Windows 11 24H2/25H2 | Server 2025 - Recovery Media Restore Fails with: The Local Security Authority cannot be contacted

When attempting to perform a restore using the Veeam Recovery Media, the restore fails while establishing the connection to the local VeeamAgent.exe process, and the following error occurs:

The Local Security Authority cannot be contacted

Because the failure occurs before a recovery operation can begin, it prevents restoring from any backup location, including local storage, a network shared folder or Veeam backup repository, and cloud repositories.

This issue occurs due to a regression introduced by the Microsoft June 2026 security update for Windows 11 and Windows Server 2025. The update changed the behavior of the Windows security subsystem (Local Security Authority and Schannel) within the Windows Recovery Environment (WinRE), on which the Veeam Recovery Media is based. As a result, the TLS handshake that secures the connection between the restore wizard and the local VeeamAgent.exe process cannot be completed.

This behavior has been confirmed with the following Microsoft Windows updates for Windows 11 (versions 24H2 and 25H2) and Windows Server 2025, and any later updates:

• KB5094126 (OS builds 26100.8655 and 26200.8655)
• KB5099536 (OS build 26100.33158)

Recovery media created from a system running an earlier update (for example, KB5089549, OS build 26200.8457, or earlier) is not affected. Microsoft has acknowledged the issue, and it is currently under investigation.