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Coinbase was the Target in SendGrid Compromise

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For the second time in two years, SendGrid was compromised for the specific purpose of targeting a Bitcoin company. This time, the target was the exchange Coinbase, whose customers received an e-mail this week that said:

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Dear Customer,
We’re happy to announce a new product – Coinbase Invest Fund, reliable platform for small and medium scale investments. Fund assets are diversified among emerging Forex positions at Coinbase Exchange. Deposits are risk-free insured by institutions such as the New York Stock Exchange.
Want to become a professional investor? Our first short-term investment program starts today – GET 150% FOR A 10-DAY DEPOSIT.

Investment offer is active from 20th of April 12:00 AM Pacific until 30th of April. Coinbase offers you a fixed return with a 50% growth for a 10 day period. You can deposit today from $100. Maximum deposit amount per one person or legal entity is 60 Bitcoins. That’s an astonishing opportunity to earn up to $8,500 per 10 days!

Investors who want to apply, please make a deposit to
1LLkNuQQ2GkS5DmQzsTxCmErUH8ew6dnDi or click the link below
https://blockchain.info/qr?data=1LLkNuQQ2GkS5DmQzsTxCmErUH8ew6dnDi&size=400

Once a payment is made you will get an e-mail about successful participation. Please note: Initial deposit amounts exceeding +30 Bitcoins will qualify your membership for a 2nd level upgrade.

We will return your initial deposit with dividends on 1st of May, 2015 12:00 AM Pacific Time. (for example: investing 10 Bitcoins today will return 15 Bitcoins in a 10 day period) Profits are withdrawn without any delay and Coinbase waives all fees for 1st level investments.

Hurry up! This is a limited, one-time opportunity.

Kind regards, The Coinbase Invest Fund Team

Many Users Affected

phisingSeveral Coinbase users reported the suspicious e-mail to the Bitcoin subreddit, noting that it was signed by Coinbase servers. Coinbase later confirmed that their SendGrid account had been compromised. SendGrid is a larger version of MailChimp, which manages e-mail relations for organizations.

The Bitcoin address varied from customer to customer, making it seem that the attack was spear-phishing attack was well-planned and thoroughly executed. Coinbase told 1the New York Times1 that no Bitcoin were stolen, but that much would seem obvious. It’s not as if Coinbase’s servers were hacked. The question is how many customers fell for the scam, and whether Coinbase will take responsibility and compensate them for the lost coins. After all, customers had legitimate to believe these e-mails were real – they bored the DKIM signatures of CoinBase, the same ones used to sign other e-mails sent to them in the past.

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Also read: IBM Warns That Dating Apps Pose Corporate Risk

SendGrid’s Security Measures Part of the Problem

Last year, ChunkHost had a similar compromise on its mailing list when a hacker was able to socially engineer a password change of its account with SendGrid. “The oldest trick in the book,” going back to Kevin Mitnick days, it would seem, was still able to break SendGrid’s security as of 2014. ChunkHost is a Bitcoin-accepting VPN, and in that case, the attackers were specifically trying to take over the accounts of some Bitcoin websites who use ChunkHost.

From the ChunkHost blog:

A few weeks ago, we had received a transcript of a chat with Sendgrid tech support that was clearly someone trying to social engineer access to our account. Though Sendgrid didn’t fall for that attempt, we alerted them to the probing and asked them to please make sure that future social engineering attempts wouldn’t work. They replied [with a note about their security policy] and set our minds at ease. […] However, it turns out that the policy was ignored this weekend, and someone managed to convince Sendgrid over the phone to change the email address on the account. We got an email from them, but by that point it was already too late. The hacker had logged into Sendgrid and taken control. […] Sendgrid has a feature that allows you to BCC every outgoing message to a separate email address. Once they activated that feature, they initiated password resets on the two accounts they were after, both of which are Bitcoin-related. […] The password reset email was indeed delivered to our customer, but also BCC’d to the attacker. With the password reset link, they could change the password and access our customers’ accounts.

Luckily, the attack was unsuccessful, as ChunkHost caught it while in progress. But here again, SendGrid’s loose security practices were to blame.

It seems that paid third-parties can sometimes be the fatal flaw in security models, and companies like Coinbase and ChunkHost might be better off doing these services in-house.

Images from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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4 Comments

4 Comments

  1. mavil005

    April 11, 2015 at 8:27 am

    i.imgur.com/09591rf.jpg?1

  2. Robert Genito

    April 13, 2015 at 3:12 pm

    This *is* Coinbase’s responsibility. Their security team should really be thinking about the 3rd party services that they put trust in… I mean come on: they’re a financial company!

  3. Orchideric

    April 13, 2015 at 5:27 pm

    Good thing nobody was actually dumb enough to believe it.

  4. RJF

    July 4, 2015 at 8:18 pm

    Their lack of knowledge when using the English language is always a give away. If the grammar is poor or suspect, delete and move on…

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Breaches

Coincheck Hackers Launder 40% of Stolen NEM Funds, Experts Say

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The hackers behind Coincheck’s massive NEM heist have successfully offloaded 40% of the stolen funds, according to new research by Tokyo-based consultancy group L Plus. The successful money laundering campaign highlights the ongoing challenges authorities face in bringing cyber criminals to justice.

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Hackers Launder NEM

Analysts at L Plus believe that roughly 200 million NEM tokens, worth $79 million, have already been laundered through the dark web. However, the hackers likely pocketed a much smaller amount amid ongoing efforts to blacklist the tokens.

Nikkei Asian Review reported Monday that Coincheck was targeted with “suspicious traffic” for weeks leading up to the Jan. 26 heist. Citing a person close to the investigation, Nikkei said the attackers hacked an employee email and stole a private key needed to transfer the NEM tokens to the desired accounts. L Plus indicated that the attacker must have repeatedly accessed the Coincheck server to obtain the private key.

When the hack took place, the stolen NEM tokens were worth more than $400 million. Today, they are worth less than half that amount. The identity of the attackers remains unknown to this day. However, authorities have speculated that North Korea may have been responsible for the attack.

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Coincheck plans to resume operations this week following a government-mandated freeze on all trading activity.

Japan Boosts Oversight

The attack has prompted Japan’s financial regulators to step up their oversight efforts of the cryptocurrency market. Last week, regulators penalized seven exchanges after deeming their internal controls insufficient to deal with a cyber attack.

Japan’s Financial Services Agency (FSA) slapped two exchanges – FSHO and Bit Station – with month-long suspensions. The remaining five exchanges – Bicrements, Coincheck, GMO Coin, Mr. Exchange and Tech Bureau – were given business improvement orders.

The FSA began conducting on-site inspections in late January following the Coincheck attack. Regulators have uncovered several issues, including a lack of customer protection measures and insufficient anti-money laundering controls.

Japan remains one of the most welcoming jurisdictions for cryptocurrency trading, but repeated attacks may prompt regulators to reconsider their relatively lax approach. Digital currency exchanges in Japan and elsewhere face a growing threat from cyber criminals looking to capitalize on the rising value of digital assets.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 414 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Skepticism Grows Over BitGrail’s Supposed $167 Million Hack

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A relatively unknown cryptocurrency exchange by the name of BitGrail has informed its users of a coordinated cyber attack targeting Nano (XRB) tokens. However, the incident does not appear to be holding up to scrutiny after the founder of the exchange made an odd request to the developers of Nano shortly after discovering the alleged theft.

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BitGrail Exchange Allegedly Compromised

The Italian exchange issued a notice to its clients last week informing them that 17 million XRB tokens were compromised in a cyber attack. The XRB token, formerly known known as Raiblocks, is valued at $9.80 at the time of writing for a total market cap of $1.3 billion. That puts the total monetary loss of the supposed heist at nearly $167 million.

Parts of the notice have been translated into English from the original Italian by Tech Crunch, a media company dedicated to startups and technology news. According to the agency,  BitGrail has stated the following:

“… Internal checks revealed unauthorized transactions which led to a 17 million Nano shortfall, an amount forming part of the wallet managed by BitGrail… Today a charge about those fraudulent activities has been submitted to the competent authorities and now is under police investigation.”

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The notice indicated that all transactions have been put on hold until authorities complete their investigation.

Very little is known about BitGrail, as it is not listed among the 183 exchanges whose volume is ranked by CoinMarketCap.

Suspicion Grows

Unlike other crypto heists, the circumstances surrounding the alleged BitGrail attack have been met with widespread suspicion. As David Z. Morris of Fortune rightly notes, this isn’t the first time BitGrail has suspended Nano withdrawals. The same thing happened in early January when the exchange halted not only Nano, but Lisk and CryptoForecast transactions as well.

The suspension was followed by an announcement that the exchange was taking measured steps to verify users and enforce anti-money laundering requirements. It was around this time that users became suspicious that BitGrail was going to cut and run with their tokens.

BitGrail founder Francesco Firano made an unusual request to the developers of Nano following the alleged attack: he asked them to fork their record, a move that would essentially restore the stolen funds.

Nano officially rejected the request on Friday, the day after Firano supposedly discovered the stolen coins. In a post that appeared on the Nano Medium page, the team said:

“We now have sufficient reason to believe that Firano has been misleading the Nano Core Team and the community regarding the solvency of the BitGrail exchange for a significant period of time.”

Last month, hackers made off with more than $400 million worth of NEM tokens stolen from Coincheck, a Japan-based cryptocurrency exchange. The coins have yet to be recovered and the perpetrators remain at large. In 2014, a cyber heist brought down Mt Gox, which was the world’s largest exchange.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 414 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Coincheck Hackers Are Trying to Sell Their Stolen NEM Coins

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hacker extortion bitcoin

The hackers behind the biggest crypto heist of all time are attempting to sell their stolen coins, according to an executive at the NEM Foundation. The revelations are the latest in a four-day saga that has authorities still struggling to identify perpetrators or locate the account in receipt of the stolen funds.

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Hackers Try to Profit

Jeff McDonald, Vice President of the NEM Foundation, said Tuesday that his organization had traced stolen XEM coins to an unidentified address. It was here that the thief tried to unload the stolen funds onto six online exchanges for the purpose of selling them. McDonald said the exchanges have since been notified.

It was not immediately apparent how many of the stolen coins were spent or even the whereabouts of the account. A spokeswoman at the NEM Foundation later said the attacker sent the cryptocurrency to several random accounts in 100-token increments.

Last Friday, the attackers made off with more than $400 million worth of NEM tokens from Japanese cryptocurrency exchange Coincheck. The monetary value of the heist has fluctuated several times over the past four days, reflecting regular price moves in NEM’s native XEM token. However, Coincheck said it would reimburse account holders at a rate of 81 U.S. cents per token, which reflects the average price between Jan. 26 and 27.

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Coincheck has been fined administrative penalties for failing to secure client funds. It was later revealed by the executive management team that the exchange failed to implement basic security features, such as multi-signature capability and cold storage. Rather, the XEM tokens were held in accounts connected to the internet.

Although the NEM Foundation is trying to prevent the liquidation of stolen funds, MacDonald said the attackers will likely get away with some of the money. However, the likelihood that they spend all of it is virtually zero given the market’s underlying liquidity constraints.

NEM Price Volatility

News of the heist on Friday triggered significant volatility in the price of XEM and the broader cryptocurrency market. Following a brief recovery, XEM has declined steadily over the past three days, with prices reaching new six-week lows on Tuesday. The coin touched a session low of 79 cents on volumes of more than $32 million. At press time, the coin was worth a little more than 80 cents.

Even with the decline, NEM held on to tenth spot in the global cryptocurrency rankings based on market cap. The coin’s overall value remains well north of $7 billion, according to CCN.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 414 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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