Microsoft.Exchange.Servicehost.exe crashes after you enable FIPS

The Microsoft Exchange Service Host service (Microsoft.Exchange.ServiceHost.exe) on a computer that is running Microsoft Exchange Server 2013 crashes after you enable United States Federal Information Processing Standard (FIPS) compliant algorithms for encryption, hashing, and signing.

Additionally, the following event is logged in Application log:

Log Name: Application
Source: MSExchange Common
Date: -
Event ID: 4999
Task Category: General
Level: Error
Keywords: Classic
User: N/A
Computer: Computer
Description:
Watson report about to be sent for process id: processID, with parameters: E12, c-RTL-AMD64, BuildType, M.Exchange.ServiceHost, mscorlib, S.S.C.MD5CryptoServiceProvider..ctor, System.TypeInitializationException, b24a, 04.00.30319.17929.

This issue occurs because an incorrect cryptographic hash function is used.

To resolve this issue, install Exchange Server 2013 Service Pack 1.

To work around this issue, disable FIPS by using the Local Group Policy Editor. To do this, follow these steps:

1. Click Start, and then click Run.
   
   Note For Windows Server 2012, type run on the Start screen, and then click Run in the results list. 
2. In the Open box, type gpedit.msc, and then click OK. The Local Group Policy Editor starts. 
3. Expand Computer Configuration, expand Windows Settings, expand Security Settings, expand Local Policies, and then click Security Optons.
4. In the list of policies, double-click System cryptography: Use FIPS compliant algorithms for encryption, hashing, and signing, and then select Disabled.
5. Click OK.
6. Exit the Local Group Policy Editor. 

You have to restart the computer to apply the changes.

Microsoft has confirmed that this is a problem in the Microsoft products that are listed in the "Applies to" section.