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A Major Data Breach Shakes Rackspace
The notorious CL0P ransomware gang has once again made headlines, this time targeting Rackspace Technology, a major U.S.-based cloud storage provider. On March 11, 2025, the cybercriminal group began leaking sensitive company data on its dark web site, allegedly as retaliation for Rackspace’s refusal to engage in ransom negotiations.
This attack is part of CL0P’s broader hacking campaign, which has exploited vulnerabilities in Cleo file transfer software, affecting over 170 organizations globally. The breach underscores the ever-present risks faced by cloud service providers and raises concerns about cross-border data exposure given Rackspace’s international infrastructure.
Inside the Attack: How CL0P Struck Rackspace
- Exploited Zero-Day Vulnerabilities: CL0P allegedly took advantage of weaknesses in Cleo’s Harmony, VLTrader, and LexiCom platforms—widely used for enterprise data transfers.
- Long-Term Infiltration: Investigations trace the initial breach back to October 2024, when Google’s Mandiant researchers discovered backdoors planted in victim systems.
- Pattern of Attacks: CL0P has a history of targeting file transfer software, including the MOVEit and Fortra GoAnywhere breaches in 2023, which impacted 90 million individuals and reportedly netted the gang $100 million.
While Rackspace has yet to verify the authenticity of the leaked data, Cybernews confirmed its presence on CL0P’s .onion site but couldn’t determine the full extent of exposure.
Rackspace’s History of Cybersecurity Struggles
This isn’t the first time Rackspace has suffered a major ransomware attack. In December 2022, the company was targeted by the Play ransomware group, which exploited a Microsoft Exchange flaw (CVE-2022-41080) to exfiltrate sensitive email data from 27 customers.
At that time, Rackspace hesitated to apply security patches, fearing system disruptions—a decision heavily criticized by cybersecurity experts. The company eventually migrated its Hosted Exchange customers to Microsoft 365 as a precautionary measure.
This latest breach suggests that Rackspace may still be struggling with timely vulnerability management, raising fresh concerns about the security of its cloud infrastructure.
CL0P’s Larger Cybercrime Campaign
The Rackspace attack aligns with CL0P’s recent spree targeting organizations using Cleo software. Other high-profile victims include:
– Western Alliance Bank
– Hertz
– Chicago Public Schools
– Home Depot Mexico
– SDI Technologies (Timex parent company)
CL0P’s double-extortion tactics—where data is both encrypted and threatened with public leaks—continue to pressure victims into paying hefty ransoms. However, Rackspace has yet to confirm if it negotiated with the hackers or plans to meet any ransom demands.
Key Cybersecurity Risks and Mitigation Strategies
The Rackspace breach highlights several critical cybersecurity threats:
- Supply Chain Vulnerabilities – Attacks on third-party software vendors like Cleo can have a cascading effect, impacting hundreds of companies.
- Ransomware Evolution – CL0P and similar groups are refining their methods, using SQL injection and remote code execution (RCE) vulnerabilities to infiltrate networks.
- Phishing and Follow-Up Scams – After major breaches, attackers often impersonate IT support to deceive victims into providing further credentials. Rackspace has warned customers to stay vigilant.
What Companies Should Do Now
Cybersecurity experts are urging organizations—especially those using Cleo or MOVEit—to:
✅ Audit software configurations and apply patches immediately.
✅ Implement zero-trust access controls to limit unauthorized access.
✅ Regularly test incident response plans to ensure swift reaction to future breaches.
✅ Monitor for credential leaks and enforce strict password policies.
With lawsuits still pending from the 2022 Play ransomware incident, Rackspace’s handling of this latest breach will be under heavy scrutiny in the coming months.
What Undercode Says:
The CL0P ransomware attack on Rackspace is more than just another cybercrime headline—it’s a warning shot for cloud service providers and enterprises worldwide.
1. Cloud Providers Are Prime Targets
As businesses migrate to cloud services, ransomware groups view these providers as high-value targets. Rackspace, serving 600,000 clients globally, offers an attractive attack surface.
This raises an important question: Are cloud providers investing enough in cybersecurity to match the scale of their operations?
- Delayed Patching is a Disaster Waiting to Happen
One of the biggest takeaways from this breach is the danger of delayed patching. Rackspace previously hesitated to patch Microsoft Exchange vulnerabilities in 2022—and got burned for it.
This time, it was Cleo’s unpatched file transfer vulnerabilities that opened the door for CL0P. Organizations must prioritize timely updates, or they’ll keep repeating the same mistakes.
3. Ransomware Gangs are Evolving Faster Than Defenses
CL0P isn’t just encrypting and leaking data anymore—it’s systematically exploiting software supply chains to maximize damage. The MOVEit and Cleo breaches show a shift towards targeting widely-used enterprise tools.
Companies relying on third-party software must implement stricter vendor security assessments and be proactive in applying patches—not just reactive after a breach.
4. Legal and Financial Fallout Will Be Severe
With lawsuits still ongoing from the 2022 Play ransomware attack, Rackspace now faces even greater legal exposure. If customer data is found among the leaked files, class-action lawsuits could cripple the company’s financial standing.
This should serve as a wake-up call for businesses storing sensitive data on third-party cloud platforms. Due diligence shouldn’t stop at selecting a provider—it must extend to ensuring they adhere to rigorous security standards.
- Cyber Insurance Won’t Save You from Reputation Damage
Many companies rely on cyber insurance to cushion financial losses after a breach. But insurance can’t repair the reputational damage that follows a high-profile ransomware attack.
For Rackspace, this means customer trust is on the line. If businesses feel their data isn’t safe, they’ll migrate elsewhere—a financial hit much worse than a one-time ransom payout.
In the end, cybersecurity isn’t just about defense—it’s about survival. Companies must invest in resilience, or they’ll find themselves on the dark web’s list of victims next.
Fact Checker Results
✔ Confirmed: CL0P has begun leaking data allegedly stolen
References:
Reported By: https://cyberpress.org/cl0p-ransomware-attack-2/
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