CVE-2024-35261 is a vulnerability identified in the Microsoft Azure Network Watcher VM Extension, specifically version 1.4.3320.1. The root cause is improper link resolution before file access, categorized under CWE-59 ('Link Following'). This flaw allows an attacker with limited local privileges to exploit symbolic link or hard link manipulation to gain elevated privileges on the affected virtual machine. The vulnerability enables escalation from a low-privilege user to higher privileges, potentially SYSTEM or root level, thereby compromising the confidentiality, integrity, and availability of the VM. The CVSS 3.1 base score is 7.8, indicating high severity, with attack vector local (AV:L), low attack complexity (AC:L), and privileges required being low (PR:L). No user interaction is needed (UI:N), and the scope is unchanged (S:U). The impact on confidentiality, integrity, and availability is high (C:H/I:H/A:H). Although no exploits are currently known in the wild, the vulnerability poses a significant risk due to the critical role of the Azure Network Watcher VM Extension in monitoring and managing cloud VM environments. The improper link resolution can be exploited by creating malicious symbolic links that redirect file operations to unintended locations, allowing unauthorized file access or modification. This can lead to privilege escalation and full system compromise. The vulnerability was reserved in May 2024 and published in July 2024. Mitigation currently relies on patching once Microsoft releases an update and enforcing strict access controls on VM extensions and local users. Monitoring for unusual file system activity related to link manipulation is also recommended.

For European organizations, this vulnerability poses a significant threat to cloud infrastructure security, particularly those relying on Microsoft Azure for virtual machine deployment and monitoring. Successful exploitation could lead to unauthorized access to sensitive data, disruption of critical services, and potential lateral movement within cloud environments. The elevation of privilege could allow attackers to disable security controls, manipulate monitoring data, or deploy further malicious payloads, severely impacting business continuity and data protection compliance. Given the widespread adoption of Azure in Europe, especially among financial institutions, healthcare providers, and government agencies, the risk is amplified. The vulnerability could also undermine trust in cloud service providers and complicate regulatory compliance with GDPR and other data protection laws if data breaches occur. Additionally, the local attack vector means that insider threats or compromised accounts with limited privileges could leverage this flaw to escalate privileges, increasing the attack surface within organizations.

Organizations should immediately inventory their Azure Network Watcher VM Extension versions and identify any instances running version 1.4.3320.1. Until a patch is released, restrict local user permissions to the minimum necessary, especially limiting the ability to create or manipulate symbolic links within VM environments. Implement strict role-based access control (RBAC) policies to prevent unauthorized users from accessing or modifying VM extensions. Enable enhanced monitoring and alerting for suspicious file system activities, particularly those involving link creation or modification. Use Azure Security Center and other cloud security posture management tools to detect anomalous behaviors related to VM extensions. Once Microsoft releases a patch, prioritize its deployment across all affected systems. Additionally, conduct regular security audits and penetration testing focused on privilege escalation vectors within cloud VMs. Educate administrators and users about the risks of local privilege escalation and enforce multi-factor authentication to reduce the risk of initial compromise.