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Bitcoin Exchange Bitfinex Says It Was Hacked, Roughly $60M Stolen (reuters.com)
An anonymous reader quotes a report from Reuters: Hong Kong-based digital currency exchange Bitfinex said late on Tuesday it has suspended trading on its exchange after it discovered a security breach, according to a company statement on its website. The company said it has also suspended deposits and withdrawals of digital currencies from the exchange. "We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen," the company said. "We are undertaking a review to determine which users have been affected by the breach. While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up." The company said it has reported the theft to law enforcement. It said it has not yet determined the value of digital currencies stolen from customer accounts. CoinDesk reports that the company confirmed roughly 120,000 BTC (more than $60 million) has been stolen via social media. "In response, bitcoin prices fell to $560.16 by 19:30 UTC, $530 by 23:30 and $480 at press time, CoinDesk USD Bitcoin Price Index (BPI) data reveals," reports CoinDesk. "This price was roughly 20% lower than the day's opening of $607.37 and 27% below the high of $658.28 reached on Saturday, July 30th, when the digital currency began pushing lower."
I feel like I've heard this story before, from other BitCoin exchanges. I'm sure these guys are super honest and trustworthy, though.
I'm shocked!!
Shocked that there's gambling going on in this establishment.
I'm still LOLing at the BitCrap apologists today...
Another "hacked" exchange, another XX million in "secure digital currency" lost to the ether -- or perhaps a bitexchange's owner?
What?!
The users upload their wallets to the site and keep them there?
It doesn't use real bitcoins?
If they were only offering the trading then how can someone have THEIR money stolen? Isn't it THEIR bitcoins and whatever other currency which they use as an intermediate / medium for faster transactions if any which was stolen?
Amirite?
YET ANOTHER exchange get's taken to the cleaners and looses scads of other folk's coin? Fools and their money are too soon parted.
For Pete's sake folks, DON'T keep your coin on deposit on some exchange, either buy something or convert it back into cash because *all* digital currency things are hacking magnets... And what do you think the hackers do with your coins when they steal them? Why they convert them to cash or buy something ASAP...
Would you keep your money in a bank if they kept getting robbed and YOU where the one who lost? Or if you kept gold coins in their vault and it kept getting broken into would you keep your coins there? No way. So why keep your BitCoin someplace where somebody else provides the security and YOU take the risk? Keep them on your own devices OFF LINE, until you need to use them.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
I used to store coins on exchanges so I could do margin trading for fun. Fortunately, I missed the mt gox failure, but lost some funds when bter was hacked, I fortunately did not lose any when mintpal went down. Then i lost over 5btc when cryspty failed and decided to give up and pulled all my funds to a cold storage wallet. Thankfully I did not lose on this bitfinex exchange hack. I think pretty much the only exchange that I used that has yet to be hacked is btce and poloniex.
That's just another nail in the bitcoin coffin. The fad died down a while ago, now we just need the hardcore bitcoin users to realize how stupid they are for wasting actual money on some imaginary currency that has no real value if the "market" crashes tomorrow.
The top idea floated thus far: Bullshitcoin
Let's all hope this was ransomware proceeds.
.... by me...
Thanks for your $60M though
I've already sold it and I'll use that money to buy more bitcoin in a few days time, after the temporary crash in value when we tell everyone about it..
Really it's not even a RISK that you MIGHT lose your money in bitcoin, it is virtually guaranteed if you hold bitcoin long enough. Bitcoin depends on the security of the SHA-2 hash algorithm. Once SHA-2 is broken, everyone can generate all the BTC they want easily, sending the value to zero.
There have been dozens of hash algorithms. A few which have been popular over the years include RIPEMD, MD5, DES-based (crypt()), SHA-0, SHA-1, and now SHA-2. The first four listed have all been cracked. SHA-1 is mostly cracked and SHA-2 about 35% cracked. Betting that SHA-2 will be the first hash function in history to not be cracked, by holding Bitcoin, is an awefully optimistic bet. Presumably these are the same people who keep thinking you can make uncrackable DRM. Everything is cracked, and when SHA-2 is cracked the rest of the way there goes any value Bitcoin had.
1849. hahahahahaha
Really it's not even a RISK that you MIGHT lose your money in bitcoin, it is virtually guaranteed if you hold bitcoin long enough. Bitcoin depends on the security of the SHA-2 hash algorithm. Once SHA-2 is broken, everyone can generate all the BTC they want easily, sending the value to zero.
That's a very good point.
I'm curious to know what the Bitcoin enthusiasts have to say about this eventuality, because you're right: sooner or later, SHA-2 will be cracked.
Just cruising through this digital world at 33 1/3 rpm...
Let me guess - PHP
This probably happens all the time in real banks, given how antiquated their IT systems are. You just don't hear about it, because the bank doesn't want to undermine your confidence, and can ask the Federal Reserve to bail them out. Not so with Bitcoin.
It injects a much needed note of caution and realism into the dream of technologically focused, realism-challenged (and therefore irresponsible) amateur social engineers.
You see, a large part of the appeal of bitcoin comes from its aura of "under the radar", "the authorities need never find out" financial transactions.
This holds an attraction for several groups, of which two are problematic: outright criminals and their "lets-dodge-the-system" libertarian cousins.
I believe that outright criminals like the possibility of doing financial transactions without giving out your real name. Think "dark net" transactions involving in cybercrime services, malware, botnet control, stolen data, stolen credentials, drugs, weapons, etc. Think suppliers in "Silk Road" transactions.
I think that "lets-dodge-the-system" libertarians, who often figure as end-users of illegal goods and services are attracted to the possibility of doing "under the radar" financial transactions for the same reason: their real name can be kept undisclosed. In part they're happy to purchase illegal goods, in part they're ideologically motivated (as in "we need to grow alternative economy that's outside "government" or "system" control because all government is bad and "the system" is designed to screw us over").
For the first group (criminals) I believe it serves as a useful deterrent, or at least a risk and a complication.
For the second group it serves as a salutary reminder that their fellow citizens are at least as reprehensible as "the government" and just as capable of screwing them over as any "institution". After all, the institutions we have have evolved over several centuries, if not millennia, to strike a balance between freedom, safeguards, responsibility, accountability and free-for-all banditry. Something that starry-eyed, technology fixated "bash-the-system" enthusiasts will only appreciate if hammered home by personal or close-to-personal experience.
Where and how new technologies like bitcoin should fit into our society remains to be seen (and experimentally determined). However, our existing institutions have very real merits and safeguards that have evolved because of human nature itself. Such safeguards (which we all too often take for granted) are lacking from new technological developments and are just as important as the basic functionality. A reminder of which can only be positive.
Or, if you were really concerned, you could just Google it: https://eprint.iacr.org/2016/167.pdf
"Broken SHA256: For a broken SHA256, meaningful
collisions or pre-images suggest that new transactions
should not be accepted. However, as we saw in Sec-
tion 4.3, unless a broken hash results in majority power,
an adversary cannot alter historical blocks or transactions.
The same can be said for hard-coding known public keys
with unspent outputs: even if the adversary gets a differ-
ent key that hashes to the same value, deriving the private
key should be infeasible if the signature scheme is still
strong. The plans for SHA256 thus seem to be more pru-
dent than necessary, but since they necessitate a hard fork,
rehashing the entire blockchain to add new checkpoints
or hardcoding public keys can only increase the security
of the transition period, but perhaps at a cost of efficiency."
A little plain-english translation would also be, that BitCoin and other cryptocurrencies (As well as, arguably, the security of every credit card in your pocket and bank transaction and online login and...) doesn't rely on the hash being "unbreakable", it just relies on it being non-trivial, and barring a general quntum computer, we know it to be non-trivial. In fact, the credit-card in your pocket is more vulnerable to single hash being broken, and the whole working principle of BitCoin (mining) is "cracking SHA-2".
The threat-model for BitCoin isn't that the hash will be broken, but that it will become significantly easier for one party; this is a special case of the general majority-hashing-power threat, where the "adversary" covertly through subterfuge or technology obtains majority hashing power. This in fact has happened before (Multiple times at least if you include Satoshi Nakamoto himself) and the world didn't come to an end.
This is not to say that I'm a BitCoin enthusiast, or even that I'm saying it's unbreakable, I'm just saying it's far more complicated and also analyzed, at least by other people than the BitCoin core developers, than a simple "OMGZORZS they gonna crack da hash!!!!111" :)
If they were paying attention, they would probably say that can switch to a new version which uses SHA-3 or another hash. That's true IF they make the switch BEFORE SHA-2 is broken the rest of the way.
However, five years ago, in 2011, a preimage attack was demonstrated 52 out of 64 rounds. It's ALREADY half broken, so the next step will probably be a complete compromise and there is no indication that BTC intends to upgrade before they are fucked.
A preimage may not break some applications that have long inputs, but for a short input like BTC uses, the preimage result will very likely be the desired bytes.
Do you guys actually care about this stuff? Can't you see that Bitcoin currently has NO utility, outside of buying illegal items? And that the whole thing is an unregulated currency which will be plagued by all the problem they created regulations for?
Exchanges getting hacked ( or "hacked") is going to remain routine until there's some big change. Until then, why waste your time and your attention on these stories?
If SHA got broken and someone started hacking it, then the admins would probably refuse to checkpoint the chain block that contained the transfers, so it would never be accepted. They could even checkpoint a sidechain where nothing happened.
Of course, that would amount to political control of the currency, but when the alternative is the whole coin falling apart, what do you think will be stronger? Pragmatism or ideology?
Presumably these are the same people who keep thinking you can make uncrackable DRM.
I don't disagree with your post in general, but there actually is uncrackable DRM. Nobody yet has cracked Cinavia protection for Blu Ray discs. Cinavia is an audio watermark that is optional for Blu Ray and DVD discs. No player is required to support it for DVD but all Blu Ray players are now required to support it on Blu Ray discs. It's expensive so it's not used by most studios. Now there is one company (DVD Ranger I think) who claims they cracked it but testing showed that all they did was find a way to replace the audio during ripping with a Cinavia free AC-3 file that they had previous stored on a server somewhere and secretly downloaded it during the ripping process. AnyDVD HD did find a way to put something in rips that causes some PC software players to ignore Cinavia on playback (in theory software players are supposed to detect that the copy or rip has Cinavia and stop playback) but they didn't remove it. To date nobody has found a way to remove it from a disc that has it. All you can do is ignore it or replace it with the audio from another disc (usually DVD) that doesn't have it.
Bitcoin: The ultimate bug bounty program.
nothing of real value was lost, really.
Reports say the thieves made their getaway using a silver, late model laptop
It's a truly spectacular way to take money away from paranoid anti-establishment off-the-grid people.
> doesn't rely on the hash being "unbreakable", it just relies on it being non-trivial, and barring a general quntum computer, we know it to be non-trivial. ... the whole working principle of BitCoin (mining) is "cracking SHA-2".
Indeed Bitcoin is based on the presumption that preimage of a complete SHA-256 is very, very hard - infeasible. The difficulty level is how many bits of the hash need to match. Unfortunately, it's not true that "we know it to be non-trivial". We have strong evidence that there IS an attack which makes it easy. In 2012 Sony demonstrated an attack on 52 rounds. Extending that to the full 64 rounds is exceedingly likely. It's just a matter of when someone wants to put in the time AND go public with the results. I'd be surprised if ONI or NSA hasn't already extended it past 52 rounds, if they aren't at perhaps 60 rounds, just four left to go.
"Protected" Blu Ray discs do in fact get copied. So it is not an uncrackable DRM.
> there is one company (DVD Ranger I think) who claims they cracked it but testing showed that all they did was find a way to replace the audio during ripping with a Cinavia free AC-3 file
Maybe. Unless you can point to some updated information, people *speculated* that *maybe* that's what DVD Ranger does. DVD Ranger said no, they remove it. We can't be sure. However later, in 2015, Slysoft was removing it, and I haven't seen even speculation that they weren't.
I suspect most people looking at it may have made it too complicated. As you know, all Blu Ray players after a certain date are required to be able to read the Cinavia water mark, which is in the analog audio signal so that it plugs the "analog hole". One bit of digital mark takes five seconds of audio. Anyway, the point is you can get the reader code out of any firmware update to a Blu Ray enabled device - the format of the watermark isn't a secret. We know that to embed an "A" bit you apply the function to the audio in one direction, for the opposite bit ^A the opposite direction. (I'm using A and ^A rather than 0 and 1 to avoid confusing 0 with the original audio).
It should therefore be quite possible to add your own Cinavia watermark to the audio. Suppose the "theatrical release only" bits are AA^AA^A^AA. You could probably embed those bits yourself, right, given that you have access to the code that reads them? Similarly, you should be able to embed the bits ^A^AA^AAA^A - the opposite bits. When the detector finds that the signal is neither A nor ^A, but halfway in between, that's going to look a lot like the original audio - like there never was any Cinavia watermark. I haven't actually coded that and tested it, but that general approach seems like it will likely work, when someone does it.