“Leaky” cryptocurrency exchanges: analysts of Group‑IB record a massive surge of user data leaks

Group-IB, an international company specializing in preventing cyberattacks and developing information security solutions, has investigated user data leaks from cryptocurrency exchanges and has analyzed the nature of these incidents. Within a year, the number of data leaks soared by 369%. The USA, Russia and China are TOP-3 countries in which registered users became the victims of cyberattacks.

In 2017, when cryptocurrencies were gaining momentum, their record-breaking capitalization and a spike in Bitcoin’s exchange rate led to dozens of attacks on cryptocurrency services. Based on data obtained from the Group-IB Threat Intelligence (cyber intelligence) system, experts from the international company Group-IB have analyzed the theft of 720 user accounts (logins and passwords) from the 19 largest cryptocurrency exchanges

January holidays for hackers: a 689% surge in the number of leaks

The company’s report shows a steady increase in the number of compromised user accounts on cryptocurrency exchanges. In 2017, their number increased by 369% compared to 2016. The first month of 2018 set a record: due to growing interest in cryptocurrencies and the blockchain industry, in January the number of incidents jumped by 689% compared to the 2017 monthly average. The USA, Russia and China are the countries where users are targeted most often. The study has shown that every third victim of the attack is located in the United States.

Toolkit and infrastructure used for attacks

Experts of Group-IB have identified 50 active botnets used for launching cyberattacks on cryptocurrency exchanges users. The infrastructure used by cybercriminals is mainly based in the USA (56.1%), the Netherlands (21.5%), Ukraine (4.3%) and Russia (3.2%).

The attackers use an increasingly wide range of malicious software and update their tools on a regular basis. The most frequently used malicious software includes Trojans such as AZORult and Pony Formgrabber, as well as the Qbot. At the same time, cybercriminals have modified tools previously used for attacks on banks and now successfully use them to hack cryptocurrency exchanges and gain access to users’ personal data.

What makes a successful attack possible?

This is one of the key issues covered in the Group-IB report. The answer is actually quite simple: disregard for information security and underestimating the capabilities of cybercriminals. The first and main cause is that both users and exchanges omit to use two-factor authentication. The second cause is disregard for basic security rules such as the use of complex and unique passwords.
Group-IB has analyzed 720 accounts and found that one out of five users chose a password shorter than 8 characters (see Figure).

Attack as a premonition

Experts of Group-IB draw a bleak conclusion: currently no cryptocurrency exchange, regardless of its size and track record, can guarantee absolute security to its users. At least 5 out of 19 exchanges in question fell victim to targeted cyberattacks widely covered by the media. These are Bitfinex, Bithumb, Bitstamp, HitBTC, Poloniex and, presumably, Huobi. There are various attack vectors: errors in the source code of the software, phishing attacks, unauthorized access to the user database, vulnerabilities related to storage and withdrawal of funds. However, all of them stem from the lack of attention to information security and protection of digital assets.

Increased fraudulent activity and attention of hacker groups to cryptoindustry, additional functional of malicious software related to cryptocurrencies, as well as the significant amounts of already stolen funds signals that the industry is not ready to defend itself and protect its users. In 2018 we will see even more incidents. This situation requires prompt and effective response of all stakeholders, including experts in different areas.

Руслан Юсуфов
Ruslan Yusufov

Director for Special Projects, Group-IB

Recommendations of Group-IB experts to users and exchanges

In order to protect one’s funds against crypto-fraud, Group-IB recommends users to be mindful of their passwords (which should contain at least 14 unique symbols), never use the same passwords for different exchanges and always enable the 2FA (two-factor authentication). Experts recommend avoiding the use of public Wi-Fi (at least when carrying out exchange transactions) and paying special attention to one’s «traces» on the social media. For instance, users should not demonstrate the fact that they possess any cryptocurrency.

Recommendations to cryptoexchanges are also of high importance. First of all, they are strongly advised to make two-factor authentication obligatory for all the users and their operations, conduct regular security audits of IT infrastructure and related services, and allocate resources to training and awareness-raising concerning personnel security, starting from top management (founders) and down to rank-and-file employees. To improve the cybersecurity of cryptocurrency exchanges, experts also recommend installing Anti-APT solutions, using Threat Intelligence and implementing anti-fraud solutions, as well as behavioral analysis systems. Specialists also suggest preparing cybersecurity incident response plans which will minimize potential damage.

About Group-IB

Group-IB, with its headquarters in Singapore, is one of the leading providers of solutions dedicated to detecting and preventing cyberattacks, identifying online fraud, investigating high-tech crimes, and protecting intellectual property. The company’s Threat Intelligence and Research Centers are located in the Middle East (Dubai), the Asia-Pacific (Singapore), and Europe (Amsterdam).

Group-IB’s Unified Risk Platform is an ecosystem of solutions that understands each organization’s threat profile and tailors defenses against them in real-time from a single interface. The Unified Risk Platform provides complete coverage of the cyber response chain. Group-IB’s products and services consolidated in Group-IB’s Unified Risk Platform include Group-IB’s Threat IntelligenceManaged XDRDigital Risk ProtectionFraud ProtectionAttack Surface ManagementBusiness Email ProtectionAudit & ConsultingEducation & TrainingDigital Forensics & Incident ResponseManaged Detection & Response, and Cyber Investigations.

Group-IB’s technological leadership and R&D capabilities are built on the company’s 19 years of hands-on experience in cybercrime investigations worldwide and more than 70,000 hours of cybersecurity incident response accumulated in our leading DFIR Laboratory, High-Tech Crime Investigations Department, and round-the-clock CERT-GIB.

Group-IB is an active partner in global investigations led by international law enforcement organizations such as Europol and INTERPOL. Group-IB is also a member of the Europol European Cybercrime Centre’s (EC3) Advisory Group on Internet Security, which was created to foster closer cooperation between Europol and its leading non-law enforcement partners.

Group-IB’s experience in threat hunting and cyber intelligence has been fused into an ecosystem of highly sophisticated software and hardware solutions designed to monitor, identify, and prevent cyberattacks. Group-IB’s mission is to protect its clients in cyberspace every day by creating and leveraging innovative solutions and services.

Group-IB’s experience in threat hunting and cyber intelligence has been fused into an ecosystem of highly sophisticated software and hardware solutions designed to monitor, identify, and prevent cyberattacks. Group-IB’s mission is to fight high-tech crime while protecting our clients in cyberspace and helping them achieve their goals. To do so, we analyze cyber threats, develop our infrastructure to monitor them, respond to incidents, investigate complex high-tech crimes, and design unique technologies, solutions, and services to counteract adversaries.