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On Jan. 9, 2024, U.S. authorities arrested a 19-year-old Florida man charged with wire fraud, aggravated identity theft, and conspiring with others to use SIM-swapping to steal cryptocurrency. Sources close to the investigation tell KrebsOnSecurity the accused was a key member of a criminal hacking group blamed for a string of cyber intrusions at major U.S. technology companies during the summer of 2022.
A graphic depicting how 0ktapus leveraged one victim to attack another. Image credit: Amitai Cohen of Wiz.
Prosecutors say Noah Michael Urban of Palm Coast, Fla., stole at least $800,000 from at least five victims between August 2022 and March 2023. In each attack, the victims saw their email and financial accounts compromised after suffering an unauthorized SIM-swap, wherein attackers transferred each victim’s mobile phone number to a new device that they controlled.
The government says Urban went by the aliases “Sosa” and “King Bob,” among others. Multiple trusted sources told KrebsOnSecurity that Sosa/King Bob was a core member of a hacking group behind the 2022 breach at Twilio, a company that provides services for making and receiving text messages and phone calls. Twilio disclosed in Aug. 2022 that an intrusion had exposed a “limited number” of Twilio customer accounts through a sophisticated social engineering attack designed to steal employee credentials.
Shortly after that disclosure, the security firm Group-IB published a report linking the attackers behind the Twilio intrusion to separate breaches at more than 130 organizations, including LastPass, DoorDash, Mailchimp, and Plex. Multiple security firms soon assigned the hacking group the nickname “Scattered Spider.”
Group-IB dubbed the gang by a different name — 0ktapus — which was a nod to how the criminal group phished employees for credentials. The missives asked users to click a link and log in at a phishing page that mimicked their employer’s Okta authentication page. Those who submitted credentials were then prompted to provide the one-time password needed for multi-factor authentication.
A booking photo of Noah Michael Urban released by the Volusia County Sheriff.
0ktapus used newly-registered domains that often included the name of the targeted company, and sent text messages urging employees to click on links to these domains to view information about a pending change in their work schedule. The phishing sites used a Telegram instant message bot to forward any submitted credentials in real-time, allowing the attackers to use the phished username, password and one-time code to log in as that employee at the real employer website.
0ktapus often leveraged information or access gained in one breach to perpetrate another. As documented by Group-IB, the group pivoted from its access to Twilio to attack at least 163 of its customers. Among those was the encrypted messaging app Signal, which said the breach could have let attackers re-register the phone number on another device for about 1,900 users.
Also in August 2022, several employees at email delivery firm Mailchimp provided their remote access credentials to this phishing group. According to an Aug. 12 blog post, the attackers used their access to Mailchimp employee accounts to steal data from 214 customers involved in cryptocurrency and finance.
On August 25, 2022, the password manager service LastPass disclosed a breach in which attackers stole some source code and proprietary LastPass technical information, and weeks later LastPass said an investigation revealed no customer data or password vaults were accessed.
However, on November 30, 2022 LastPass disclosed a far more serious breach that the company said leveraged data stolen in the August breach. LastPass said criminal hackers had stolen encrypted copies of some password vaults, as well as other personal information.
In February 2023, LastPass disclosed that the intrusion involved a highly complex, targeted attack against a DevOps engineer who was one of only four LastPass employees with access to the corporate vault. In that incident, the attackers exploited a security vulnerability in a Plex media server that the employee was running on his home network, and succeeded in installing malicious software that stole passwords and other authentication credentials. The vulnerability exploited by the intruders was patched back in 2020, but the employee never updated his Plex software.
As it happens, Plex announced its own data breach one day before LastPass disclosed its initial August intrusion. On August 24, 2022, Plex’s security team urged users to reset their passwords, saying an intruder had accessed customer emails, usernames and encrypted passwords.
A review of thousands of messages that Sosa and King Bob posted to several public forums and Discord servers over the past two years shows that the person behind these identities was mainly focused on two things: Sim-swapping, and trading in stolen, unreleased rap music recordings from popular artists.
Indeed, those messages show Sosa/King Bob was obsessed with finding new “grails,” the slang term used in some cybercrime discussion channels to describe recordings from popular artists that have never been officially released. It stands to reason that King Bob was SIM-swapping important people in the music industry to obtain these files, although there is little to support this conclusion from the public chat records available.
“I got the most music in the com,” King Bob bragged in a Discord server in November 2022. “I got thousands of grails.”
King Bob’s chats show he was particularly enamored of stealing the unreleased works of his favorite artists — Lil Uzi Vert, Playboi Carti, and Juice Wrld. When another Discord user asked if he has Eminem grails, King Bob said he was unsure.
“I have two folders,” King Bob explained. “One with Uzi, Carti, Juicewrld. And then I have ‘every other artist.’ Every other artist is unorganized as fuck and has thousands of random shit.”
King Bob’s posts on Discord show he quickly became a celebrity on Leaked[.]cx, one of most active forums for trading, buying and selling unreleased music from popular artists. The more grails that users share with the Leaked[.]cx community, the more their status and access on the forum grows.
The last cache of Leaked dot cx indexed by the archive.org on Jan. 11, 2024.
And King Bob shared a large number of his purloined tunes with this community. Still others he tried to sell. It’s unclear how many of those sales were ever consummated, but it is not unusual for a prized grail to sell for anywhere from $5,000 to $20,000.
In mid-January 2024, several Leaked[.]cx regulars began complaining that they hadn’t seen King Bob in a while and were really missing his grails. On or around Jan. 11, the same day the Justice Department unsealed the indictment against Urban, Leaked[.]cx started blocking people who were trying to visit the site from the United States.
Days later, frustrated Leaked[.]cx users speculated about what could be the cause of the blockage.
“Probs blocked as part of king bob investigation i think?,” wrote the user “Plsdontarrest.” “Doubt he only hacked US artists/ppl which is why it’s happening in multiple countries.”
On Sept. 21, 2022, KrebsOnSecurity told the story of a “Foreshadow,” the nickname chosen by a Florida teenager who was working for a SIM-swapping crew when he was abducted, beaten and held for a $200,000 ransom. A rival SIM-swapping group claimed that Foreshadow and his associates had robbed them of their fair share of the profits from a recent SIM-swap.
In a video released by his abductors on Telegram, a bloodied, battered Foreshadow was made to say they would kill him unless the ransom was paid.
As I wrote in that story, Foreshadow appears to have served as a “holder” — a term used to describe a low-level member of any SIM-swapping group who agrees to carry out the riskiest and least rewarding role of the crime: Physically keeping and managing the various mobile devices and SIM cards that are used in SIM-swapping scams.
KrebsOnSecurity has since learned that Foreshadow was a holder for a particularly active SIM-swapper who went by “Elijah,” which was another nickname that prosecutors say Urban used.
Shortly after Foreshadow’s hostage video began circulating on Telegram and Discord, multiple known actors in the SIM-swapping space told everyone in the channels to delete any previous messages with Foreshadow, claiming he was fully cooperating with the FBI.
This was not the first time Sosa and his crew were hit with violent attacks from rival SIM-swapping groups. In early 2022, a video surfaced on a popular cybercrime channel purporting to show attackers hurling a brick through a window at an address that matches the spacious and upscale home of Urban’s parents in Sanford, Fl.
“Brickings” are among the “violence-as-a-service” offerings broadly available on many cybercrime channels. SIM-swapping and adjacent cybercrime channels are replete with job offers for in-person assignments and tasks that can be found if one searches for posts titled, “If you live near,” or “IRL job” — short for “in real life” job.
A number of these classified ads are in service of performing brickings, where someone is hired to visit a specific address and toss a brick through the target’s window. Other typical IRL job offers involve tire slashings and even drive-by shootings.
Sosa was known to be a top member of the broader cybercriminal community online known as “The Com,” wherein hackers boast loudly about high-profile exploits and hacks that almost invariably begin with social engineering — tricking people over the phone, email or SMS into giving away credentials that allow remote access to corporate internal networks.
Sosa also was active in a particularly destructive group of accomplished criminal SIM-swappers known as “Star Fraud.” Cyberscoop’s AJ Vicens reported last year that individuals within Star Fraud were likely involved in the high-profile Caesars Entertainment an MGM Resorts extortion attacks.
“ALPHV, an established ransomware-as-a-service operation thought to be based in Russia and linked to attacks on dozens of entities, claimed responsibility for Caesars and MGM attacks in a note posted to its website earlier this month,” Vicens wrote. “Experts had said the attacks were the work of a group tracked variously as UNC 3944 or Scattered Spider, which has been described as an affiliate working with ALPHV made up of people in the United States and Britain who excel at social engineering.”
In February 2023, KrebsOnSecurity published data taken from the Telegram channels for Star Fraud and two other SIM-swapping groups showing these crooks focused on SIM-swapping T-Mobile customers, and that they collectively claimed access to T-Mobile on 100 separate occasions over a 7-month period in 2022.
The SIM-swapping groups were able to switch targeted phone numbers to another device on demand because they constantly phished T-Mobile employees into giving up credentials to employee-only tools. In each of those cases the goal was the same: Phish T-Mobile employees for access to internal company tools, and then convert that access into a cybercrime service that could be hired to divert any T-Mobile user’s text messages and phone calls to another device.
Allison Nixon, chief research officer at the New York cybersecurity consultancy Unit 221B, said the increasing brazenness of many Com members is a function of how long it has taken federal authorities to go after guys like Sosa.
“These incidents show what happens when it takes too long for cybercriminals to get arrested,” Nixon said. “If governments fail to prioritize this source of threat, violence originating from the Internet will affect regular people.”
The Daytona Beach News-Journal reports that Urban was arrested Jan. 9 and his trial is scheduled to begin in the trial term starting March 4 in Jacksonville. The publication said the judge overseeing Urban’s case denied bail because the defendant was a strong flight risk.
At Urban’s arraignment, it emerged that he had no fixed address and had been using an alias to stay at an Airbnb. The judge reportedly said that when a search warrant was executed at Urban’s residence, the defendant was downloading programs to delete computer files.
What’s more, the judge explained, despite telling authorities in May that he would not have any more contact with his co-conspirators and would not engage in cryptocurrency transactions, he did so anyway.
Urban entered a plea of not guilty. Urban’s court-appointed attorney said her client would have no comment at this time.
Prosecutors charged Urban with eight counts of wire fraud, one count of conspiracy to commit wire fraud, and five counts of aggravated identity theft. According to the government, if convicted Urban faces up to 20 years in federal prison on each wire fraud charge. He also faces a minimum mandatory penalty of two years in prison for the aggravated identity offenses, which will run consecutive to any other prison sentence imposed.
The password manager service LastPass is now forcing some of its users to pick longer master passwords. LastPass says the changes are needed to ensure all customers are protected by their latest security improvements. But critics say the move is little more than a public relations stunt that will do nothing to help countless early adopters whose password vaults were exposed in a 2022 breach at LastPass.
LastPass sent this notification to users earlier this week.
LastPass told customers this week they would be forced to update their master password if it was less than 12 characters. LastPass officially instituted this change back in 2018, but some undisclosed number of the company’s earlier customers were never required to increase the length of their master passwords.
This is significant because in November 2022, LastPass disclosed a breach in which hackers stole password vaults containing both encrypted and plaintext data for more than 25 million users.
Since then, a steady trickle of six-figure cryptocurrency heists targeting security-conscious people throughout the tech industry has led some security experts to conclude that crooks likely have succeeded at cracking open some of the stolen LastPass vaults.
KrebsOnSecurity last month interviewed a victim who recently saw more than three million dollars worth of cryptocurrency siphoned from his account. That user signed up with LastPass nearly a decade ago, stored their cryptocurrency seed phrase there, and yet never changed his master password — which was just eight characters. Nor was he ever forced to improve his master password.
That story cited research from Adblock Plus creator Wladimir Palant, who said LastPass failed to upgrade many older, original customers to more secure encryption protections that were offered to newer customers over the years.
For example, another important default setting in LastPass is the number of “iterations,” or how many times your master password is run through the company’s encryption routines. The more iterations, the longer it takes an offline attacker to crack your master password.
Palant said that for many older LastPass users, the initial default setting for iterations was anywhere from “1” to “500.” By 2013, new LastPass customers were given 5,000 iterations by default. In February 2018, LastPass changed the default to 100,100 iterations. And very recently, it upped that again to 600,000. Still, Palant and others impacted by the 2022 breach at LastPass say their account security settings were never forcibly upgraded.
Palant called this latest action by LastPass a PR stunt.
“They sent this message to everyone, whether they have a weak master password or not – this way they can again blame the users for not respecting their policies,” Palant said. “But I just logged in with my weak password, and I am not forced to change it. Sending emails is cheap, but they once again didn’t implement any technical measures to enforce this policy change.”
Either way, Palant said, the changes won’t help people affected by the 2022 breach.
“These people need to change all their passwords, something that LastPass still won’t recommend,” Palant said. “But it will somewhat help with the breaches to come.”
LastPass CEO Karim Toubba said changing master password length (or even the master password itself) is not designed to address already stolen vaults that are offline.
“This is meant to better protect customers’ online vaults and encourage them to bring their accounts up to the 2018 LastPass standard default setting of a 12-character minimum (but could opt out from),” Toubba said in an emailed statement. “We know that some customers may have chosen convenience over security and utilized less complex master passwords despite encouragement to use our (or others) password generator to do otherwise.”
A basic functionality of LastPass is that it will pick and remember lengthy, complex passwords for each of your websites or online services. To automatically populate the appropriate credentials at any website going forward, you simply authenticate to LastPass using your master password.
LastPass has always emphasized that if you lose this master password, that’s too bad because they don’t store it and their encryption is so strong that even they can’t help you recover it.
But experts say all bets are off when cybercrooks can get their hands on the encrypted vault data itself — as opposed to having to interact with LastPass via its website. These so-called “offline” attacks allow the bad guys to conduct unlimited and unfettered “brute force” password cracking attempts against the encrypted data using powerful computers that can each try millions of password guesses per second.
A chart on Palant’s blog post offers an idea of how increasing password iterations dramatically increases the costs and time needed by the attackers to crack someone’s master password. Palant said it would take a single high-powered graphics card about a year to crack a password of average complexity with 500 iterations, and about 10 years to crack the same password run through 5,000 iterations.
Image: palant.info
However, these numbers radically come down when a determined adversary also has other large-scale computational assets at their disposal, such as a bitcoin mining operation that can coordinate the password-cracking activity across multiple powerful systems simultaneously.
Meaning, LastPass users whose vaults were never upgraded to higher iterations and whose master passwords were weak (less than 12 characters) likely have been a primary target of distributed password-cracking attacks ever since the LastPass user vaults were stolen late last year.
Asked why some LastPass users were left behind on older security minimums, Toubba said a “small percentage” of customers had corrupted items in their password vaults that prevented those accounts from properly upgrading to the new requirements and settings.
“We have been able to determine that a small percentage of customers have items in their vaults that are corrupt and when we previously utilized automated scripts designed to re-encrypt vaults when the master password or iteration count is changed, they did not complete,” Toubba said. “These errors were not originally apparent as part of these efforts and, as we have discovered them, we have been working to be able to remedy this and finish the re-encryption.”
Nicholas Weaver, a researcher at University of California, Berkeley’s International Computer Science Institute (ICSI) and lecturer at UC Davis, said LastPass made a huge mistake years ago by not force-upgrading the iteration count for existing users.
“And now this is blaming the users — ‘you should have used a longer passphrase’ — not them for having weak defaults that were never upgraded for existing users,” Weaver said. “LastPass in my book is one step above snake-oil. I used to be, ‘Pick whichever password manager you want,’ but now I am very much, ‘Pick any password manager but LastPass.'”
Asked why LastPass isn’t recommending that users change all of the passwords secured by the encrypted master password that was stolen when the company got hacked last year, Toubba said it’s because “the data demonstrates that the majority of our customers follow our recommendations (or greater), and the probability of successfully brute forcing vault encryption is greatly reduced accordingly.”
“We’ve been telling customers since December of 2022 that they should be following recommended guidelines,” Toubba continued. “And if they haven’t followed the guidelines we recommended that they change their downstream passwords.”
In November 2022, the password manager service LastPass disclosed a breach in which hackers stole password vaults containing both encrypted and plaintext data for more than 25 million users. Since then, a steady trickle of six-figure cryptocurrency heists targeting security-conscious people throughout the tech industry has led some security experts to conclude that crooks likely have succeeded at cracking open some of the stolen LastPass vaults.
Taylor Monahan is lead product manager of MetaMask, a popular software cryptocurrency wallet used to interact with the Ethereum blockchain. Since late December 2022, Monahan and other researchers have identified a highly reliable set of clues that they say connect recent thefts targeting more than 150 people. Collectively, these individuals have been robbed of more than $35 million worth of crypto.
Monahan said virtually all of the victims she has assisted were longtime cryptocurrency investors, and security-minded individuals. Importantly, none appeared to have suffered the sorts of attacks that typically preface a high-dollar crypto heist, such as the compromise of one’s email and/or mobile phone accounts.
“The victim profile remains the most striking thing,” Monahan wrote. “They truly all are reasonably secure. They are also deeply integrated into this ecosystem, [including] employees of reputable crypto orgs, VCs [venture capitalists], people who built DeFi protocols, deploy contracts, run full nodes.”
Monahan has been documenting the crypto thefts via Twitter/X since March 2023, frequently expressing frustration in the search for a common cause among the victims. Then on Aug. 28, Monahan said she’d concluded that the common thread among nearly every victim was that they’d previously used LastPass to store their “seed phrase,” the private key needed to unlock access to their cryptocurrency investments.
MetaMask owner Taylor Monahan on Twitter. Image: twitter.com/tayvano_
Armed with your secret seed phrase, anyone can instantly access all of the cryptocurrency holdings tied to that cryptographic key, and move the funds to anywhere they like.
Which is why the best practice for many cybersecurity enthusiasts has long been to store their seed phrases either in some type of encrypted container — such as a password manager — or else inside an offline, special-purpose hardware encryption device, such as a Trezor or Ledger wallet.
“The seed phrase is literally the money,” said Nick Bax, director of analytics at Unciphered, a cryptocurrency wallet recovery company. “If you have my seed phrase, you can copy and paste that into your wallet, and then you can see all my accounts. And you can transfer my funds.”
Bax said he closely reviewed the massive trove of cryptocurrency theft data that Taylor Monahan and others have collected and linked together.
“It’s one of the broadest and most complex cryptocurrency investigations I’ve ever seen,” Bax said. “I ran my own analysis on top of their data and reached the same conclusion that Taylor reported. The threat actor moved stolen funds from multiple victims to the same blockchain addresses, making it possible to strongly link those victims.”
Bax, Monahan and others interviewed for this story say they’ve identified a unique signature that links the theft of more than $35 million in crypto from more than 150 confirmed victims, with roughly two to five high-dollar heists happening each month since December 2022.
KrebsOnSecurity has reviewed this signature but is not publishing it at the request of Monahan and other researchers, who say doing so could cause the attackers to alter their operations in ways that make their criminal activity more difficult to track.
But the researchers have published findings about the dramatic similarities in the ways that victim funds were stolen and laundered through specific cryptocurrency exchanges. They also learned the attackers frequently grouped together victims by sending their cryptocurrencies to the same destination crypto wallet.
A graphic published by @tayvano_ on Twitter depicting the movement of stolen cryptocurrencies from victims who used LastPass to store their crypto seed phrases.
By identifying points of overlap in these destination addresses, the researchers were then able to track down and interview new victims. For example, the researchers said their methodology identified a recent multi-million dollar crypto heist victim as an employee at Chainalysis, a blockchain analysis firm that works closely with law enforcement agencies to help track down cybercriminals and money launderers.
Chainalysis confirmed that the employee had suffered a high-dollar cryptocurrency heist late last month, but otherwise declined to comment for this story.
Bax said the only obvious commonality between the victims who agreed to be interviewed was that they had stored the seed phrases for their cryptocurrency wallets in LastPass.
“On top of the overlapping indicators of compromise, there are more circumstantial behavioral patterns and tradecraft which are also consistent between different thefts and support the conclusion,” Bax told KrebsOnSecuirty. “I’m confident enough that this is a real problem that I’ve been urging my friends and family who use LastPass to change all of their passwords and migrate any crypto that may have been exposed, despite knowing full well how tedious that is.”
LastPass declined to answer questions about the research highlighted in this story, citing an ongoing law enforcement investigation and pending litigation against the company in response to its 2022 data breach.
“Last year’s incident remains the subject of an ongoing investigation by law enforcement and is also the subject of pending litigation,” LastPass said in a written statement provided to KrebsOnSecurity. “Since last year’s attack on LastPass, we have remained in contact with law enforcement and continue to do so.”
Their statement continues:
“We have shared various technical information, Indicators of Compromise (IOCs), and threat actor tactics, techniques, and procedures (TTPs) with our law enforcement contacts as well as our internal and external threat intelligence and forensic partners in an effort to try and help identify the parties responsible. In the meantime, we encourage any security researchers to share any useful information they believe they may have with our Threat Intelligence team by contacting securitydisclosure@lastpass.com.”
On August 25, 2022, LastPass CEO Karim Toubba wrote to users that the company had detected unusual activity in its software development environment, and that the intruders stole some source code and proprietary LastPass technical information. On Sept. 15, 2022, LastPass said an investigation into the August breach determined the attacker did not access any customer data or password vaults.
But on Nov. 30, 2022, LastPass notified customers about another, far more serious security incident that the company said leveraged data stolen in the August breach. LastPass disclosed that criminal hackers had compromised encrypted copies of some password vaults, as well as other personal information.
In February 2023, LastPass disclosed that the intrusion involved a highly complex, targeted attack against a DevOps engineer who was one of only four LastPass employees with access to the corporate vault.
“This was accomplished by targeting the DevOps engineer’s home computer and exploiting a vulnerable third-party media software package, which enabled remote code execution capability and allowed the threat actor to implant keylogger malware,” LastPass officials wrote. “The threat actor was able to capture the employee’s master password as it was entered, after the employee authenticated with MFA, and gain access to the DevOps engineer’s LastPass corporate vault.”
Dan Goodin at Ars Technica reported and then confirmed that the attackers exploited a known vulnerability in a Plex media server that the employee was running on his home network, and succeeded in installing malicious software that stole passwords and other authentication credentials. The vulnerability exploited by the intruders was patched back in 2020, but the employee never updated his Plex software.
As it happens, Plex announced its own data breach one day before LastPass disclosed its initial August intrusion. On August 24, 2022, Plex’s security team urged users to reset their passwords, saying an intruder had accessed customer emails, usernames and encrypted passwords.
A basic functionality of LastPass is that it will pick and remember lengthy, complex passwords for each of your websites or online services. To automatically populate the appropriate credentials at any website going forward, you simply authenticate to LastPass using your master password.
LastPass has always emphasized that if you lose this master password, that’s too bad because they don’t store it and their encryption is so strong that even they can’t help you recover it.
But experts say all bets are off when cybercrooks can get their hands on the encrypted vault data itself — as opposed to having to interact with LastPass via its website. These so-called “offline” attacks allow the bad guys to conduct unlimited and unfettered “brute force” password cracking attempts against the encrypted data using powerful computers that can each try millions of password guesses per second.
“It does leave things vulnerable to brute force when the vaults are stolen en masse, especially if info about the vault HOLDER is available,” said Nicholas Weaver, a researcher at University of California, Berkeley’s International Computer Science Institute (ICSI) and lecturer at UC Davis. “So you just crunch and crunch and crunch with GPUs, with a priority list of vaults you target.”
How hard would it be for well-resourced criminals to crack the master passwords securing LastPass user vaults? Perhaps the best answer to this question comes from Wladimir Palant, a security researcher and the original developer behind the Adblock Plus browser plugin.
In a December 2022 blog post, Palant explained that the crackability of a LastPass master password depends largely on two things: The complexity of the master password, and the default settings for LastPass users, which appear to have varied quite a bit based on when those users began patronizing the service.
LastPass says that since 2018 it has required a twelve-character minimum for master passwords, which the company said “greatly minimizes the ability for successful brute force password guessing.”
But Palant said while LastPass indeed improved its master password defaults in 2018, it did not force all existing customers who had master passwords of lesser lengths to pick new credentials that would satisfy the 12-character minimum.
“If you are a LastPass customer, chances are that you are completely unaware of this requirement,” Palant wrote. “That’s because LastPass didn’t ask existing customers to change their master password. I had my test account since 2018, and even today I can log in with my eight-character password without any warnings or prompts to change it.”
Palant believes LastPass also failed to upgrade many older, original customers to more secure encryption protections that were offered to newer customers over the years. One important setting in LastPass is the number of “iterations,” or how many times your master password is run through the company’s encryption routines. The more iterations, the longer it takes an offline attacker to crack your master password.
Palant noted last year that for many older LastPass users, the initial default setting for iterations was anywhere from “1” to “500.” By 2013, new LastPass customers were given 5,000 iterations by default. In February 2018, LastPass changed the default to 100,100 iterations. And very recently, it upped that again to 600,000.
Palant said the 2018 change was in response to a security bug report he filed about some users having dangerously low iterations in their LastPass settings.
“Worse yet, for reasons that are beyond me, LastPass didn’t complete this migration,” Palant wrote. “My test account is still at 5,000 iterations, as are the accounts of many other users who checked their LastPass settings. LastPass would know how many users are affected, but they aren’t telling that. In fact, it’s painfully obvious that LastPass never bothered updating users’ security settings. Not when they changed the default from 1 to 500 iterations. Not when they changed it from 500 to 5,000. Only my persistence made them consider it for their latest change. And they still failed implementing it consistently.”
A chart on Palant’s blog post offers an idea of how increasing password iterations dramatically increases the costs and time needed by the attackers to crack someone’s master password. Palant said it would take a single GPU about a year to crack a password of average complexity with 500 iterations, and about 10 years to crack the same password run through 5,000 iterations.
Image: palant.info
However, these numbers radically come down when a determined adversary also has other large-scale computational assets at their disposal, such as a bitcoin mining operation that can coordinate the password-cracking activity across multiple powerful systems simultaneously.
Weaver said a password or passphrase with average complexity — such as “Correct Horse Battery Staple” is only secure against online attacks, and that its roughly 40 bits of randomness or “entropy” means a graphics card can blow through it in no time.
“An Nvidia 3090 can do roughly 4 million [password guesses] per second with 1000 iterations, but that would go down to 8 thousand per second with 500,000 iterations, which is why iteration count matters so much,” Weaver said. “So a combination of ‘not THAT strong of a password’ and ‘old vault’ and ‘low iteration count’ would make it theoretically crackable but real work, but the work is worth it given the targets.”
Reached by KrebsOnSecurity, Palant said he never received a response from LastPass about why the company apparently failed to migrate some number of customers to more secure account settings.
“I know exactly as much as everyone else,” Palant wrote in reply. “LastPass published some additional information in March. This finally answered the questions about the timeline of their breach – meaning which users are affected. It also made obvious that business customers are very much at risk here, Federated Login Services being highly compromised in this breach (LastPass downplaying as usual of course).”
Palant said upon logging into his LastPass account a few days ago, he found his master password was still set at 5,000 iterations.
KrebsOnSecurity interviewed one of the victims tracked down by Monahan, a software engineer and startup founder who recently was robbed of approximately $3.4 million worth of different cryptocurrencies. The victim agreed to tell his story in exchange for anonymity because he is still trying to claw back his losses. We’ll refer to him here as “Connor” (not his real name).
Connor said he began using LastPass roughly a decade ago, and that he also stored the seed phrase for his primary cryptocurrency wallet inside of LastPass. Connor chose to protect his LastPass password vault with an eight character master password that included numbers and symbols (~50 bits of entropy).
“I thought at the time that the bigger risk was losing a piece of paper with my seed phrase on it,” Connor said. “I had it in a bank security deposit box before that, but then I started thinking, ‘Hey, the bank might close or burn down and I could lose my seed phrase.'”
Those seed phrases sat in his LastPass vault for years. Then, early on the morning of Sunday, Aug. 27, 2023, Connor was awoken by a service he’d set up to monitor his cryptocurrency addresses for any unusual activity: Someone was draining funds from his accounts, and fast.
Like other victims interviewed for this story, Connor didn’t suffer the usual indignities that typically presage a cryptocurrency robbery, such as account takeovers of his email inbox or mobile phone number.
Connor said he doesn’t know the number of iterations his master password was given originally, or what it was set at when the LastPass user vault data was stolen last year. But he said he recently logged into his LastPass account and the system forced him to upgrade to the new 600,000 iterations setting.
“Because I set up my LastPass account so early, I’m pretty sure I had whatever weak settings or iterations it originally had,” he said.
Connor said he’s kicking himself because he recently started the process of migrating his cryptocurrency to a new wallet protected by a new seed phrase. But he never finished that migration process. And then he got hacked.
“I’d set up a brand new wallet with new keys,” he said. “I had that ready to go two months ago, but have been procrastinating moving things to the new wallet.”
Connor has been exceedingly lucky in regaining access to some of his stolen millions in cryptocurrency. The Internet is swimming with con artists masquerading as legitimate cryptocurrency recovery experts. To make matters worse, because time is so critical in these crypto heists, many victims turn to the first quasi-believable expert who offers help.
Instead, several friends steered Connor to Flashbots.net, a cryptocurrency recovery firm that employs several custom techniques to help clients claw back stolen funds — particularly those on the Ethereum blockchain.
According to Connor, Flashbots helped rescue approximately $1.5 million worth of the $3.4 million in cryptocurrency value that was suddenly swept out of his account roughly a week ago. Lucky for him, Connor had some of his assets tied up in a type of digital loan that allowed him to borrow against his various cryptocurrency assets.
Without giving away too many details about how they clawed back the funds, here’s a high level summary: When the crooks who stole Connor’s seed phrase sought to extract value from these loans, they were borrowing the maximum amount of credit that he hadn’t already used. But Connor said that left open an avenue for some of that value to be recaptured, basically by repaying the loan in many small, rapid chunks.
According to MetaMask’s Monahan, users who stored any important passwords with LastPass — particularly those related to cryptocurrency accounts — should change those credentials immediately, and migrate any crypto holdings to new offline hardware wallets.
“Really the ONLY thing you need to read is this,” Monahan pleaded to her 70,000 followers on Twitter/X: “PLEASE DON’T KEEP ALL YOUR ASSETS IN A SINGLE KEY OR SECRET PHRASE FOR YEARS. THE END. Split up your assets. Get a hw [hardware] wallet. Migrate. Now.”
If you also had passwords tied to banking or retirement accounts, or even just important email accounts — now would be a good time to change those credentials as well.
I’ve never been comfortable recommending password managers, because I’ve never seriously used them myself. Something about putting all your eggs in one basket. Heck, I’m so old-fashioned that most of my important passwords are written down and tucked away in safe places.
But I recognize this antiquated approach to password management is not for everyone. Connor says he now uses 1Password, a competing password manager that recently earned the best overall marks from Wired and The New York Times.
1Password says that three things are needed to decrypt your information: The encrypted data itself, your account password, and your Secret Key. Only you know your account password, and your Secret Key is generated locally during setup.
“The two are combined on-device to encrypt your vault data and are never sent to 1Password,” explains a 1Password blog post ‘What If 1Password Gets Hacked?‘ “Only the encrypted vault data lives on our servers, so neither 1Password nor an attacker who somehow manages to guess or steal your account password would be able to access your vaults – or what’s inside them.
Weaver said that Secret Key adds an extra level of randomness to all user master passwords that LastPass didn’t have.
“With LastPass, the idea is the user’s password vault is encrypted with a cryptographic hash (H) of the user’s passphrase,” Weaver said. “The problem is a hash of the user’s passphrase is remarkably weak on older LastPass vaults with master passwords that do not have many iterations. 1Password uses H(random-key||password) to generate the password, and it is why you have the QR code business when adding a new device.”
Weaver said LastPass deserves blame for not having upgraded iteration counts for all users a long time ago, and called the latest forced upgrades “a stunning indictment of the negligence on the part of LastPass.”
“That they never even notified all those with iteration counts of less than 100,000 — who are really vulnerable to brute force even with 8-character random passwords or ‘correct horse battery staple’ type passphrases — is outright negligence,” Weaver said. “I would personally advocate that nobody ever uses LastPass again: Not because they were hacked. Not because they had an architecture (unlike 1Password) that makes such hacking a problem. But because of their consistent refusal to address how they screwed up and take proactive efforts to protect their customers.”
Bax and Monahan both acknowledged that their research alone can probably never conclusively tie dozens of high-dollar crypto heists over the past year to the LastPass breach. But Bax says at this point he doesn’t see any other possible explanation.
“Some might say it’s dangerous to assert a strong connection here, but I’d say it’s dangerous to assert there isn’t one,” he said. “I was arguing with my fiance about this last night. She’s waiting for LastPass to tell her to change everything. Meanwhile, I’m telling her to do it now.”
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ConnectWise, which offers a self-hosted, remote desktop software application that is widely used by Managed Service Providers (MSPs), is warning about an unusually sophisticated phishing attack that can let attackers take remote control over user systems when recipients click the included link. The warning comes just weeks after the company quietly patched a vulnerability that makes it easier for phishers to launch these attacks.
A phishing attack targeting MSP customers using ConnectWise.
ConnectWise Control is extremely popular among MSPs that manage, protect and service large numbers of computers remotely for client organizations. Their product provides a dynamic software client and hosted server that connects two or more computers together, and provides temporary or persistent remote access to those client systems.
When a support technician wants to use it to remotely administer a computer, the ConnectWise website generates an executable file that is digitally signed by ConnectWise and downloadable by the client via a hyperlink.
When the remote user in need of assistance clicks the link, their computer is then directly connected to the computer of the remote administrator, who can then control the client’s computer as if they were seated in front of it.
While modern Microsoft Windows operating systems by default will ask users whether they want to run a downloaded executable file, many systems set up for remote administration by MSPs disable that user account control feature for this particular application.
In October, security researcher Ken Pyle alerted ConnectWise that their client executable file gets generated based on client-controlled parameters. Meaning, an attacker could craft a ConnectWise Control client download link that would bounce or proxy the remote connection from the MSP’s servers to a server that the attacker controls.
This is dangerous because many organizations that rely on MSPs to manage their computers often set up their networks so that only remote assistance connections coming from their MSP’s networks are allowed.
Using a free ConnectWise trial account, Pyle showed the company how easy it was to create a client executable that is cryptographically signed by ConnectWise and can bypass those network restrictions by bouncing the connection through an attacker’s ConnectWise Control server.
“You as the attacker have full control over the link’s parameters, and that link gets injected into an executable file that is downloaded by the client through an unauthenticated Web interface,” said Pyle, a partner and exploit developer at the security firm Cybir. “I can send this link to a victim, they will click this link, and their workstation will connect back to my instance via a link on your site.”
A composite of screenshots researcher Ken Pyle put together to illustrate the ScreenConnect vulnerability.
On Nov. 29, roughly the same time Pyle published a blog post about his findings, ConnectWise issued an advisory warning users to be on guard against a new round email phishing attempts that mimic legitimate email alerts the company sends when it detects unusual activity on a customer account.
“We are aware of a phishing campaign that mimics ConnectWise Control New Login Alert emails and has the potential to lead to unauthorized access to legitimate Control instances,” the company said.
ConnectWise said it released software updates last month that included new protections against the misdirection vulnerability that Pyle reported. But the company said there is no reason to believe the phishers they warned about are exploiting any of the issues reported by Pyle.
“Our team quickly triaged the report and determined the risk to partners to be minimal,” said Patrick Beggs, ConnectWise’s chief information security officer. “Nevertheless, the mitigation was simple and presented no risk to partner experience, so we put it into the then-stable 22.8 build and the then-canary 22.9 build, which were released as part of our normal release processes. Due to the low severity of the issue, we didn’t (and don’t plan to) issue a security advisory or alert, since we reserve those notifications for serious security issues.”
Beggs said the phishing attacks that sparked their advisory stemmed from an instance that was not hosted by ConnectWise.
“So we can confirm they are unrelated,” he said. “Unfortunately, phishing attacks happen far too regularly across a variety of industries and products. The timing of our advisory and Mr. Pyle’s blog were coincidental. That said, we’re all for raising more awareness of the seriousness of phishing attacks and the general importance of staying alert and aware of potentially dangerous content.”
The ConnectWise advisory warned users that before clicking any link that appears to come from their service, users should validate the content includes “domains owned by trusted sources,” and “links to go to places you recognize.”
But Pyle said this advice is not terribly useful for customers targeted in his attack scenario because the phishers can send emails directly from ConnectWise, and the short link that gets presented to the user is a wildcard domain that ends in ConnectWise Control’s own domain name — screenconnect.com. What’s more, examining the exceedingly long link generated by ConnectWise’s systems offers few insights to the average user.
“It’s signed by ConnectWise and comes from them, and if you sign up for a free trial instance, you can email people invites directly from them,” Pyle said.
ConnectWise’s warnings come amid breach reports from another major provider of remote support technologies: GoTo disclosed on Nov. 30 that it is investigating a security incident involving “unusual activity within our development environment and third-party cloud storage services. The third-party cloud storage service is currently shared by both GoTo and its affiliate, the password manager service LastPass.
In its own advisory on the incident, LastPass said they believe the intruders leveraged information stolen during a previous intrusion in August 2022 to gain access to “certain elements of our customers’ information.” However, LastPass maintains that its “customer passwords remain safely encrypted due to LastPass’s Zero Knowledge architecture.”
In short, that architecture means if you lose or forget your all-important master LastPass password — the one needed to unlock access to all of your other passwords stored with them — LastPass can’t help you with that, because they don’t store it. But that same architecture theoretically means that hackers who might break into LastPass’s networks can’t access that information either.
Update, 7:25 p.m. ET: Included statement from ConnectWise CISO.
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