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 (for example: investing 10 Bitcoins today will return 15 Bitcoins in a 10 day period) Profits are withdrawn without any delay and Coinbase waives all fees for 1st level investments.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

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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

Uber Is Paying Hackers to Keep Quiet

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Uber Technologies Inc. has reportedly paid hackers to delete scores of private data stolen from the company in a security breach that was concealed for over a year. The revelation provides further confirmation that, when it comes to cyber security, crime does pay.

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Massive Data Breach

According to Bloomberg Technology, hackers retrieved the personal data of 57 million Uber customers and drivers at some point last year. Nobody heard about it because the rideshare company paid the hackers $100,000 to keep quiet. A purge at the front office of Uber also ensured that the massive cyber breach was kept under wraps.

The compromised data was from October 2016 and included the names, phone numbers and addressed of 50 million Uber riders globally. About seven million drivers had their personal information accessed as well.

At the time of the cyber attack, Uber was inundated with a slew of legal issues stemming from alleged privacy violations. Rather than shine even more negative spotlight on the company, Uber executives decided to pay hackers to stay quiet.

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“None of this should have happened, and I will not make excuses for it,” Dara Khosrowshahi, who took over as CEO in September, said in a statement that was published by Bloomberg. “We are changing the way we do business.”

Hackers have done a masterful job infiltrating companies and governments in recent years. As a reminder, recent cyber attacks levied against Yahoo!, Target Corp and Equifax Inc. dwarf Uber’s 57 million compromised accounts.

Various reports indicate that cyber attacks are bleeding the global economy dry. One report, issued by the World Economic Forum, suggests that cyber crime cost the world economy $445 billion in 2016. If cyber crime were its own market cap, it would exceed Microsoft Inc., Facebook Inc. and ExxonMobil Corp

The Fall of Uber?

Uber revolutionized the ride-hailing business over the span of seven years by giving more power to the consumer. Several missteps later, the company finds itself in legal hot water, with its future appearing less certain than it did just one year ago.

The rideshare company faces at least five U.S. probes ranging from bribes to illicit software and right up to unethical pricing schemes. According to another Bloomberg report, Uber is under investigation for violating price transparency regulations, not to mention the alleged theft of documents for Google’s autonomous cars.

Some governments are sensing weakness in the ride-hailing service, and are moving toward banning the Uber app entirely. London is the most prominent example of a city that has taken definitive steps to outlaw the service over a “lack of corporate responsibility.”

Even with its legal troubles, Uber is a revolutionary technology that has influenced a bevy of other innovations aimed at improving the human experience.

Featured image courtesy of Shutterstock. 

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Ethereum Notches Two-Month High as Bitcoin Offspring Triggers Volatility

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Digital currency Ethereum climbed to a two-month high on Monday, taking some of the heat off Bitcoin and Bitcoin Cash, which have slumped since the weekend.

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Ethereum Forges Higher Path

Concerns over Bitcoin created a favourable tailwind for Ethereum (ETH/USD), which is the world’s No. 2 digital currency by total assets. Ether’s price topped $340.00 on Monday and later settled at $323.54. That was the highest since June 20.

At its peak, ether was up 10% on the day and 70% for the month of August.

The ETH/USD was last down 2.2% at $315.02, according to Bitfinex. Prices are due for a brisk recovery, based on the daily momentum indicators.

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Fractured Bitcoin Community

Bitcoin and its offshoot, Bitcoin Cash, retreated on Monday following a volatile weekend. The BTC/USD slumped at the start of the week and was down more than 3% on Tuesday, with prices falling below $3,900.00. Just last week, Bitcoin was trading at new records near $4,500.00.

Bitcoin Cash, which emerged after the Aug. 1 hard fork, climbed to new records on Saturday, but has been in free-fall ever since. The BTH was down another 20% on Tuesday to $594.49, according to CoinMarketCap. Its total market value has dropped by several billion over the past two days.

Analysts say that a “fractured” Bitcoin community has made Ethereum a more attractive bet this week. The ether token has shown remarkable poise over the past seven days, despite trading well shy of a new record.

Other drivers behind Ethereum’s advance are steady demand from South Korean investors and growing confidence in a smooth upgrade for the the ETH network. The upgrade, which has been dubbed “Metropolis,” is expected in the next several weeks. Its key benefits include tighter transaction privacy and greater efficiency.

Ethereum Prices Unaffected by ICO Heist

Fin-tech developer Enigma was on the receiving end of a cyber-heist on Monday after hackers took over the company’s website, mailing list and instant messaging platforms. The hack occurred three weeks before Enigma’s planned Initial Coin Offering (ICO) for September 11.

In addition to defacing the company’s website, the hackers pushed a special “pre-sale” ahead of the ICO. While many users realized it was a scam, 1,492 ether tokens – valued at $495,000 – were directed into the hackers’ cryptocurrency wallet by unsuspecting backers.

The irony in all this is that Engima is a cryptography company that prides itself on top-notch security protocols. The company issued a statement that its servers had not been compromised.

ETH/USD (Bitfinex)

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Ethereum Prices on Track for 35% Monthly Drop

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It has been a difficult month for ethereum. The world’s No. 2 digital currency has lost a third of its value over the past 30 days following a series of cyber breaches targeting vulnerable wallets and ICOs.

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Ethereum Struggles to Regain Momentum

Ethereum (ETH/USD) was trading near $197.00 Sunday at 6:30 BST, according to Bitfinex. That represents a decline of around 5%. At current values, ethereum’s market cap was $18.4 billion.

The ETH/USD exchange rate has struggled throughout July, with prices briefly falling below $160.00. The decline, which amounted to a 60-day low, lured bargain-hunters back into the market. After surging back toward $250.00, the ETH/USD has consolidated below the $220-mark, which continues to offer strong resistance. On the opposite side of the spectrum, major support is located at $180.00.

A price recovery may prove elusive in the short-term, with the Relative Strength Index (RSI) and Stochastic indicator signalling weak underlying momentum.

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Despite its recent decline, ethereum’s value has surged more than 2,200% this year.

Cyber Attacks, SEC Weigh on Market

The ethereum network suffered a large-scale cyber breach earlier this month resulting in the loss of tens of millions of dollars. A community of ethical hackers quickly banded together to “rescue” hundreds of millions of dollars worth of tokens.

Blockchain-based trading platform Coindash was also hijacked during an initial coin offering (ICO). The breach exposed Coindash’s ether wallet address, resulting in the loss of $7 million worth of ether.

The Securities and Exchange Commission (SEC) has also taken an interest in the ethereum-based ICO market. Last week, the regulator concluded that a certain multi-million dollar token sale last year violated securities law. Although ICOs have been compared to crowd-sourcing, the SEC maintained that some tokens were in fact securities.

Analysts say the SEC ruling could impact the future of ICOs, although it remains unclear how the regulator is pursuing this market. The SEC’s July 25 press release cautions investors about ICOs in general.

ETH/USD (Bitfinex)


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