Attacks/Breaches
12/4/2013
01:41 PM
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Bitcoin Password Grab Disguised As DDoS Attack

Attacks against bitcoin users continue, as online forum Bitcointalk.org warns users their passwords might have been stolen in distributed denial of service hack.

Aficionados of the cryptographic currency known as Bitcoin might have gotten more than they bargained for recently, after a distributed denial-of-service (DDoS) attack appeared to be used as a smokescreen for launching a password-stealing attack against users of Bitcointalk.org.

Michael Marquardt (a.k.a. "Theymos"), one of the administrators of the popular bitcoin discussion forum, Sunday warned its 176,584 members of the attack. He said the attack had been traced to a flaw in the systems of domain registration firm AnonymousSpeech, which specializes in anonymous email, as well as running hosting servers outside the United States and the European Union. Attackers hacked AnonymousSpeech to change the bitcoin discussion forum's DNS settings to an attacker-controlled server.

According to Marquardt, the DNS redirection attack was spotted Sunday by forum manager Malmi Martti (a.k.a. Sirius), who immediately moved the domain to a different registrar. "However, such changes take about 24 hours to propagate," he warned, meaning that users remained at risk unless they logged on to the forum using its IP address, rather than trusting domain name servers to resolve to the non-malicious site.

[ Related article: Bitcoin Thefts Surge, DDoS Hackers Take Millions. ]

What was the risk to forum users? "Because the HTTPS protocol is pretty terrible, this alone could have allowed the attacker to intercept and modify encrypted forum transmissions, allowing them to see passwords sent during login, authentication cookies, [personal messages], etc.," Marquardt said. "Your password only could have been intercepted if you actually entered it while the forum was affected. I invalidated all security codes, so you're not at risk of having your account stolen if you logged in using the 'remember me' feature without actually entering your password."

In other words, anyone who logged into the forum between Sunday and Monday, and who entered a password, should assume that it was compromised by attackers.

What were the bitcoin forum attackers gunning for? The most likely explanation would be participants' usernames and passwords, which -- if reused on other sites -- might have allowed attackers to drain people's online bitcoin wallets. Likewise, attackers might have been interested in gathering email addresses of people who are interested in bitcoins to target them -- via phishing attacks -- with malware designed to find and steal bitcoins from their PCs.

Source: Casascius.com

The DNS hack and DDoS attack against Bitcointalk are just the latest exploits in a long string of attacks targeting bitcoin e-wallet services and payment systems. Last month, Denmark-based bitcoin payment processor Bitcoin Internet Payment System suffered a DDoS attack that allowed the attackers to hide their real target: online wallets storing 1,295 bitcoins, which they successfully stole. At the time, their haul was valued at nearly $1 million.

As that haul suggests, the rise in bitcoin-related attacks can be attributed to the bitcoin bubble, which has seen the value of the cryptographic currency rise from a low of $1 per bitcoin in 2011, to $1,200 per bitcoin as of Wednesday.

The rise in bitcoin's value has lead to a number of malicious attacks, as well as a rise in efforts of a different nature. Last week, for example, Malwarebytes researcher Adam Kujawa warned in a blog post that a number of free toolbars and search agents have begun including bitcoin-mining software, which can consume massive amounts of system resources, slowing PCs to a crawl.

Bitcoin mining isn't inherently suspect. In fact, it's crucial to the success of bitcoins, because it's what records the chain of bitcoin transactions. Furthermore, the bitcoin system is set up to reward -- with bitcoins -- anyone who successfully solves related cryptographic puzzles that help maintain the public bitcoin ledger known as the "block chain." But some people have begun turning PCs into nodes in their personal bitcoin-mining empire, such as online gaming company E-Sports, which was recently hit with a related $325,000 fine by the New Jersey state attorney general's office.

In the case of toolbars and search agents with built-in mining software, however, users who agree to the accompanying end-user license agreement (EULA) might be authorizing a third party to turn their PC into a bitcoin-mining platform. "So take note if your system is running especially slow or if a process is taking up massive amounts of your processing power; it might be malware or even a [potentially unwanted program] running a miner on your system," said Kujawa at Malwarebytes.

"Looks like the bad guys are adapting all of their various technical attacks and business models to the bitcoin world," CounterHack co-founder and SANS Institute hacking instructor Ed Skoudis said in a recent SANS email newsletter, responding to the Malwarebytes report. "Given the stakes for rapid money-making here, we'll surely see even more creative bitcoin-related attacks in the near future."

Advanced persistent threats are evolving in motivation, malice and sophistication. Are you ready to stop the madness? Also in the new, all-digital The Changing Face Of APTs issue of Dark Reading: Governments aren't the only victims of targeted "intelligence gathering." Enterprises need to be on guard, too. (Free registration required.)

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Brian.Dean
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Brian.Dean,
User Rank: Apprentice
12/5/2013 | 2:23:02 PM
Re: Misdirected Ingenuity
@Ariella, yes good point, when bitcoin is pegged to the dollar to pay salaries a bit of the volatility is finished, and that to only during the calculated interval, so if salaries were paid on the 2nd of each month and bitcoin falls in value by 10% by the 15th of the month, employees still lose. However at this point, bitcoin as a currency also finishes and the dollar becomes the prime currency again.

Generally speaking, the holders of capital want stability, overall 1% inflation can be good to create incentives to produce but it also comes with negative things such as money illusion.
Ariella
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Ariella,
User Rank: Apprentice
12/5/2013 | 12:36:32 PM
Re: Misdirected Ingenuity
@Brian exactly, that's why while such high prices make bitcoin appear attractive, in reality, it is detrimental to its use as currency. Before writing an article on bitcoin for CFO, I contacted the companies that made the news for offering to pay employees in bitcoin. One of them admitted that even he gave up on the offer to take a part of the salary in bitcoin when it proved very volatile last spring -- and that kind of movement is nothing compared to what we've seen in the past few weeks. The way he put it was this:

For example for us the payment of salaries as bitcoins want meant to help people spend bitcoins and get into the ecosystem. Now we feel like we are helping our employees to place bets in a casino. Owning and spending a currency that can double or halve its value in a month is very problematic.
Brian.Dean
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Brian.Dean,
User Rank: Apprentice
12/5/2013 | 11:37:27 AM
Re: Misdirected Ingenuity
Ariella, the way I see it is that the more bitcoin is in demand the greater becomes its difficulty, currently $1,000+ per 1 bitcoin shows that it is in high speculative demand. This has created a situation where it is only practical to mine it using ASIC however, the amount of variables that are involved that would allow an ASIC operation to be profitable are just as complex and speculative as would a 'bitcoin trading round' be using dollars, it would be the same as buying a high risk/gain/lose stock. 
samicksha
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samicksha,
User Rank: Apprentice
12/5/2013 | 2:39:39 AM
Re: Misdirected Ingenuity
Essence of Bitcoin is its fees are independent of the amount being sent, which makes it attractive for heavy transactions, but despite of this fact, the use of Bitcoin in the retail and commercial marketplace is relatively small compared with a relatively large use by speculators.
Ariella
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Ariella,
User Rank: Apprentice
12/4/2013 | 7:07:18 PM
Re: Misdirected Ingenuity
@Mathew Originally, the only way to acquire bitcoins was to mine them. Back in the early days, Im told that was a simple enough computational operation. But as the number of bitcoins diminishes, the mining gets that much more involved to the point that special mining rigs are sold for thousands of dollars. Now that bitcoin has reached such a high, some people who had given up mining when the exchange rate was under a $100 because they did not consider the payoff worthwhile may return to it. However, my guess is that the buying and selling that has sent the digital currency skyrocketing is not due to the activity of miners but to speculators who buy and sell the currency without mining. In any case, the way the Bitcoin system works, the block chain always has to clear any transaction in which the currency passes from one wallet to another in order to guard against counterfeit virtual coins. That's why it can take more than 10 minutes for the transactions to clear.
Brian.Dean
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Brian.Dean,
User Rank: Apprentice
12/4/2013 | 3:41:32 PM
Misdirected Ingenuity
If we assume that people that type their user names and passwords rather than using the 'remember me' function are going to be re-using user names and passwords the most, nice model however, extremely misdirected as this sort of ingenuity could have been used to create real value.

And where tool bars are being used to turn private computers into a decentralized mining operation, well again nice model however, it is theft of electricity. The difficulty at which bitcoin is at the moment makes it impractical for anyone to be paying for electricity by hashing through CPUs, GPUs (AMD 7000 series GPUs in particular) are better at hashing and only just manage to break even in terms of electricity usage and coins produced (hardware costs and overheads excluded). Either way, it is still electricity theft, create a decentralized cloud, give customers value and that is when I would appreciate this model.

My point is that individuals should also check their GPU utilization because most probably these tool bars are going to want GPU resources.    
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