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Iranian Hacking Of New York Dam Signals Wider Cyber Threat

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A classified incident where Iranian hackers infiltrated a dam less than 20 miles from New York City two years ago underscores a major threat to the U.S. power grid, factories, pipelines, bridges and dams, according to a front-page story in today’s Wall Street Journal. The story notes the incident occurred amidst concerns that the Iranians had attacked U.S. banks.

The dam breach came a few years after U.S. spies damaged an Iranian nuclear facility using a computer worm.

Unlike a conventional war, a cyber attack can be hard to track. In the case of the New York dam, investigators first thought the intended target was a dam in Oregon.

Leon Panetta, then-U.S. Defense Secretary, warned in 2012 of Iran’s hacking capabilities.

Industrial  Computers Unprotected

One problem facing the U.S. industrial sector is that many of its computers were built before the consumer Internet. Hacking gurus warned against deploying these outdated computer systems. In many cases, these systems connect directly to office networks that are typically easy to hack.

Now, such systems are controlling drawbridges and water releases from dams, in addition to water flow in pipelines. As a result, the dams are vulnerable to traffic jams, floods and explosions caused by hackers.

Shodan, a search engine that catalogs Internet-connected machines, notes the U.S. has over 57,000 Internet-connected industrial control systems, which is more than any country. These systems range from big pipelines to office air conditioning units to electrical control systems.

The companies employing these systems have done little to protect them from hackers, according to security specialists.

Hacker Expert Warns Industry

Cesar Cerrudo, an Argentina-based researcher and chief technology officer at the consultancy IOActive Labs, said it’s great that everything is being integrated, but security is lacking. He showed a hacker conference in Las Vegas last year how easily he can manipulate traffic lights in big U.S. cities.

The operators of these systems are not paying attention to security, Cerrudo said.
The German government last year reported that hackers accessed a domestic steel plant’s control system and caused major damage to a blast furnace.

Governments also use cyber weapons. Israel and the U.S. used a computer program to disable centrifuges at Iran’s Natanz nuclear facility early in President Obama’s term. The virus self-replicated unintentionally and infected other networks, including Chevron Corp. Company executives said there was no damage.

The U.S. Department of Homeland Security (DHS) has been warning industries since 2011 to watch how they connect their systems to the Internet. In 2014, a report noted that the devices are poorly protected, thereby increasing chances of targeted and opportunistic hack attacks.

The DHS said it responded to reports of 295 industrial control system hacking incidents for the 12 months ending Sept. 30, marking an increase over the 245 incidents in 2014. In June, it said a critical asset owner suspected a breach and did not have records of devices on its network, undermining the investigation.

Hackers usually appear to probe systems to learn how they are set up and where they are vulnerable, investigators said.

A Wake Up  Call

The New York dam incident was a wake-up call that demonstrated Iran has greater cyber warfare capability than many believed and that it is capable of inflicting damage.

James Clapper, director of national intelligence, told a Congressional hearing in February that Iranian hackers are motivated and unpredictable cyber war actors.

Officials in Iran did not respond to a request for comment.

The dam hack also pointed to another challenge facing digital defenses in the U.S.: the cyberwar’s “fog.” The rules governing domestic surveillance and unclear Internet addresses prevented U.S. officials from determining where the hackers infiltrated.

An unclassified DHS summary indicates the hackers gained access through a cellular modem. People familiar with the incident said the summary refers to a small structure used for flood control near Rye, N.Y. called Bowman Avenue Dam. The hackers probed the system but did not take control of it.

A DHS spokesperson said the department responds to threats, vulnerabilities and cyber incidents at critical infrastructure across the country but does not comment on specific incidents.

Also read: Ted Koppel writes book about dangerous power grid hackers

Intelligence Suspected The Wrong Dam

American intelligence agencies noticed the attack when they monitored computers they believed to be linked to Iranian hackers targeting U.S. firms, sources told The Wall Street Journal. U.S. officials linked these hackers to consumer banking website hackers, including SunTrust Banks Inc., Capital One Financial Corp. and PNC Financial Services Group.

Analysts noticed a machine crawling the Internet seeking out vulnerable U.S. industrial control systems. The hackers were apparently focusing on specific Internet addresses, sources said. National Security Agency analysts advised counterparts at Homeland Security about these addresses.

Investigators were able to link an address to a “Bowman” dam. There are 31 U.S. dams that include that word in their name, however.

Officials feared the hackers accessed systems at Oregon’s Arthur R. Bowman Dam, which irrigates agriculture and prevents flooding in Prineville, Ore. Officials notified the White House that the digital conflict with Iran was escalating.

Asked to comment, the White House referred the Wall Street Journal to Homeland Security.

The trail eventually led to the Rye Brook, N.Y. dam. The manager of Rye, N.Y. said FBI agents came to the city offices to talk to the IT manager about a hacking incident but said there was very little discussion.

The FBI declined to comment.

Image 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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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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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 547 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 36 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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Bithumb Hack Prompts South Korea to Hasten Cryptocurrency Regulation

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South Korea’s second-largest cryptocurrency exchange suffered a security breach on Wednesday, prompting local authorities to hasten their adoption of stricter regulations.

Bithumb Hack

Bithumb confirmed Wednesday that cyber criminals “seized” 35 billion won ($31.6 million) worth of digital cash in an apparent attack targeting user accounts. The exchange halted deposits at approximately 00:53 UTC and began a wholesale transfer of funds to cold storage to prevent further theft.

“We checked that some of cryptocurrencies valued about $30,000,000 was stolen,” Bithumb tweeted Wednesday. “Those stolen cryptocurrencies will be covered from Bithumb and all of assets are being transferring to cold wallet.”

The exchange has confirmed that it will fully compensate affected users.

An earlier update on Bithumb’s Twitter account reveals that a security upgrade was being carried out last week where it transferred to a cold wallet for safe storage. However, it is unclear whether the upgrade is linked to the theft.

In terms of trade volume, Bithumb is the world’s sixth-largest cryptocurrency exchange. The platform processed more than $355 million worth of digital currency transactions in the last 24 hours, according to data provided by CoinMarketCap.

Bithumb is the second South Korean exchange this month to have been hacked. Less than two weeks ago, more than $37 million was compromised in a coordinated attack on Coinrail. The attackers went after the exchange’s coins and lesser-known ERC-20 tokens.

South Korea to Boost Regulation

South Korea’s financial regulators have announced plans to implement stricter guidelines for virtual exchanges, and to do so more expeditiously than previously planned. The announcement, which came on the heels of the Bitthumb attack, follows months of deliberation about whether to regulate cryptocurrency exchanges like banks and other financial institutions.

As CCN notes, cryptocurrency exchanges are presently regulated as “communication vendors,” which means virtually anyone can launch an online trading platform. This designation prevents direct oversight of digital currency exchanges by financial regulators.

New crypto regulations are expected to be rolled out in the coming months, which will put South Korea’s financial authorities on par with their counterparts in the United States and Japan. In those countries, cryptocurrency exchanges must comply with laws pertaining to security and consumer protection.

Park Yong-kin, a committee member of the National Assembly, has championed stricter regulations since last year. According to local media, his views are now being echoed by other government officials.

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 547 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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