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Report: BitTorrent Malware Risks Call For Better Security Measures

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Peer-to-peer (P2P) file sharing has become a popular past time, but malware in some files can make downloading games and applications very dangerous to organizations in all types of  industries when the content is downloaded on employers’ networks.

BitSight-File-Sharing

A report recently released by BitSight Technologies, a Cambridge, Mass.-based security firm, assessed the cybersecurity readiness of more than 30,000 companies and found 39% of the games and 43% of the applications available for free on peer-to-peer piracy sites carry malicious software.

The most downloaded games were “Grand Theft Auto 5,” followed in order by “The Sims 4,” “Mortal Kombat X,” “FIFA 15,” and the “Witcher.”

“Adobe Photoshop” was the most downloaded application, followed by Microsoft Windows 8.1, Microsoft Windows 7, and Microsoft Windows 10. Education industry employees were the most frequent downloaders, followed by hospital/tourism, government and energy.

A Ground Breaking Report

The report, “Peer to Peer Peril: How BitTorrent File Sharing Impacts Vendor Risk and Security Benchmarking,” noted that many organizations ban downloading from piracy sites, but in some industries, more than 25% of companies are sharing files over the BitTorrent protocol. Some of the files are most likely legitimate, but many are classified as games, movies and other copyrighted content.

Software and games are especially dangerous since they contain executable files, as opposed to music and video files. Files that are executable authorize a user to automatically do tasks and functions without the user’s participation. For example, rather than booting up a video game menu screen, a user can be providing access to his or her employer’s payroll data.

“Grand Theft Auto 5” and Adobe Photoshop have been torrent site fixtures for years, despite the fact that Adobe said it would move to a subscription plan to prevent piracy. A random search of Kickass Torrents and Pirate Bay websites yielded hundreds of illicit files being spread by thousands of users, who presumably are from all over the globe.

Pirate Bay Closing Draws Attention

The 12-page BitSight report notes that file sharing problems have come to public light due to Sweden’s closing Pirate Bay after the U.S. threatened sanctions through the World Trade Organization. It notes that P2P file sharing became popular in the late Eighties and early Nineties thanks to websites like Limewire, Napster and Kazaa.

BitSight tracked file sharing activity on 23% of companies using the BitTorrent protocol among more than 307,000 companies that it rates for security performance. It notes that much of the activity violates corporate policies, even though there are no public metrics on how many companies forbid P2P file sharing.

File sharing is not illegal, the report notes; only sharing copyrighted content is.
P2P file sharing results from “shadow IT,” where employees download copyrighted business applications like Adobe and Microsoft products. Legal departments and IT departments are knowledgeable about the consequences of illegal sharing of copyrighted material. However, companies may not be aware of the security risks these activities pose.

The fact that BitSight researchers found that 43% of torrented applications carried malicious software in reviewing hundreds of torrented files from the BitTorrent protocol indicates businesses need to have technologies and policies that mitigate the risks these activities pose.

The report includes industry metrics as well as recommendations to help security professionals reduce this threat to vendor and corporate networks.

BitSight security ratings measure an organization’s security performance. The ratings are based on an analysis of observable data. Banks, insurers and equity companies use the ratings to mitigate third party risks, underwrite cyber insurance, benchmark security performance, manage portfolio cyber risk, and conduct M&A due diligence.

Report Uncovers Problems With File Sharing

Report findings include:
• File sharing is a common problem.
• Companies with file sharing carry lower BitSight security ratings.
• Torrented files carry a major malware business risk.
• A correlation exists between file sharing activity and botnet activity.
• Government, utilities and education industries are poor performers.

In analyzing the correlation between BitTorrent activity and botnet infections, BitSight noted high malware infection rates indicate companies with file sharing activity are more vulnerable to botnet infections.

Earlier research reinforces this finding, including a Vienna University of Technology paper, “Vanity Cracks and Malware: Insights into the Anti-Copy Protection Ecosystem.” Researchers analyzed file sharing download links and observed that a majority of the programs seek to infect the target machine with one or more malware types.

BitSight examined applications and games since these categories contain executable files that tend to be more susceptible to malware. It found that 39% of games and 54% of applications carried malicious code after running the files through file scanners and accounting for false positives.

This finding indicates a high number of files shared over the BitTorrent protocol have potentially harmful software. Researchers, after finding these files had a high rate of infection, explored whether companies with file sharing activity have more compromised machines on account of botnet infections.

BitTorrent Tied Closely  To Botnet Infections

BitSight found a correlation between botnet infections and file sharing over BitTorrent protocol. BitSight cannot demonstrate malicious software from BitTorrent files caused the infections, but it does believe companies with more BitTorrent activity are more apt to have more botnet infections.

The report notes significant differences exist among industry sectors in file sharing activity. It examined 10 industries: retail, education, government, media/entertainment, energy/utilities, tourism/hospitality, manufacturing, legal, finance and healthcare. These industries provide a diverse set of sectors in the global economy.

The research found that finance is the top performer in preventing file sharing on corporate networks. A security culture and strong regulations are credited for this.

Retailers have the most breaches. In light of breaches at Home Depot and Target, many are skeptical of retailers’ ability to prevent attacks. The report noted that 22% of retailers have file sharing activity on their networks.

Healthcare achieved a “middle of the pack” file sharing performance. This sector has a lower than average number of shares.

File sharing was found in around 25% of energy/utility sector companies. The most surprising finding here is the high average shares per entity: 2.8k. The researchers found this surprising given that energy/utilities is a highly-regulated industry.

The government sector is a poor performer. About 32% of government entities indicated some level of file sharing activity on their networks. The average number of shares per entity was 3.1k.

Also read: XcodeGhost malware threatens iOS users, FireEye warns

Government Agencies Recognize The Risks

Government agencies have cited the dangers of corporate file sharing. A 2009 bill that never got beyond the U.S. House of Representatives attempted to halt file sharing by federal employees.

Downloading copyrighted media has plagued higher education administrators. The Copyright Clearance Center noted that universities may face liability claims from students’ conduct. About 58% of education sector organizations have observed file sharing on networks. Nonetheless, share-per-entity is 1.2k, which is below that of government and energy/utilities.

BitSight examined the relationship between its security ratings and BitTorrent activity. The analysis found a significant difference in median security ratings for firms with file sharing and those without it for every industry.

Recommendations For Business

Bittorrent activity in industries

The report recommended the following guidelines for businesses:
• Have a clear file sharing policy for the corporate network and enforce it. Periodic training and updates will make employees aware of security policies. If file sharing is allowed for some purposes, there need to be policies to stop unauthorized sharing.
• Configure firewalls to prevent file sharing. Companies can adjust firewalls to stop file sharing over networks.
• Verify file sharing with continuous monitoring. BitSight provides outside-in monitoring of networks. No information is required from the rated company, providing professionals the means to identify unauthorized file sharing on a network.
• Examine file sharing activity on third party vendor networks and acquisition targets, in particular, those with access to company information. Third party risk teams need to invest in verification tools to make sure vendors adhere to their stated policies. Companies seeking to make acquisitions should review file sharing activity on the acquisition target’s network.

Steps to prevent file sharing are available on the FTC website, www.ftc.gov/tips-advice/business-center/guidance/peer-peer-file-sharing-guide-business.

Professionals Can Use Recommendations

Security professionals can use the recommendations for several uses. These include:
• Benchmarking security performance
• Managing vendor risks
• Conducting M&A due diligence
• Underwriting cyber insurance

Images from Shutterstock and BitSight.

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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Breaches

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 604 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 60 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 604 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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