving permissions.

The research serves as a reminder that even invisible characters can introduce visible consequences. As cloud environments grow more interconnected, maintaining vigilance against subtle manipulations of trust is as critical as defending against overt intrusions.

“This case shows that security is never static,” the Varonis team concluded. “Even seemingly simple controls can be subverted in unexpected ways. Staying ahead of attackers requires constant testing, monitoring, and collaboration across the ecosystem.”