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FBI Cracks Florida Man’s TrueCrypt Password

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fbi-cracks-truecrypt-password-encryption-backdoorAccording to recent reporting by South Florida’s Sun Sentinel, the government has managed to crack a TrueCrypt password in the case of Christopher Glenn. Army counterintelligence expert Gerald Parsons noted that in his estimation, it would have taken “billions” of years to do so by traditional methods with current capabilities.

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The actual likelihood of the FBI, or anyone, cracking the 30-character password by using brute force or any other technique is incredibly low. More likely, the lengthy password was written somewhere and investigators discovered it, or a backup was left with another party, who disclosed it.

See also: How to Encrypt & Decrypt Any File On Your System (Video Tutorial)

In this case, TrueCrypt was being used to protect stolen e-mails and attachments from an Army official at a base in Soto Cano, Honduras. Glenn worked for Harris Corporation, a computer security contractor who does a lot of work for the government. This was central to the case since Glenn had previously been expelled from a government contracting job in Iraq because of misconduct. He had hacked US government systems to help Iraqi firms win contracts. Further, he and his wife were accused of giving benefits to Iraqis that were supposed to be exclusive to Americans. That particular case, from 2007-2009, did not receive much attention due to its limited scale. Glenn had only injured the government in the amount of around $17,000, investigators have said.

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Also read: Florida Bringing Hacking Felony Charges Against 13-Year-Old

In the case of his Honduras work, the motive is unclear for Glenn’s theft and subsequent holding of the contents of the base commander’s classified e-mail account. In January, Glenn did confess and plead guilty to the crime. While it has not been stated publicly, this could have been when Glenn himself disclosed the TrueCrypt password as part of a plea agreement. Yesterday he received 10 years in federal prison. At no point during the investigation has he answered the question on everyone’s mind: why he did it. Instead, prosecutors have focused on the fact that much of the classified information could have been very dangerous to the United States in the wrong hands.

Also read: How to Create a Secure Password

No one from the FBI has publicly claimed to have cracked TrueCrypt, but then again this is not the sort of information the agency would want widely spread. After all, TrueCrypt is still one of the top destinations for anyone looking to encrypt files, for whatever purpose. If criminals continue to rely on it while not knowing it has been broken (the software’s maintenance was discontinued in a long, drawn-out intellectual property dispute), the FBI could see a higher rate of conviction on evidence. The question of whether hacking by the government for the purpose of obtaining evidence violates the 4th amendment will always exist, but if TrueCrypt and other forms of strong encryption start unraveling, it will certainly be a question brought up more often.

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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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  1. NemEu

    August 6, 2015 at 5:44 pm

    so what really happened? they brute forced the 30 character or discovered it ?

    • Mirco Romanato

      August 6, 2015 at 6:37 pm

      I bet they did a dictionary attack of some sort.
      Usually people use something they are able to memorize.

      • NemEu

        August 6, 2015 at 7:00 pm

        so anyway was bruteforce

        • Steve Bones

          August 18, 2015 at 11:59 pm

          Nope. The sun would go out before a random 30 character pw was brute forced.

      • Steve Bones

        August 18, 2015 at 11:57 pm

        30 character dictionary attack? Doubtful unless it’s “Dick and Dora went up the hill”, which would be cracked in minutes. More likely it was random text which he had to write down because he couldn’t remember it – or a keylogger or other exploit. The recent TC audit was very professional and came up relatively clean, no backdoors.

  2. MikeyTG

    August 7, 2015 at 11:33 am

    My guess is this is a little gubment FUD. They want to imply that truecrypt was cracked so people will stop using it.

    • englishvinal

      August 7, 2015 at 4:08 pm

      My opinion.. YOU are right on!

    • NemEu

      August 7, 2015 at 6:59 pm

      makes sense, due the latest truecrypt version on oficial website with that strange notice with NSA initials in CamelCase…you know …

    • P. H. Madore

      August 7, 2015 at 7:28 pm

      Or to try and scare people into whatever the new “it” tool is.

    • Robert Genito

      August 11, 2015 at 8:49 pm

      Trucrypt files have a suspicious area of data that is undocumented and not much information can be found on this mysterious block of data. This combined with the fact that there’s simply just not enough peer review for Trucrypt is the *exact* reason why I do not use Trucrypt. It’s also likely the reason why a 30 character password was easily discovered. Let’s call it a back door 🙂

      • Steve Bones

        August 18, 2015 at 11:44 pm

        Let’s NOT call it a back door 🙂 None of the code in TC is documented. And even better than “peer review”, *all* of the source code has now been audited by NCC Group Inc. with only 2 areas (CryptAcquireContext may silently fail in unusual scenarios & AES Implementation susceptible to cache timing attacks) considered to be high risk – but also extremely high difficulty in attacking. I’m interested in this “suspicious area of data” you talk about because there is no mention of it in the NCC Group audit report. Or are you referring to the very minor issue that there is some “Unauthenticated ciphertext in volume headers” which was found by NCC Group to be very low risk and very high attack sophistication. Please tell us more about this “mysterious block of data”.

  3. englishvinal

    August 7, 2015 at 4:07 pm

    From the available facts, the govt. is full of shysa as usual… “never let a crisis/opportunity go to waste”…and the propaganda machine is spewing “we cracked an uncrackable code”.. ha ha ha.
    Makes people stop using the encryption because they don’t trust it anymore… makes life easier for the goons and mafia… fewer uncrackable codes to mess with.

    • P. H. Madore

      August 7, 2015 at 7:31 pm

      I recommend this as a TL;DR on my article. 😀

      • P. H. Madore

        August 7, 2015 at 7:34 pm

        Although, I would add that the fuzz most likley has their own new little freecrypt program.

        I will say that SourceForge had some weird data issues a few weeks back, still recovering IIRC. Dunno how that would even play into it, but what if they needed to doctor up a repo version history, or completely rewrite one, on a certain little crypto program that another thing was based on, and then when that thing went upstream, well, the bugs in the water, which fish will catch him first? It’ll be a little one, who will be little heard, except on little sites like this one. (I hope.)

        Anyway I think that would be the more likley motive: get people using whatever the top google result will be for “freecrypting.”

        Those who really understand cryptography on a basic level understand that all of it really begins with you. If your password was crackable at 30-characters, it had to be a phrase. IF.

  4. concerndcitizen

    August 7, 2015 at 5:46 pm

    These “publicly available” crypto solutions are NOT as secure as people think. Combine some reasonable guesses with known information and it narrows down the number of guesses you have to make. There are more shortcuts than people imagine. The key gen for many original BTC wallets used SSL and the time in seconds, not nanoseconds, you can noodle over that for a bit. This is no big surprise.

    • P. H. Madore

      August 7, 2015 at 7:31 pm

      I’m just surprised that someone who knows what BTC is actually buys, for a second, that the FBI, the jokers who can’t even secure the White House (IDC if it’s not their department…), had actually hacked TrueCrypt.

      • Steve Bones

        August 18, 2015 at 11:54 pm

        Yep, I’m with ya. Until quantum computing, it’s sloppy housekeeping (written passwords esp. for 30 character pw’s like this guy’s, caught with live and open notebook, notebook ram scraped for plaintext key, hardware keylogger placed inside the notebook, one of the state sanctioned software keyloggers, JS/activex/flash exploits, etc and etcetera).

    • wonky tonky

      August 8, 2015 at 7:14 am

      thats why i roll my private key with dice 🙂

  5. solid12345

    August 7, 2015 at 6:28 pm

    Notice this comes weeks after James Comey was whining about encryption on the Senate floor.

    • P. H. Madore

      August 7, 2015 at 7:29 pm

      Let’s hope a Senator gets him to clarify what happened next time. “So, didn’t you crack one in Florida? Why do we need a new law and all this money if you can crack them? Man up and crack the passwords like a good little boy, now.”

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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.

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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 417 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.

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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 417 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 417 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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