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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:

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 (for example: investing 10 Bitcoins today will return 15 Bitcoins in a 10 day period) Profits are withdrawn without any delay and Coinbase waives all fees for 1st level investments.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.

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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Altcoins

Crypto-Security Testnet Surpasses Key Milestones

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Security and has been combined with micro-compucomputing are a combination which ascended to greatly relevant, both economically and financially, since the early days of commercial internet technology, the John McAfee associated era of anti-virus software, and fears of ‘millennium-bug’ (‘Y2K’)-induced societal meltdowns.

As a market player, ‘cybersecurity‘ is hailed for its continuedvalue and growth, with recent implementations advancing in tandem with technological development. With ‘blockchain’ having become a key buzzword in recent years, it comes as little surprise that digital security providers have been attempting to identify and provide protection against cryptocurrency related scams.

Examples of these include ‘malware‘ AKA ‘malicious software’. They are often created with the aim of illicitly subvert the processing power of the victim’s device for use towards the mining of cryptocurrencies, or lock and potentially delete highly sensitive data (such as Ransomware’).

Cybersecurity and Blockchain

Crypto attacks can affect almost any person or institution: from private wallets and exchanges, to cryptocurrency operators, and even sometimes unsuspecting users of internet browsers with no relation to blockchain based services.

In an article published at CCN in August 2018, I wrote about the large prolificity and news coverage of cyber-attacks carried out against cryptocurrency organisations: with a majority of them involving the theft of high-value quantities of tokens or sensitive data.

Key points raised in the piece include the identification of wallets and exchanges as high-value targets for potential thieves, as well as a discussion surrounding a study of over 1000 participants in which none of the top exchanges were “lauded for security”.

As cybersecurity has been exposed as a fatal flaw in the unauthorised access / theft access of finances and data, it has also drawn a spotlight on the various methods employed by the companies which suffer these attacks.

Middleware, Wear and Tear

Some teams attempt to protect their data and finances through the creation and implementation of their own proprietary cybersecurity solutions whilst others seek the tender of others,

‘Middleware’ is nothing new and has long been utilised as a means of implementing third-party solutions as a means of shifting professional a legislative liability regarding essential functions of a brand technology.

It’s a creation by third party product / service providers that sits between external and internal code in order to facilitate functions or protections.

Decentralized Security Testnet

REMME is a project harnessing blockchain technology to create a distributed cybersecurity solution for enterprises.

Its now-released testnet has already demonstrated the efficacy of storing hashed Public Key Infrastructure certificates on the blockchain, and with 300 pilot program participants signed up, REMME isn’t short of applicants eager to trial its distributed identity and access management solution.

‘Distributed Identity and Access management’ (IAMd) and ‘Public Key Infrastructure’ requests (PKId) count amongst two of the primary features of the proprietary REMChain testchain network infrastructure. Both claims of which have come from CEO Alex Momot, who additionally praised “The interoperability of the public blockchain and sidechains”.

Additional features include the ‘REMchain block explorer’ – ‘node monitoring’ (connected to five nodes worldwide) – REMME WebAuth demo application.

While a pilot program reportedly attracting over 300 global enterprise applicants, REMME feels confident about the future of their long terms plans: which include full integration existing enterprise systems (ERP, CRM, Accounting software etc.).

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 10 rated posts




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MyEtherWallet Compromised in Security Breach; Users Urged to Move Tokens

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Popular cryptocurrency service MyEtherWallet (MEW) is urging users to move their tokens after the platform succumbed to its second cyber attack of the year. As the company reported earlier, hackers targeted MEW’s popular VPN service in an attempt to steal cryptocurrency.

Hola VPN Users Compromised

Rather than target MEW directly, hackers took control of the Hola VPN service, which claims nearly 50 million users. For the next five hours, MEW users who had the Hola chrome extension installed and running on their computer were exposed.

MEW took to Twitter to urge users to move their funds immediately.

“Urgent! If you have Hola chrome extension installed and used MEW within the last 24 hrs, please transfer your funds immediately to a brand new account!” the company said. It added the following message shortly thereafter:”We received a report that suggest Hola chrome extension was hacked for approximately 5 hrs and the attack was logging your activity on MEW.”

At the time of writing, MEW’s Twitter feed had no further updates.

MyEtherWallet is used to access cryptocurrency wallets, where users can send and receive tokens from other people.

The company reportedly told TechCrunch that the attack originated from a Russian-based IP address.

“The safety and security of MEW users is our priority. We’d like to remind our users that we do not hold their personal data, including passwords so they can be assured that the hackers would not get their hands on that information if they have not interacted with the Hola chrome extension in the past day,” MEW said, as quoted by TechCrunch.

It’s not yet clear how many users were compromised in the attack or how much, if any, was stolen from their wallets. MEW suffered a similar incident in February after a DNS attack wiped out $365,000 worth of cryptocurrency from users’ accounts.

Cyber Attacks on the Rise

The attack on MEW came less than 24 hours after Hacked reported another major cyber breach involving Bancor, a decentralized cryptocurrency exchange. The security breach compromised roughly $23.5 million worth of digital currency, including Ethereum, NPXS and BNT, Bancor’s native token.

Last month, a pair of South Korean exchanges fell prey to cyber criminals, prompting local regulators to expedite their approval of new cryptocurrency laws.

It has been estimated that a total of $761 million has been stolen from cryptocurrency exchanges in the first half of the year, up from $266 million in all of 2017. That figure is expected to rise to $1.5 billion this year.

CipherTrace, the company behind the estimates, told Reuters last week that stolen cryptocurrencies are mainly used to launder money and aid criminals in concealing their identities.

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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4.6 stars on average, based on 644 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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Mt. Gox vs. Bithumb: That Was Then, This Is Now

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Bithumb now shares something in common with the Tokyo-based shuttered bitcoin exchange Mt. Gox — both suffered a hack on about the same date, June 19. It’s a club that no exchange wants to belong to and that Bithumb happened on the seven-year anniversary of Mt. Gox’s maiden attack has to be more than an eerie coincidence.

It’s a stark reminder of the risks involved with keeping funds on an unregulated exchange, vulnerabilities that cost South Korea’s Bithumb some $36.6 million in digital cash and Mt. Gox $450 million in hacked bitcoin and its future. The Mt. Gox theft unfolded over a series of hacks that culminated in 2014. Though it’s still early on in the Bithumb hack, it appears the South Korean exchange will recover from the security breach. So what do we know now that we didn’t on June 19, 2011?

Then vs. Now

Former Coinbase official Nick Tomaino, who is also the founder of crypto fund 1 confirmation, reflected on the Mt. Gox hack in what proved to be a prescient tweet given the Bithumb attack that was about to surface.

The thing to note about Mt. Gox is that the Japan-based exchange in 2011 controlled most of the BTC trading volume, approximately three-quarters of it by average estimates — more if you ask Tomaino. Since bitcoin fever caught on in 2017, there are more than 500 cryptocurrency exchanges on which trading volume is shared. Binance boasts the highest trading volume and captures nearly 15% of bitcoin trading. It’s much less than Mt. Gox days but still a little high.

The other thing to note is that the Mt. Gox hack or actually hacks, as there were multiple attacks on the exchange over several years, was a mysterious event that was shrouded in controversy and mistrust of a key executive. Bithumb, on the other hand, confronted the hack seemingly right away on Twitter and has not let any grass grow under its feet in the interim, which is a key difference in the way Mt. Gox was handled.

Also, the bitcoin price didn’t tank in response to the Bithumb hack. It traded lower for a while, but less than 24 hours it was back in the green, which is a reflection of the fact that bitcoin trading is no longer dependent on a single exchange.

Charlie Lee, creator of Litecoin (LTC), the No. 6 cryptocurrency by market cap, was among the first to respond to the Bithumb hack. He tweeted:

Indeed, Bithumb does expect to be able to cover the losses via their reserves.

Crypto Security

It’s still early on in Bithumb’s security breach, and more details are sure to emerge in time. In the meantime, it’s a good idea to use the hack as an opportunity to examine the security of your cryptocurrency investment portfolio. There are several hardware wallet options out there for you to choose from — whether it’s Trezor or Ledger Nano S, to name a couple — and as Charlie Lee advised, “only keep on exchange coins that you are actively 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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4.6 stars on average, based on 67 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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