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The $1.5B Bybit Hack

128 points by todsacerdoti 2y ago

michaelt 2y ago
> attackers stole approximately $1.5B from their multisig cold storage wallet. At this time, it appears the attackers compromised multiple signers’ devices, manipulated what signers saw in their wallet interface, and collected the required signatures while the signers believed they were conducting routine transactions. If hackers can get remote access and 'manipulate what signers saw in their wallet interface' that doesn't sound like cold storage to me.
- Bayart 2y ago
  Yeah, it sounds like an attack on the Metamask extension, or the browser hosting it.
  - qqqult 2y ago
    not at all
- IanCal 2y ago
  Isn't cold storage about where the keys are? You still need to be able to actually interact with a chain.
  - wongarsu 2y ago
    My understanding of "cold storage" was always that they keys are not accessible to the internet. That could be stored on paper, a flash drive or engraved in metal and put in a safe, or it could be in a regular digital wallet on a device never connected to the internet. If you want to do transactions, put it on an airgapped device, create the transaction, then move the transaction to an internet-connected device to broadcast the transaction.
    - soks86 2y ago
      Ditto. The internet is adversarial, a cold wallet should only be reachable by a wrench attack.
    - IanCal 2y ago
      The keys don't have to be accessible to the internet for this to work, here the attackers didn't get the keys. You can do the transaction on an airgapped devices and manually copy it over, but that's different from just cold storage. It also may not have actually helped here. Using something like trezor, the keys don't leave the device. It gets sent something to sign, you sign it and the result goes back. But if what you think you are sending to the device isn't what's actually being sent it depends on you catching that. If the thing is "transfer X native tokens" then it's more obvious what the impact of that is, but it doesn't have to be that. Perhaps it's adding a signer, changing a setting, altering an address. Worse, perhaps it's making some change to a contract that allows those things, but isn't as clear what it's actually doing. Worse still if the target address is close to what you expect - perhaps you think you're shifting tokens to another storage wallet, how many of the characters of the address do you check on the device itself? Air gapping doesn't really change any of that it just makes it a bit slower.
- dist-epoch 2y ago
  Stuxnet managed to infect air-gapped computers.
  - michaelt 2y ago
    And the industry learned from that, and 15 years later knows better than to rely on USB sneakernet to secure its billion dollar cold wallets. Right?
- paulpauper 2y ago
  Cold storage means the coins are stored offline. If the offline computer has malware, it is possible to tamper with the transaction data at the offline stage. Cold storage means signing the transaction offline and then broadcasting it on the online computer. if both are tampered then in theory this is possible by both computers showing erroneous data (where the offline computer tampers with the transaction by signing off to the wrong recipient but showing the correct one). This is hard to pull off as both computers need to be infected. This can be prevented by the super-paranoid by using a 3rd computer e.g. a VPS or sending small amounts. it is possible to infect the offline computer by infecting a USB drive with stealth malware which then propagates to the offline one. It could also be an inside job in exchange for an employee getting a kickback from N. Korea . it's not like this has not happened in the past. Imagine being a low-paid employee at an exchange and being enticed by an offer for tens of millions by North Korea to pretend to be hacked and infect one's own computers with the malware supplied by North Korea. This would be easy for an employee to do, who has access to the computers, and then pass it off as a hack.
  - soks86 2y ago
    Usually you want to boot from a cryptographic-ally verified medium where a checksum can be verified before you execute the system. The emphasis is on running the correct software. If you have to input cryptographic data every time you boot that's okay because you're offline and should be in a secure room (no internet connected devices). But yeah, malware attack is still possible if you don't have a secure chain and that's a long one.
  - pclmulqdq 2y ago
    There is no concept of "coin storage" in the actual security model of cryptocurrency. The security model of cryptocurrency is about the storage of keys. "Cold storage" has come to mean that the keys are stored in some offline location. It doesn't necessarily mean that the keys are hard to access or that the money being moved is otherwise hard to get to. That is used to be what it means, but practically, a wallet on a hardware keychain is called "cold" exactly the way a wallet whose keys are split up on slips of paper between 5 different physical vaults is "cold."
  - 2y ago
Mistletoe 2y ago
My understanding is this multisig failed because, like most security, everyone just pressed yes and didn’t communicate, investigate, or ask questions, defeating the purpose of a multisig.
- wslh 2y ago
  The concept of strong safeties was not in place. Safeties refer to layers that go beyond common trust mechanisms. In this case, signing a transaction of that magnitude solely based on multi-signature approval was completely insufficient. There should have been additional safeguards, such as special approvals and extra verification steps, specifically designed for transactions within that amount range.
  - ttul 2y ago
    Indeed. As in, the organization should only sign such transactions when all signers are present in person in a secure location and they follow a procedure witnessed by independent auditors. “Work from home” when you control billion in value does not cut it.
  - greg7mdp 2y ago
    They didn't sign a transaction for 1 billion dollars. They all signed what they thought was a routine transfer, but in reality what they signed gave the hacker full control of the smart contract (the Gnosis Safe) in which the 1.4B $ of tokens were stored. The hackers, having gained control of the smart contract, proceeded to empty it of funds.
    - wslh 2y ago
      Safeties applies as well, it is not the same to have a Gnosis smart contract with 1k, 1m, or 1b. They should change the smart contract to add extra steps in these circumstances, this includes Safe itself.
- __turbobrew__ 2y ago
  Yea, how is it that multiple people signed a transaction for over a billion dollars of assets without due diligence? If you did this for non crypto there would be lawyers, bankers, etc involved in the transaction. Root certificate authorities have already solved this problem with signing rituals which take place in person in an air gapped vault on specialized hardware and multiple parties as witness.
chizhik-pyzhik 2y ago
In a multisig interaction there are 3 ways to get hacked: - The multisig smart contract is owned - The computer you're signing on is owned - The hardware wallet (ledger, trezor) you're using is owned The multisig contract in question here (Gnosis Safe) has shown to be incredibly robust, and hardware wallets are very difficult to attack, so the current weak point is the computer. Cryptocurrency companies need to start solving this by moving to a more locked-down, dedicated machine for signing, as well as actually verifying what is shown on the tiny hardware wallet screen instead of blindly clicking "yes".
- m3kw9 2y ago
  They should only use a computer that is air gapped to go online only when signing something. This is an op sec failure to not have this procedure
  - tremarley 2y ago
    That’s precisely what happened in this attack. They were attacked when they went online
    - m3kw9 2y ago
      No, the computers were pre infected. If they used airgapped systems only to sign there would be almost no vector to from other than some major zero click zero day stuff, in that case everyone is screwed
  - alwa 2y ago
    Why should it go online at all? $1.5 billion buys a lot of plane tickets to the same physical place, and how frequently do they need to be accessing the whole lump, anyway? For that matter, I know signatures are long and human-unfriendly, but isn’t it on the order of a couple hundred bytes? Surely $1.5 billion buys transcribing the putative signature request into an isolated machine in a known state, validating/interpreting/displaying the request’s meaning on that offline machine, performing your signing there offline, copying down the result, and carrying the attestation to your secret conclave lair to combine with the others’ or whatever?
jmyeet 2y ago
The other side of this coin is all the companies and infrastructure that has popped up, which intentionally or not enables the laundering of ill-gotten cryptocurrency [1]. I have a hard time feeling sympathy here because I consider cryptocurrency to be fundamentally silly. Reversible transactions of fiat currency transactions is a feature not a bug. I feel like securing something like this is practically impossible. There's always the risk of a bad actor who introduces malware for a small fee. [1]: https://www.chainalysis.com/blog/2024-crypto-money-laundering/ https://www.chainalysis.com/blog/2024-crypto-money-launderin...
- tremarley 2y ago
  Reversible transactions is a feature for fiat money Reversible transactions would generally be a bug regarding cash & hard assets of which cryptocurrency is trying to imitate.
  - idiotsecant 2y ago
    Crypto has reversible transactions when both parties agree to use that functionality in advance (well, the reasonably programmable ones do, anyway) It's not a bug if both parties give consent, which sounds like a wonderful way to transact, to me!
    - toss1 2y ago
      But, when you REALLY want reversibility is when the transaction is done without your consent — when stuff is stolen and you want it back. Thieves will not tend to consent to reversible transactions.
      - staplers 2y ago
        On the contrary, thieves often use chargebacks to steal from small businesses.
        toss1 2y ago
HenryBemis 2y ago
Taking a step back from this attack, it looks like the new crypto-reality is far far far immature security-wise & compliance-wise ("compliance to what??" you can ask me). While it is nearly impossible to steal $100mn from one of the mega-banks, those <expletive> crypto bros, a bunch of failed morons (self-proven by all these hacks), manage to lose people's money. Now.. I am not defending the banking system (and its ethics/morals), but damn-it they do a f-a-r better job at IT Audit/IT Compliance/IT Sec (my bread and b utter for decades).
- Bayart 2y ago
  Being in the thick of it, I can tell you the compliance side is pushing towards what exists in traditional finance, be IT, money laundering, accounting practices etc. At least in Europe and to a lesser extent the US. If you go working at new banks (say Revolut or N26) or at growing asset-managing crypto companies in Europe you'll find the landscape to be extremely similar. As far as I'm concerned, if you're parking money with a company based in an area that has lax regulation you're holding the gun that'll shoot your foot. I have a hard time seeing something like this happen at Bitpanda or Kraken, though you never know.
  - mlinhares 2y ago
    Classic “you get what you pay for”.
- idiotsecant 2y ago
  I'm not sure how you'd do compliance, though. At least not universally. You could (which I suppose is your point) implement compliance requirements for crypto companies operating facilities on your soil. That doesn't really do anything for decentralized systems though
  - Bayart 2y ago
    Compliance has a centralizing effect, for example the American OFAC sanctions list. You can do business outside of it but you're cutting yourself out of a lot of institutional money. In the end while there's a lot of money being made in sanctions-evasion, money-laundering and whatnot, at the macro level the industry prefers trying to cozy up to Blackrock and Vanguard than to narcos.
ohwowhi 2y ago
Unsure why the title says this era has arrived as if it's something new. As an internal penetration tester, I can attest it's already a disaster. The issue is that companies live and die by the cope that social engineering is a high bar or that if a vulnerability isn't internet facing, it's not a big deal.
- dang 2y ago
  We took the new era out of the title above.
- FabHK 2y ago
  The point of the article seems to be that it used to be bugs and raw incompetence, and now it's graduated to insufficient OpSec. Significant progress for crypto.
WJW 2y ago
The online security world is so wild. In pretty much any other field of engineering, foreign nation states explicitly targeting the thing you built is just kinda out of scope. There's no skyscraper in existence that is designed to withstand sustained artillery shelling, and your car is not going to withstand a tank shell either. Neither do they have to be designed to that specification. If North Korea killed someone with a missile or even destroyed a minor building or something, there would be public outrage and swift (military) repercussions. But online, it's the wild wild west. The North Koreans can throw anything they want at your systems and the main response you get is "lol get good noob, should have built more secure systems" despite the opposing side literally having quite literally hundreds of people specifically trained to take on organisations like yours. Not saying the Bybit people couldn't have been more careful of whatever, but let's appreciate how wild the online environment actually is sometimes.
- ip26 2y ago
  It seems more analogous to the Soviets infiltrating your small business. Which no small business owner is prepared to screen for, and which happened.
  - blipvert 2y ago
    If your small business has $1.5billion in the safe then it’s not a “small business”
    - alwa 2y ago
      Especially if it’s $1.5bn of other people’s money
- gregwebs 2y ago
  The state of online security hasn't changed much. What has changed is that there is an digital (as opposed to gold) international form of money whose transactions cannot be reversed or stopped. Bybit and those holders of large crypto are operating with a fundamentally different threat model where its worthwhile for an attacker to invest millions of dollars of effort (for the Bybit payout even tens or hundreds of millions) attacking them. Everyone else just needs to worry about getting ransomed for a much smaller amount.
herodotus 2y ago
Genuine question because I know almost nothing about crypto: who actually lost money in this attack? Lots of individuals?
- jgilias 2y ago
  Depends how this plays out. If Bybit collapses due to this, yeah, lots of individual investors. Though history shows (MtGox, FTX) that eventually they’d be made at least partially whole. If Bybit doesn’t collapse (can handle all the on-going withdrawals), then Bybit lost money that they’ll need to recoup through operations. Currently it’s trending towards the second scenario.
konaraddi 2y ago
This post is light on the details of how the hack occurred. Given it talks about their toolkit, am I right to understand that people were tricked into downloading and running malicious software?
- konaraddi 2y ago
  Found the answer, yes https://x.com/0xcygaar/status/1892967062160511164 https://x.com/0xcygaar/status/1892967062160511164
- bsamuels 2y ago
  the exact details of the attack were still evolving when we pushed the blog post out, so we kept it to what we did know and what could be extrapolated from it
garyrob 2y ago
". At this time, it appears the attackers compromised multiple signers’ devices, manipulated what signers saw in their wallet interface, and collected the required signatures while the signers believed they were conducting routine transactions." Does anyone know how many signers there were/are?
zsdsystems 2y ago
I really do not understand why they do not separate these into multiple separate wallets
- kzrdude 2y ago
  They have other cold wallets, so I guess they do?
- qqqult 2y ago
  They did. This was a multisig - meaning M out of N signatures from different signing devices were needed to sign a transaction. The attacker infected enough signer devices to go unnoticed and the signers failed to verify what they were signing on air-gapped devices
  - fc417fc802 2y ago
    > the signers failed to verify what they were signing on air-gapped devices This is the part that really surprises me given the amount of money involved.
    - celticninja 2y ago
      But they didn't know the amount because the UI showed them a different value, so if it's for 50ETH and you regular sign tx for 100-200ETH you may be a little less thorough.
      - fc417fc802 2y ago
        If the setup you are using has the ability to perform large transactions then you must verify all transactions regardless of size as though they are large. It's a security domain issue. A highly secure system involves highly secure controls. Bypassing those controls for lower risk activities will typically reduce the security of the entire system. You need an entirely independent low or medium risk system. The software development practices of banks are probably a good example here.
- 2y ago
dang 2y ago
Recent and related: Bybit loses $1.5B in hack - https://news.ycombinator.com/item?id=43130143 https://news.ycombinator.com/item?id=43130143
jongjong 2y ago
Wild to think that North Korea could assign whole teams of people working 24/7 to trick just one person into clicking a couple of buttons.
- celticninja 2y ago
  Not one person. The multi in mukti-sig means multiple.
  - acdha 2y ago
    Multi-sig means multiple signatures, by multiple private keys. Nothing about that means that they have to be by multiple people - this isn’t secure like a bank - or that they aren’t vulnerable to the same attack.
    - celticninja 2y ago
      ok but in practice having multiple signatures but one signer is pointless, so multi-sig pretty much does mean multiple signers(people)
      - acdha 2y ago
        Sure, but I mention it because it’s not a 1:1 mapping and if they aren’t rigorously auditing their behaviour it wouldn’t exactly be unheard of for people to know coworkers passwords or, more likely, for most of them to just trust someone saying it’s legit. If the tweet about it being a smart contract update is accurate, it’d be especially plausible that people shirked their responsibility and just approved it without review. The multiple part really doesn’t help enough if people aren’t independently verifying requests. The main takeaway I have is that their “cold” wallet wasn’t very cold and they’d messed up a lot of their diligence, so I’d also read any statements from them as the products of damage control similar to how companies talk about “nation-state threat actors” trying to make it sound like you have to be the Mossad to exploit a Citrix patch which wasn’t installed for most of a year.
ai_slurp_bot 2y ago
Remember when ETH hard forked over $50M stolen 9 years ago?
- paulpauper 2y ago
  that was way more relative to size of network , and the hacker still got his forked tokens, so he did ok
jongjong 2y ago
I hate how complexity has become the norm in the industry. Instead of having simple systems with code and modules that are simple, fit-for-purpose and fully auditable, the approach has been to have insanely complex systems and then to add some even more complex security solution on top like CrowdStrike. Seems like a bandaid patch.
dmichulke 2y ago
They specifically name MacOS and Windows, so it is something about their network's and their computer's security? Have the signing devices been iOS or Android phones? Shouldn't a signing device be (in such a case) used for signing only, e.g. a QR-Code signer with no OS that specifically shows the inputs and outputs to the transaction?
MAGDIE34YY 2y ago
[dead]

128 points by todsacerdoti 2y ago

> attackers stole approximately $1.5B from their multisig cold storage wallet. At this time, it appears the attackers compromised multiple signers’ devices, manipulated what signers saw in their wallet interface, and collected the required signatures while the signers believed they were conducting routine transactions. If hackers can get remote access and 'manipulate what signers saw in their wallet interface' that doesn't sound like cold storage to me.

Bayart 2y ago
Yeah, it sounds like an attack on the Metamask extension, or the browser hosting it.
- qqqult 2y ago
  not at all
IanCal 2y ago
Isn't cold storage about where the keys are? You still need to be able to actually interact with a chain.
- wongarsu 2y ago
  My understanding of "cold storage" was always that they keys are not accessible to the internet. That could be stored on paper, a flash drive or engraved in metal and put in a safe, or it could be in a regular digital wallet on a device never connected to the internet. If you want to do transactions, put it on an airgapped device, create the transaction, then move the transaction to an internet-connected device to broadcast the transaction.
  - soks86 2y ago
    Ditto. The internet is adversarial, a cold wallet should only be reachable by a wrench attack.
  - IanCal 2y ago
    The keys don't have to be accessible to the internet for this to work, here the attackers didn't get the keys. You can do the transaction on an airgapped devices and manually copy it over, but that's different from just cold storage. It also may not have actually helped here. Using something like trezor, the keys don't leave the device. It gets sent something to sign, you sign it and the result goes back. But if what you think you are sending to the device isn't what's actually being sent it depends on you catching that. If the thing is "transfer X native tokens" then it's more obvious what the impact of that is, but it doesn't have to be that. Perhaps it's adding a signer, changing a setting, altering an address. Worse, perhaps it's making some change to a contract that allows those things, but isn't as clear what it's actually doing. Worse still if the target address is close to what you expect - perhaps you think you're shifting tokens to another storage wallet, how many of the characters of the address do you check on the device itself? Air gapping doesn't really change any of that it just makes it a bit slower.
dist-epoch 2y ago
Stuxnet managed to infect air-gapped computers.
- michaelt 2y ago
  And the industry learned from that, and 15 years later knows better than to rely on USB sneakernet to secure its billion dollar cold wallets. Right?
paulpauper 2y ago
Cold storage means the coins are stored offline. If the offline computer has malware, it is possible to tamper with the transaction data at the offline stage. Cold storage means signing the transaction offline and then broadcasting it on the online computer. if both are tampered then in theory this is possible by both computers showing erroneous data (where the offline computer tampers with the transaction by signing off to the wrong recipient but showing the correct one). This is hard to pull off as both computers need to be infected. This can be prevented by the super-paranoid by using a 3rd computer e.g. a VPS or sending small amounts. it is possible to infect the offline computer by infecting a USB drive with stealth malware which then propagates to the offline one. It could also be an inside job in exchange for an employee getting a kickback from N. Korea . it's not like this has not happened in the past. Imagine being a low-paid employee at an exchange and being enticed by an offer for tens of millions by North Korea to pretend to be hacked and infect one's own computers with the malware supplied by North Korea. This would be easy for an employee to do, who has access to the computers, and then pass it off as a hack.
- soks86 2y ago
  Usually you want to boot from a cryptographic-ally verified medium where a checksum can be verified before you execute the system. The emphasis is on running the correct software. If you have to input cryptographic data every time you boot that's okay because you're offline and should be in a secure room (no internet connected devices). But yeah, malware attack is still possible if you don't have a secure chain and that's a long one.
- pclmulqdq 2y ago
  There is no concept of "coin storage" in the actual security model of cryptocurrency. The security model of cryptocurrency is about the storage of keys. "Cold storage" has come to mean that the keys are stored in some offline location. It doesn't necessarily mean that the keys are hard to access or that the money being moved is otherwise hard to get to. That is used to be what it means, but practically, a wallet on a hardware keychain is called "cold" exactly the way a wallet whose keys are split up on slips of paper between 5 different physical vaults is "cold."
- 2y ago

Mistletoe 2y ago

My understanding is this multisig failed because, like most security, everyone just pressed yes and didn’t communicate, investigate, or ask questions, defeating the purpose of a multisig.

wslh 2y ago
The concept of strong safeties was not in place. Safeties refer to layers that go beyond common trust mechanisms. In this case, signing a transaction of that magnitude solely based on multi-signature approval was completely insufficient. There should have been additional safeguards, such as special approvals and extra verification steps, specifically designed for transactions within that amount range.
- ttul 2y ago
  Indeed. As in, the organization should only sign such transactions when all signers are present in person in a secure location and they follow a procedure witnessed by independent auditors. “Work from home” when you control billion in value does not cut it.
- greg7mdp 2y ago
  They didn't sign a transaction for 1 billion dollars. They all signed what they thought was a routine transfer, but in reality what they signed gave the hacker full control of the smart contract (the Gnosis Safe) in which the 1.4B $ of tokens were stored. The hackers, having gained control of the smart contract, proceeded to empty it of funds.
  - wslh 2y ago
    Safeties applies as well, it is not the same to have a Gnosis smart contract with 1k, 1m, or 1b. They should change the smart contract to add extra steps in these circumstances, this includes Safe itself.
__turbobrew__ 2y ago
Yea, how is it that multiple people signed a transaction for over a billion dollars of assets without due diligence? If you did this for non crypto there would be lawyers, bankers, etc involved in the transaction. Root certificate authorities have already solved this problem with signing rituals which take place in person in an air gapped vault on specialized hardware and multiple parties as witness.

chizhik-pyzhik 2y ago

In a multisig interaction there are 3 ways to get hacked: - The multisig smart contract is owned - The computer you're signing on is owned - The hardware wallet (ledger, trezor) you're using is owned The multisig contract in question here (Gnosis Safe) has shown to be incredibly robust, and hardware wallets are very difficult to attack, so the current weak point is the computer. Cryptocurrency companies need to start solving this by moving to a more locked-down, dedicated machine for signing, as well as actually verifying what is shown on the tiny hardware wallet screen instead of blindly clicking "yes".

m3kw9 2y ago
They should only use a computer that is air gapped to go online only when signing something. This is an op sec failure to not have this procedure
- tremarley 2y ago
  That’s precisely what happened in this attack. They were attacked when they went online
  - m3kw9 2y ago
    No, the computers were pre infected. If they used airgapped systems only to sign there would be almost no vector to from other than some major zero click zero day stuff, in that case everyone is screwed
- alwa 2y ago
  Why should it go online at all? $1.5 billion buys a lot of plane tickets to the same physical place, and how frequently do they need to be accessing the whole lump, anyway? For that matter, I know signatures are long and human-unfriendly, but isn’t it on the order of a couple hundred bytes? Surely $1.5 billion buys transcribing the putative signature request into an isolated machine in a known state, validating/interpreting/displaying the request’s meaning on that offline machine, performing your signing there offline, copying down the result, and carrying the attestation to your secret conclave lair to combine with the others’ or whatever?

jmyeet 2y ago

The other side of this coin is all the companies and infrastructure that has popped up, which intentionally or not enables the laundering of ill-gotten cryptocurrency [1]. I have a hard time feeling sympathy here because I consider cryptocurrency to be fundamentally silly. Reversible transactions of fiat currency transactions is a feature not a bug. I feel like securing something like this is practically impossible. There's always the risk of a bad actor who introduces malware for a small fee. [1]: https://www.chainalysis.com/blog/2024-crypto-money-laundering/ https://www.chainalysis.com/blog/2024-crypto-money-launderin...

tremarley 2y ago
Reversible transactions is a feature for fiat money Reversible transactions would generally be a bug regarding cash & hard assets of which cryptocurrency is trying to imitate.
- idiotsecant 2y ago
  Crypto has reversible transactions when both parties agree to use that functionality in advance (well, the reasonably programmable ones do, anyway) It's not a bug if both parties give consent, which sounds like a wonderful way to transact, to me!
  - toss1 2y ago
    But, when you REALLY want reversibility is when the transaction is done without your consent — when stuff is stolen and you want it back. Thieves will not tend to consent to reversible transactions.
    - staplers 2y ago
      On the contrary, thieves often use chargebacks to steal from small businesses.
      - toss1 2y ago

HenryBemis 2y ago

Taking a step back from this attack, it looks like the new crypto-reality is far far far immature security-wise & compliance-wise ("compliance to what??" you can ask me). While it is nearly impossible to steal $100mn from one of the mega-banks, those <expletive> crypto bros, a bunch of failed morons (self-proven by all these hacks), manage to lose people's money. Now.. I am not defending the banking system (and its ethics/morals), but damn-it they do a f-a-r better job at IT Audit/IT Compliance/IT Sec (my bread and b utter for decades).

Bayart 2y ago
Being in the thick of it, I can tell you the compliance side is pushing towards what exists in traditional finance, be IT, money laundering, accounting practices etc. At least in Europe and to a lesser extent the US. If you go working at new banks (say Revolut or N26) or at growing asset-managing crypto companies in Europe you'll find the landscape to be extremely similar. As far as I'm concerned, if you're parking money with a company based in an area that has lax regulation you're holding the gun that'll shoot your foot. I have a hard time seeing something like this happen at Bitpanda or Kraken, though you never know.
- mlinhares 2y ago
  Classic “you get what you pay for”.
idiotsecant 2y ago
I'm not sure how you'd do compliance, though. At least not universally. You could (which I suppose is your point) implement compliance requirements for crypto companies operating facilities on your soil. That doesn't really do anything for decentralized systems though
- Bayart 2y ago
  Compliance has a centralizing effect, for example the American OFAC sanctions list. You can do business outside of it but you're cutting yourself out of a lot of institutional money. In the end while there's a lot of money being made in sanctions-evasion, money-laundering and whatnot, at the macro level the industry prefers trying to cozy up to Blackrock and Vanguard than to narcos.

ohwowhi 2y ago

Unsure why the title says this era has arrived as if it's something new. As an internal penetration tester, I can attest it's already a disaster. The issue is that companies live and die by the cope that social engineering is a high bar or that if a vulnerability isn't internet facing, it's not a big deal.

dang 2y ago
We took the new era out of the title above.
FabHK 2y ago
The point of the article seems to be that it used to be bugs and raw incompetence, and now it's graduated to insufficient OpSec. Significant progress for crypto.

WJW 2y ago

The online security world is so wild. In pretty much any other field of engineering, foreign nation states explicitly targeting the thing you built is just kinda out of scope. There's no skyscraper in existence that is designed to withstand sustained artillery shelling, and your car is not going to withstand a tank shell either. Neither do they have to be designed to that specification. If North Korea killed someone with a missile or even destroyed a minor building or something, there would be public outrage and swift (military) repercussions. But online, it's the wild wild west. The North Koreans can throw anything they want at your systems and the main response you get is "lol get good noob, should have built more secure systems" despite the opposing side literally having quite literally hundreds of people specifically trained to take on organisations like yours. Not saying the Bybit people couldn't have been more careful of whatever, but let's appreciate how wild the online environment actually is sometimes.

ip26 2y ago
It seems more analogous to the Soviets infiltrating your small business. Which no small business owner is prepared to screen for, and which happened.
- blipvert 2y ago
  If your small business has $1.5billion in the safe then it’s not a “small business”
  - alwa 2y ago
    Especially if it’s $1.5bn of other people’s money
gregwebs 2y ago
The state of online security hasn't changed much. What has changed is that there is an digital (as opposed to gold) international form of money whose transactions cannot be reversed or stopped. Bybit and those holders of large crypto are operating with a fundamentally different threat model where its worthwhile for an attacker to invest millions of dollars of effort (for the Bybit payout even tens or hundreds of millions) attacking them. Everyone else just needs to worry about getting ransomed for a much smaller amount.

herodotus 2y ago

Genuine question because I know almost nothing about crypto: who actually lost money in this attack? Lots of individuals?

jgilias 2y ago
Depends how this plays out. If Bybit collapses due to this, yeah, lots of individual investors. Though history shows (MtGox, FTX) that eventually they’d be made at least partially whole. If Bybit doesn’t collapse (can handle all the on-going withdrawals), then Bybit lost money that they’ll need to recoup through operations. Currently it’s trending towards the second scenario.

konaraddi 2y ago

This post is light on the details of how the hack occurred. Given it talks about their toolkit, am I right to understand that people were tricked into downloading and running malicious software?

konaraddi 2y ago
Found the answer, yes https://x.com/0xcygaar/status/1892967062160511164 https://x.com/0xcygaar/status/1892967062160511164
bsamuels 2y ago
the exact details of the attack were still evolving when we pushed the blog post out, so we kept it to what we did know and what could be extrapolated from it

garyrob 2y ago

". At this time, it appears the attackers compromised multiple signers’ devices, manipulated what signers saw in their wallet interface, and collected the required signatures while the signers believed they were conducting routine transactions." Does anyone know how many signers there were/are?

zsdsystems 2y ago

I really do not understand why they do not separate these into multiple separate wallets

kzrdude 2y ago
They have other cold wallets, so I guess they do?
qqqult 2y ago
They did. This was a multisig - meaning M out of N signatures from different signing devices were needed to sign a transaction. The attacker infected enough signer devices to go unnoticed and the signers failed to verify what they were signing on air-gapped devices
- fc417fc802 2y ago
  > the signers failed to verify what they were signing on air-gapped devices This is the part that really surprises me given the amount of money involved.
  - celticninja 2y ago
    But they didn't know the amount because the UI showed them a different value, so if it's for 50ETH and you regular sign tx for 100-200ETH you may be a little less thorough.
    - fc417fc802 2y ago
      If the setup you are using has the ability to perform large transactions then you must verify all transactions regardless of size as though they are large. It's a security domain issue. A highly secure system involves highly secure controls. Bypassing those controls for lower risk activities will typically reduce the security of the entire system. You need an entirely independent low or medium risk system. The software development practices of banks are probably a good example here.
2y ago

dang 2y ago

Recent and related: Bybit loses $1.5B in hack - https://news.ycombinator.com/item?id=43130143 https://news.ycombinator.com/item?id=43130143

jongjong 2y ago

Wild to think that North Korea could assign whole teams of people working 24/7 to trick just one person into clicking a couple of buttons.

celticninja 2y ago
Not one person. The multi in mukti-sig means multiple.
- acdha 2y ago
  Multi-sig means multiple signatures, by multiple private keys. Nothing about that means that they have to be by multiple people - this isn’t secure like a bank - or that they aren’t vulnerable to the same attack.
  - celticninja 2y ago
    ok but in practice having multiple signatures but one signer is pointless, so multi-sig pretty much does mean multiple signers(people)
    - acdha 2y ago
      Sure, but I mention it because it’s not a 1:1 mapping and if they aren’t rigorously auditing their behaviour it wouldn’t exactly be unheard of for people to know coworkers passwords or, more likely, for most of them to just trust someone saying it’s legit. If the tweet about it being a smart contract update is accurate, it’d be especially plausible that people shirked their responsibility and just approved it without review. The multiple part really doesn’t help enough if people aren’t independently verifying requests. The main takeaway I have is that their “cold” wallet wasn’t very cold and they’d messed up a lot of their diligence, so I’d also read any statements from them as the products of damage control similar to how companies talk about “nation-state threat actors” trying to make it sound like you have to be the Mossad to exploit a Citrix patch which wasn’t installed for most of a year.

ai_slurp_bot 2y ago

Remember when ETH hard forked over $50M stolen 9 years ago?

paulpauper 2y ago
that was way more relative to size of network , and the hacker still got his forked tokens, so he did ok

jongjong 2y ago

I hate how complexity has become the norm in the industry. Instead of having simple systems with code and modules that are simple, fit-for-purpose and fully auditable, the approach has been to have insanely complex systems and then to add some even more complex security solution on top like CrowdStrike. Seems like a bandaid patch.

dmichulke 2y ago

They specifically name MacOS and Windows, so it is something about their network's and their computer's security? Have the signing devices been iOS or Android phones? Shouldn't a signing device be (in such a case) used for signing only, e.g. a QR-Code signer with no OS that specifically shows the inputs and outputs to the transaction?

MAGDIE34YY 2y ago

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