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ASCII smuggling crosses over from AI prompt injection to phishing evasion

Microsoft details high-volume phishing campaign using ASCII smuggling (Unicode tag chars) for filter evasion, peaking at 2.3M messages.

Microsoft researchers observed a high-volume finance-themed phishing campaign using invisible Unicode tag characters (U+E0000–U+E007F), a technique known from AI prompt injection research as ASCII smuggling, to split lure words like 'funding' and evade email filters. Telemetry from Microsoft Defender for Office 365 showed signature hits jump from roughly 21,000 messages on February 8, 2026 to more than 1.3 million on February 9, peaking above 2.3 million on February 11, with elevated weekday activity lasting approximately three months. The discovery emerged from prompt injection protection research, showing AI-era evasion techniques crossing into traditional phishing. Most messages were flagged by layered Defender protections rather than a single Unicode-specific signal.

Microsoft Security Blog · 12d agoPhishing & fraud in the wild

Phishing Campaign Sends Millions of Emails Using Invisible Unicode to Evade Filters

Microsoft warns of a high-volume phishing campaign using invisible Unicode characters to split keywords like 'funding' and evade filters, peaking at 2.37 million daily messages.

Microsoft's Security Research team documented a high-volume phishing operation inserting deprecated Unicode Tags characters (U+E0000-U+E007F) inside financial keywords such as 'funding' so literal-string and regex email filters stop matching them. The campaign ran on a weekly cadence with 1-2.37 million weekday messages between February and May 15, 2026, peaking on February 26, 2026. It used hundreds of disposable finance-themed sender domains and relayed mail through ActiveCampaign's click-tracking infrastructure (acemlnd[.]com, activehosted[.]com), lending legitimate platform reputation. Microsoft ties the activity to an AI-assisted SBA loan phishing campaign that Fortra's FIRE team disclosed in September 2025.

The Hacker News · 11d agoPhishing & fraud in the wild

Treasury urges banks to file cyber scam reports, noting nearly $13 billion in losses since 2023

FinCEN urged banks to report cyber scams after a study found $12.7 billion stolen from US victims of crypto investment scams since 2023.

FinCEN analyzed more than 33,000 cyber fraud incident reports filed by roughly 1,300 financial institutions between September 2023 and December 2025, finding about $12.7 billion in losses to cryptocurrency investment scams across all 50 states. Traditional banks reported about $6.4 billion in suspected scam activity and crypto firms about $5.5 billion. Scam activity is growing, with monthly reports rising nearly 11% as centers expand beyond Myanmar, Cambodia, and Laos. The US later sanctioned Xinbi Guarantee, a Telegram-based marketplace used to launder over $36 billion.

The Record · 5d agoPhishing & fraud 4 sources

$245 million in stolen crypto funded racketeering crew’s lavish lifestyle

Malone Lam pleaded guilty in D.C. federal court to a racketeering conspiracy that stole and laundered over $245 million in cryptocurrency via social engineering.

Malone Lam, a 22-year-old Singapore citizen, pleaded guilty in Washington D.C. federal court to running a racketeering conspiracy that stole and laundered more than $245 million in cryptocurrency. The operation ran from at least October 2023 through May 2025, grew out of online gaming platforms, and relied on social engineering to trick victims into surrendering wallet access, sometimes including break-ins to victims' homes. Lam was arrested on September 18, 2025 in Miami; prosecutors said members spent lavishly on nightclubs, private jets, and exotic cars priced from $100,000 to $3.8 million.

Help Net Security · 6d agoPhishing & fraud

ASCII smuggling isn't just an AI security risk

Microsoft tracked a phishing campaign peaking at 2.37 million daily messages that hid financial-lure keywords with invisible Unicode tag characters to evade filters.

Microsoft researchers uncovered a large phishing campaign that inserted invisible Unicode tag characters (e.g., U+E0020) inside common financial keywords like 'funding', splitting words so keyword, signature, and regex matches fail. The campaign peaked at more than 2.37 million messages in late February 2026, ran from about 150 finance-themed sender domains on a strict weekday-only schedule, and gradually declined to under 20% of peak weekday volume by late March, with residual spikes through mid-June. The technique repurposes ASCII smuggling, normally used for indirect prompt injection against AI assistants, for traditional email phishing evasion. Microsoft advises defenders to strip or fold invisible Unicode code points before content matching and to watch for bulk weekday spikes from churning finance-themed domains.

The Register · Security · 11d agoPhishing & fraud in the wild1