The flaw, a software bug that rendered the service's authentication mechanism non-functional, only took five minutes to fix, once it was discovered.
Over 25 million customers store their files online with Dropbox, but only a few of those accounts showed activity during the four hour window of vulnerability. "A very small number of users (much less than 1 percent) logged in during that period, some of whom could have logged into an account without the correct password," said Dropbox co-founder and CTO Arash Ferdowsi, in a blog post. "As a precaution, we ended all logged in sessions."
Ferdowsi said that his company is investigating the incident and will notify account holders if any unusual activity is identified during the time when accounts were unprotected. An update to Ferdowsi's blog post indicates that these notifications have been sent out.
The issue was made public by security researcher Christopher Soghoian, who received a tip from a Dropbox user.
In May, Soghoian filed a complaint against Dropbox with the Federal Trade Commission alleging that the company's security claims have been deceptive. Previously, Dropbox had advertised that "All files stored on Dropbox servers are encrypted (AES-256) and are inaccessible without your account password." In April, the company altered its claims to make it clear that Dropbox, rather than the account holder, controls the file encryption keys, thereby enabling Dropbox to provide access to account holders' files when presented with lawful demands from authorities.
In March, the security of Dropbox's Android mobile client came under fire when security researcher Mike Cardwell revealed that the app was transmitting file metadata without SSL encryption.
The following month, Ferdowsi and Drew Houston, co-founder and CEO, explained that they had decided to favor performance over security because "enabling SSL for all metadata transfers made the app several times slower." They also acknowledged Cardwell's concerns and said they were working on a way to send metadata over SSL more efficiently in their mobile apps.
Dropbox's users have made their displeasure about Sunday's incident known in a series of comments appended to Ferdowsi's blog post. Many have said they plan to seek alternative cloud storage services.
As if on cue, Wuala, a competing cloud storage service operated by hard disk maker La Cie, published a blog post on Tuesday stating that Dropbox's problems wouldn't be an issue if files were encrypted by the client. "Encrypting your files before they are sent to the cloud makes Wuala inherently more secure than solutions that rely on server-side encryption," the company said.
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