Remember last November, when hackers broke into the network for LastPass—a password database—and stole password vaults with both encrypted and plaintext data for over 25 million users? Well, they’re now using that data break into crypto wallets and drain them: $35 million and counting, all going into a single wallet. That’s a really profitable hack. (It’s also bad opsec. The hackers need to move and launder all that money quickly.) Look, I know that online password databases are more convenient. But they’re also risky. This is why my Password Safe is local only. (I know this sounds like a comm ..read more

The cryptocurrency fintech startup Prime Trust lost the encryption key to its hardware wallet—and the recovery key—and therefore $38.9 million. It is now in bankruptcy. I can’t understand why anyone thinks these technologies are a good idea ..read more

Cryptographic flaws still matter. Here’s a flaw in the random-number generator used to create private keys. The seed has only 32 bits of entropy. Seems like this flaw is being exploited in the wild ..read more

News: Researchers at Russian cybersecurity firm Kaspersky today revealed that they identified a small number of cryptocurrency-focused firms as at least some of the victims of the 3CX software supply-chain attack that’s unfolded over the past week. Kaspersky declined to name any of those victim companies, but it notes that they’re based in “western Asia.” Security firms CrowdStrike and SentinelOne last week pinned the operation on North Korean hackers, who compromised 3CX installer software that’s used by 600,000 organizations worldwide, according to the vendor. Despite the potentially massiv ..read more

Nicholas Weaver wrote an excellent paper on the problems of cryptocurrencies and the need to regulate the space—with all existing regulations. His conclusion: Regulators, especially regulators in the United States, often fear accusations of stifling innovation. As such, the cryptocurrency space has grown over the past decade with very little regulatory oversight. But fortunately for regulators, there is no actual innovation to stifle. Cryptocurrencies cannot revolutionize payments or finance, as the basic nature of all cryptocurrencies render them fundamentally unsuitable to revolutionize our ..read more

Chainalysis reports that worldwide ransomware payments were down in 2022. Ransomware attackers extorted at least $456.8 million from victims in 2022, down from $765.6 million the year before. As always, we have to caveat these findings by noting that the true totals are much higher, as there are cryptocurrency addresses controlled by ransomware attackers that have yet to be identified on the blockchain and incorporated into our data. When we published last year’s version of this report, for example, we had only identified $602 million in ransomware payments in 2021. Still, the trend is clear ..read more

Maintaining bitcoin and other cryptocurrencies causes about 0.3 percent of global CO2 emissions. That may not sound like a lot, but it’s more than the emissions of Switzerland, Croatia, and Norway combined. As many cryptocurrencies crash and the FTX bankruptcy moves into the litigation stage, regulators are likely to scrutinize the cryptocurrency world more than ever before. This presents a perfect opportunity to curb their environmental damage. The good news is that cryptocurrencies don’t have to be carbon intensive. In fact, some have near-zero emissions. To encourage polluting currencies to ..read more

Stewart Baker discusses why the industry-norm responsible disclosure for software vulnerabilities fails for cryptocurrency software. Why can’t the cryptocurrency industry solve the problem the way the software and hardware industries do, by patching and updating security as flaws are found? Two reasons: First, many customers don’t have an ongoing relationship with the hardware and software providers that protect their funds­—nor do they have an incentive to update security on a regular basis. Turning to a new security provider or using updated software creates risks; leaving everything the wa ..read more

Cloudflare is reporting a large DDoS attack against an unnamed company “operating a crypto launchpad.” While this isn’t the largest application-layer attack we’ve seen, it is the largest we’ve seen over HTTPS. HTTPS DDoS attacks are more expensive in terms of required computational resources because of the higher cost of establishing a secure TLS encrypted connection. Therefore it costs the attacker more to launch the attack, and for the victim to mitigate it. We’ve seen very large attacks in the past over (unencrypted) HTTP, but this attack stands out because of the resources it required at ..read more

Beanstalk Farms is a decentralized finance project that has a majority stake governance system: basically people have proportional votes based on the amount of currency they own. A clever hacker used a “flash loan” feature of another decentralized finance project to borrow enough of the currency to give himself a controlling stake, and then approved a $182 million transfer to his own wallet. It is insane to me that cryptocurrencies are still a thing ..read more