Bitcoin Forum

Economy => Marketplace => Topic started by: theymos on February 13, 2012, 05:20:31 AM



Title: Bitscalper passwords have been leaked
Post by: theymos on February 13, 2012, 05:20:31 AM
I have received and confirmed a report from chsx3 that a security flaw exists in the bitscalper.com website allowing all username/password combinations to be retrieved in plaintext. Passwords are not hashed. While it is not known for sure that an attacker has discovered the flaw, you should assume that the list is public.

Anyone with a bitscalper account should immediately:
- Withdraw all funds. No one should trust bitscalper.com after a security flaw of this sort, and I wouldn't be surprised if they run away with everyone's money once this gets out.
- Change your password on any site where you've used the same password as bitscalper.com.

Because I do not consider Bitscalper to be reputable, I've decided to announce the existence of this flaw publicly before sending the technical details to bitscalper. Otherwise I fear that he may run away with everyone's money instead of alerting his users and losing trust.

Hats off to chsx3 for not abusing this. He could have easily stolen thousands of bitcoins from Bitscalper users.


Title: Re: Bitscalper passwords have been leaked
Post by: copumpkin on February 13, 2012, 05:24:32 AM
It's quite amazing how this community seems to attract the worst security practices.


Title: Re: Bitscalper passwords have been leaked
Post by: Sysrq on February 13, 2012, 05:26:43 AM
Wow ! What a nice, well run site !

Theymos, thank you for the info.


Title: Re: Bitscalper passwords have been leaked
Post by: Kluge on February 13, 2012, 05:26:56 AM
And now, I assume the stampede of traffic is preventing website access, meaning Bitscalper admin could probably make off with everything left, anyway - not that withdrawals usually work... Hope nobody had a substantial amount left there. :x

ETA: was able to get through to site. Extremely sluggish, but can still get to account page. Small withdrawal request still "processing" from 2/9. ETA2: Wow, it was actually processed. Huh.


Title: Re: Bitscalper passwords have been leaked
Post by: splatster on February 13, 2012, 05:28:20 AM
Code:
md5($password + "mysupercoolsalt")
There, I just took one simple step that could have gone a long way.


Title: Re: Bitscalper passwords have been leaked
Post by: GeniuSxBoY on February 13, 2012, 05:33:51 AM
hax0rs gonna hax


Title: Re: Bitscalper passwords have been leaked
Post by: copumpkin on February 13, 2012, 05:34:20 AM
Code:
md5($password + "mysupercoolsalt")
There, I just took one simple step that could have gone a long way.

But then how would you include the user's password in the email you send them when they forget it? ;)


Title: Re: Bitscalper passwords have been leaked
Post by: splatster on February 13, 2012, 05:38:08 AM
Code:
md5($password + "mysupercoolsalt")
There, I just took one simple step that could have gone a long way.

But then how would you include the user's password in the email you send them when they forget it? ;)

Better yet, how could you give away everyone's money to anyone with a computer?


Title: Re: Bitscalper passwords have been leaked
Post by: Snapman on February 13, 2012, 05:59:21 AM
I saw this coming from far off. Except for the part on honesty, thanks.


Title: Re: Bitscalper passwords have been leaked
Post by: someguy123 on February 13, 2012, 06:17:11 AM
Don't care that much..
Withdrew my 0.5BTC when I started to realize I wasn't really making much
Plus I use keepass... so a nice 32 character password in there that can't be used for anything else. Bad luck for anyone who tried to use my password from it :)


Title: Re: Bitscalper passwords have been leaked
Post by: deepceleron on February 13, 2012, 06:27:47 AM
"Bug reports are welcome at bugtraq@bitscalper.com. Thank you for your cooperation."

Clearly the site op has come back from the future, and knows this isn't a problem:
© 2012/2013 bitscalper.com


Title: Re: Bitscalper passwords have been leaked
Post by: terrytibbs on February 13, 2012, 06:31:43 AM
Hats off to chsx3 for not abusing this. He could have easily stolen thousands of bitcoins from Bitscalper users.
Damn!


Title: Re: Bitscalper passwords have been leaked
Post by: Ente on February 13, 2012, 07:11:28 AM
Hats off to chsx3 for not abusing this. He could have easily stolen thousands of bitcoins from Bitscalper users.

You have my deepest respect, chsx3. Many people say (or believe) they are ethically integer. Just until they get the chance to prove it..
Hats off to you, chsx3, thank you for being a positive example in a largely rotten world.

I have received and confirmed a report from chsx3 that a security flaw exists in the bitscalper.com website allowing all username/password combinations to be retrieved in plaintext. Passwords are not hashed.

No surprises from BS's side, though.

Ente


Title: Re: Bitscalper passwords have been leaked
Post by: Jonathan Ryan Owens on February 13, 2012, 08:23:11 AM
Hats off to chsx3 for not abusing this. He could have easily stolen thousands of bitcoins from Bitscalper users.

You have my deepest respect, chsx3. Many people say (or believe) they are ethically integer. Just until they get the chance to prove it..
Hats off to you, chsx3, thank you for being a positive example in a largely rotten world.

I have received and confirmed a report from chsx3 that a security flaw exists in the bitscalper.com website allowing all username/password combinations to be retrieved in plaintext. Passwords are not hashed.

No surprises from BS's side, though.

Ente

Most people are honest in situations like that. It's also penny wise and pound stupid to take the Bitcoin. He gets to be the one that exposed BitScalper vulnerability, and is now a hero. That's worth more than a few thousand bitcoin (assuming that there are even a few thousand bitcoin at BitScalper).
 


Title: Re: Bitscalper passwords have been leaked
Post by: caveden on February 13, 2012, 08:27:44 AM
It's quite amazing how this community seems to attract the worst security practices.

I'd say that unfortunately many software developers in general do not follow important security practices. The main difference with this community is that there is a considerable amount of people capable of exploiting such vulnerabilities. And, well, most of the time there's money involved, not only ordinary data.

Congratulations for both chsx3 and theymos for the honest behavior.


Title: Re: Bitscalper passwords have been leaked
Post by: P4man on February 13, 2012, 08:37:14 AM
He gets to be the one that exposed BitScalper vulnerability, and is now a hero. That's worth more than a few thousand bitcoin

Really? Why? It wouldnt be to me. In fact it wouldnt be worth 5BTC to me.
The knowledge that I didnt scam people and helped avoid them get scammed would be worth a lot more to me, but the "hero" status on this board.. nop.


Title: Re: Bitscalper passwords have been leaked
Post by: finway on February 13, 2012, 08:54:08 AM
Sorry to hear that.


Title: Re: Bitscalper passwords have been leaked
Post by: Cluster2k on February 13, 2012, 09:44:13 AM
Plain text passwords?  Words escape me how incompetent someone could be to even think of allowing that.  It's an unforgivable error.


Title: Re: Bitscalper passwords have been leaked
Post by: BombaUcigasa on February 13, 2012, 10:24:52 AM
It's quite amazing how this community seems to attract the worst security practices.
Your expectations of people that believe they understand mathematics, economics and computing at the same time, are too high. Because few of these people exist.


Title: Re: Bitscalper passwords have been leaked
Post by: film2240 on February 13, 2012, 11:07:54 AM
Thanks for the heads up Theymos.


Title: Re: Bitscalper passwords have been leaked
Post by: cablepair on February 13, 2012, 01:14:24 PM
damn, I knew this was too good to be true. This is the reason I only deposited 5 btc

(grew to 5.3532907242433 within a couple weeks)

Luckily I have been using separate passwords on every single site since MTGox got hacked back in june.



Title: Re: Bitscalper passwords have been leaked
Post by: vampire on February 13, 2012, 01:32:32 PM
I use separate password for everything, thanks to last pass. I am a bit paranoid, so my main banking account has its own password that I don't store anywhere and a RSA key that is locked in a safe.

Use last pass or similar website to manage your passwords.


Title: Re: Bitscalper passwords have been leaked
Post by: Ente on February 13, 2012, 02:57:26 PM
Being paranoid: Please trust (your local) keepass (keepassx in linux) instead of a website.. We just saw what you may get in trusting an external entity ;-)

Ente


Title: Re: Bitscalper passwords have been leaked
Post by: Matoking on February 13, 2012, 03:21:28 PM
Plaintext passwords? Seriously?


Title: Re: Bitscalper passwords have been leaked
Post by: splatster on February 13, 2012, 04:31:17 PM
People should have seen this comming.
By now, the coins are probably already gone.


Title: Re: Bitscalper passwords have been leaked
Post by: alan2here on February 13, 2012, 09:26:46 PM
Didn't gox have a similar thing occur once?


Title: Re: Bitscalper passwords have been leaked
Post by: M4v3R on February 13, 2012, 10:04:31 PM
Didn't gox have a similar thing occur once?

No, they used md5 hashed passwords, but they were unsalted, so weak passwords got cracked when the db leaked.


Title: Re: Bitscalper passwords have been leaked
Post by: Littleshop on February 13, 2012, 10:08:20 PM
Didn't gox have a similar thing occur once?

No, they used md5 hashed passwords, but they were unsalted, so weak passwords got cracked when the db leaked.
While I have changed my password, had a unique one for that site and withdrew (though it has not arrived), how well would a 11 char password hold up?


Title: Re: Bitscalper passwords have been leaked
Post by: M4v3R on February 13, 2012, 10:13:02 PM
Bitscalper didn't use any hashing, so every password got out. As for Mt. Gox back then, try this link: How secure is my password? (http://howsecureismypassword.net/)


Title: Re: Bitscalper passwords have been leaked
Post by: Littleshop on February 13, 2012, 10:15:23 PM
Bitscalper didn't use any hashing, so every password got out. As for Mt. Gox back then, try this link: How secure is my password? (http://howsecureismypassword.net/)

Wow.  Glad it was unique.  It says years so I guess it was not too bad.  Thanks, good link


Title: Re: Bitscalper passwords have been leaked
Post by: Raoul Duke on February 14, 2012, 12:02:57 AM
I call bullshit on this one...

Theymos, have you seen the leaked logins or are you just spreading FUD?

PS: I have no bitcoin on bitscalper, but I made an account there and got some profits out a while back.


Title: Re: Bitscalper passwords have been leaked
Post by: theymos on February 14, 2012, 12:29:38 AM
Theymos, have you seen the leaked logins or are you just spreading FUD?

I have the logins. I'll release technical details once it's fixed.

Here's me logged into the admin account (you can see I tried to withdraw his 851 BTC -- still pending):
https://i.imgur.com/l92H3.png


Title: Re: Bitscalper passwords have been leaked
Post by: Raoul Duke on February 14, 2012, 12:35:58 AM
Theymos, have you seen the leaked logins or are you just spreading FUD?

I have the logins. I'll release technical details once it's fixed.

Here's me logged into the admin account (you can see I tried to withdraw his 851 BTC -- still pending):
https://i.imgur.com/l92H3.png

 :o

And btc-e was also compromised https://bitcointalk.org/index.php?topic=63767.msg747080#msg747080


Title: Re: Bitscalper passwords have been leaked
Post by: jothan on February 14, 2012, 02:14:23 AM
Here is what I posted when I checked out Bitscalper a little while ago.

I'm not putting a password on that website. There is no https.

I highly suggest that he invest in an SSL certificate.

He did not even hash his passwords. I'm glad I did not sign-up !


Title: Re: Bitscalper passwords have been leaked
Post by: rjk on February 14, 2012, 02:18:56 AM
Here is what I posted when I checked out Bitscalper a little while ago.

I'm not putting a password on that website. There is no https.

I highly suggest that he invest in an SSL certificate.

He did not even hash his passwords. I'm glad I did not sign-up !
Why, do you use the same password for everything? :P


Title: Re: Bitscalper passwords have been leaked
Post by: jothan on February 14, 2012, 02:21:51 AM
Here is what I posted when I checked out Bitscalper a little while ago.

I'm not putting a password on that website. There is no https.

I highly suggest that he invest in an SSL certificate.

He did not even hash his passwords. I'm glad I did not sign-up !
Why, do you use the same password for everything? :P

No, I use a password manager for everything valuable.

No SSL for inputting passwords is a very bad omen in my book. I work in email security, so I am generally paranoid.


Title: Re: Bitscalper passwords have been leaked
Post by: rjk on February 14, 2012, 02:30:05 AM
No SSL for inputting passwords is a very bad omen in my book. I work in email security, so I am generally paranoid.
Too true :( It amazes me that it is still impossible to send email in anything but unsecured form. Sure you can have SSL between the client and server on both ends, but in the middle its still unencrypted.


Title: Re: Bitscalper passwords have been leaked
Post by: mb300sd on February 14, 2012, 02:35:55 AM
No SSL for inputting passwords is a very bad omen in my book. I work in email security, so I am generally paranoid.
Too true :( It amazes me that it is still impossible to send email in anything but unsecured form. Sure you can have SSL between the client and server on both ends, but in the middle its still unencrypted.

There is PGP. But you do have to set it up yourself. I guess the main reason it hasn't taken off is because most secure email is within a single organization or between trusted organizations. I'm a MS Exchange admin, and you definitely can configure encrypted server-server links, but both ends have to be set up for it.


Title: Re: Bitscalper passwords have been leaked
Post by: jothan on February 14, 2012, 02:40:21 AM
No SSL for inputting passwords is a very bad omen in my book. I work in email security, so I am generally paranoid.
Too true :( It amazes me that it is still impossible to send email in anything but unsecured form. Sure you can have SSL between the client and server on both ends, but in the middle its still unencrypted.

There is PGP. But you do have to set it up yourself. I guess the main reason it hasn't taken off is because most secure email is within a single organization or between trusted organizations. I'm a MS Exchange admin, and you definitely can configure encrypted server-server links, but both ends have to be set up for it.

End-to-end encryption and security is the way to go, but it needs user involvement and education.

For passwords, something like SRP over HTTPS would be just about bulletproof, except for the untrustable javascript crypto implementation.

See http://www.matasano.com/articles/javascript-cryptography/ for a full discussion of javascript cryptography.


Title: Re: Bitscalper passwords have been leaked
Post by: markio on February 14, 2012, 03:36:46 AM
Theymos is the Hero of Winterfell...


Title: Re: Bitscalper passwords have been leaked
Post by: Matthew N. Wright on February 14, 2012, 07:09:35 AM
I guess it wouldn't surprise anyone here to know that when KalyHost went down over that one weekend a few weeks back, the reason BitScalper was freaking out is because if he never bothered to backup the wallets OR his site's code.


Title: Re: Bitscalper passwords have been leaked
Post by: splatster on February 14, 2012, 09:11:32 AM
The fact that they didn't have SSL says even more about their [il]legitimacy.
I'm glad I didn't fall victim to this.


Title: Re: Bitscalper passwords have been leaked
Post by: Raoul Duke on February 14, 2012, 02:15:08 PM
The fact that they didn't have SSL says even more about their [il]legitimacy.

Yes, because only legitimate persons can get a free SSL cert at startcom.  ::)


Title: Re: Bitscalper passwords have been leaked
Post by: cablepair on February 14, 2012, 02:17:45 PM
The fact that they didn't have SSL says even more about their [il]legitimacy.

Yes, because only legitimate persons can get a free SSL cert at startcom.  ::)

lol

not to mention anyone with a linux box can install openssl and generate their own cert, it really means nothing unless its a cert from a reputable certification agency



Title: Re: Bitscalper passwords have been leaked
Post by: toffoo on February 14, 2012, 03:14:31 PM
So what's the story here, has anybody been able to pull any deposits out since this news hit or are the coins officially gone?


Title: Re: Bitscalper passwords have been leaked
Post by: marked on February 14, 2012, 03:39:05 PM
Clearly there was no validation on input on the sql statements.

I'm currently seeing password in cleartext on an error page, across a non-encrypted link.


Error 1054 : Unknown column 'readable' in 'field list'

SQL = [UPDATE spyuser SET readable ='PASSWORD' WHERE email = 'user@example.com']
Array (
  • => Array ( [file] => /var/www/p/app/database.php [line] => 19 [function] => db_report_error [args] => Array (
  • => UPDATE spyuser SET readable ='PASSWORD' WHERE email = 'user@example.com' ) ) [1] => Array ( [file] => /var/www/p/app/index.php [line] => 14 [function] => db_query [args] => Array (
  • => UPDATE spyuser SET readable ='PASSWORD' WHERE email = 'user@example.com' ) ) )

    [/tt]



Title: Re: Bitscalper passwords have been leaked
Post by: bitscalper on February 15, 2012, 12:37:49 PM
Because of personal freedom concerns, management of bitscalper was forced to leave the site alone for the last ten days. We did just notice the security breach and we do apologize about any issue that this might cause. We want to clarify that we did not store any password in plain text, rather the server was compromised to add a textual password column to the database, supposedly for the hacker to get all the user's passwords.
We did store all the passwords in MD5, while we acknowledge that it is not the state of the art, it still works for decently choosen passwords. We will be posting any update/finding on here. Thanks and apologizes for delaying intervention.


Title: Re: Bitscalper passwords have been leaked
Post by: Nachtwind on February 15, 2012, 12:49:40 PM
umm.. md5 is not just not State of the Art - md5 is just as good as plaintext for almost every password with a length of less than maybe a quadrillion characters..


Title: Re: Bitscalper passwords have been leaked
Post by: caveden on February 15, 2012, 12:53:45 PM
What you're saying doesn't make much sense to me.

If the passwords were hashed (even unsalted MD5), how could an attacker create a clear text column with everybody's password? At most he would get some through rainbow tables, but not all.

Unless the attacker actually manage to inject code into your server. That would be a more serious flaw, not just a password leak. And still, he would only be able to get the clear version of each password after everybody logs in.


Title: Re: Bitscalper passwords have been leaked
Post by: Nachtwind on February 15, 2012, 12:55:26 PM
What you're saying doesn't make much sense to me.

If the passwords were hashed (even unsalted MD5), how could an attacker create a clear text column with everybody's password? At most he would get some through rainbow tables, but not all.

Unless the attacker actually manage to inject code into your server. That would be a more serious flaw, not just a password leak. And still, he would only be able to get the clear version of each password after everybody logs in.

Well.. if you had a look at the javascript of bitscalper you would have spotted theyre actually using md5 hashed passwords.. so i guess he is not lieing about that..
Looking at the list of withdrawals: Any word to those.. i guess 70 or 80 people who try to cash out? Will they get their BTC back?


Title: Re: Bitscalper passwords have been leaked
Post by: theymos on February 15, 2012, 01:46:51 PM
Because of personal freedom concerns, management of bitscalper was forced to leave the site alone for the last ten days. We did just notice the security breach and we do apologize about any issue that this might cause. We want to clarify that we did not store any password in plain text, rather the server was compromised to add a textual password column to the database, supposedly for the hacker to get all the user's passwords.
We did store all the passwords in MD5, while we acknowledge that it is not the state of the art, it still works for decently choosen passwords. We will be posting any update/finding on here. Thanks and apologizes for delaying intervention.

The security vulnerability I used still exists. Read the email I sent to info@bitscalper.com.


Title: Re: Bitscalper passwords have been leaked
Post by: caveden on February 15, 2012, 02:49:13 PM
What you're saying doesn't make much sense to me.

If the passwords were hashed (even unsalted MD5), how could an attacker create a clear text column with everybody's password? At most he would get some through rainbow tables, but not all.

Unless the attacker actually manage to inject code into your server. That would be a more serious flaw, not just a password leak. And still, he would only be able to get the clear version of each password after everybody logs in.

Well.. if you had a look at the javascript of bitscalper you would have spotted theyre actually using md5 hashed passwords.. so i guess he is not lieing about that..

I'm not disputing that. But it seems the exploit allowed the retrieval of clear text passwords. If they are not stored in clear text, how would that be possible?

But wait, you're saying that there's a javascript performing the hash on the client? That's pretty much the equivalent of storing them as clear text.


Title: Re: Bitscalper passwords have been leaked
Post by: Matthew N. Wright on February 15, 2012, 02:56:56 PM
What you're saying doesn't make much sense to me.

If the passwords were hashed (even unsalted MD5), how could an attacker create a clear text column with everybody's password? At most he would get some through rainbow tables, but not all.

Unless the attacker actually manage to inject code into your server. That would be a more serious flaw, not just a password leak. And still, he would only be able to get the clear version of each password after everybody logs in.

Well.. if you had a look at the javascript of bitscalper you would have spotted theyre actually using md5 hashed passwords.. so i guess he is not lieing about that..

I'm not disputing that. But it seems the exploit allowed the retrieval of clear text passwords. If they are not stored in clear text, how would that be possible?

But wait, you're saying that there's a javascript performing the hash on the client? That's pretty much the equivalent of storing them as clear text.

+2


Title: Re: Bitscalper passwords have been leaked
Post by: rjk on February 15, 2012, 06:39:25 PM
What you're saying doesn't make much sense to me.

If the passwords were hashed (even unsalted MD5), how could an attacker create a clear text column with everybody's password? At most he would get some through rainbow tables, but not all.

Unless the attacker actually manage to inject code into your server. That would be a more serious flaw, not just a password leak. And still, he would only be able to get the clear version of each password after everybody logs in.

Well.. if you had a look at the javascript of bitscalper you would have spotted theyre actually using md5 hashed passwords.. so i guess he is not lieing about that..

I'm not disputing that. But it seems the exploit allowed the retrieval of clear text passwords. If they are not stored in clear text, how would that be possible?

But wait, you're saying that there's a javascript performing the hash on the client? That's pretty much the equivalent of storing them as clear text.

+2
Can we please make javascript illegal? Thanks.


Title: Re: Bitscalper passwords have been leaked
Post by: Wandering Albatross on February 15, 2012, 06:42:38 PM
Quote from: rjk
Can we please make javascript illegal?

Yes, agree, it's a huge exploit running in every browser.  These forums suffered from javascript exploits  recently...maybe you knew that already.


Title: Re: Bitscalper passwords have been leaked
Post by: RaggedMonk on February 15, 2012, 09:34:46 PM
But wait, you're saying that there's a javascript performing the hash on the client? That's pretty much the equivalent of storing them as clear text.

This is how most modern websites work.  You have to hash your password somewhere, so you do it locally in your browser on your machine before transmitting it.  Take a deep breath, guys.

If plaintext passwords were stolen, either the attacker modified the code of the website to prevent pre-transmisssion hashing, or passwords were not salted before they were hashed, so the attackers just brute forced a rainbow table.


Title: Re: Bitscalper passwords have been leaked
Post by: rjk on February 15, 2012, 09:49:37 PM
But wait, you're saying that there's a javascript performing the hash on the client? That's pretty much the equivalent of storing them as clear text.

This is how most modern websites work.  You have to hash your password somewhere, so you do it locally in your browser on your machine before transmitting it.  Take a deep breath, guys.

If plaintext passwords were stolen, either the attacker modified the code of the website to prevent pre-transmisssion hashing, or passwords were not salted before they were hashed, so the attackers just brute forced a rainbow table.
Uh, no. Maybe, just maybe, if someone was using SSL... which this site wasn't. But "most modern websites"? Utter BS.


Title: Re: Bitscalper passwords have been leaked
Post by: caveden on February 16, 2012, 03:01:32 PM
But wait, you're saying that there's a javascript performing the hash on the client? That's pretty much the equivalent of storing them as clear text.

This is how most modern websites work.  You have to hash your password somewhere, so you do it locally in your browser on your machine before transmitting it.  Take a deep breath, guys.

If you're sending the hash to the server for authentication, hashing has no point: if your database leaks, anybody in possession of the leak can authenticate himself as any of your users. Remember the client is in control of whatever he sends to your server. He doesn't need to execute the javascript you send him, he can forge any requests as he pleases.

The whole point of hashing a password instead of storing it in clear text is to prevent issues in case of a database leak. The hashing operation must be done in the server.


Title: Re: Bitscalper passwords have been leaked
Post by: caveden on February 16, 2012, 03:03:45 PM
This is how most modern websites work.  You have to hash your password somewhere, so you do it locally in your browser on your machine before transmitting it.  Take a deep breath, guys.

If plaintext passwords were stolen, either the attacker modified the code of the website to prevent pre-transmisssion hashing, or passwords were not salted before they were hashed, so the attackers just brute forced a rainbow table.
Uh, no. Maybe, just maybe, if someone was using SSL... which this site wasn't. But "most modern websites"? Utter BS.

SSL wouldn't be of any help. Hashing in the client and authenticating the hash == storing passwords in clear text.

To be honest, it is a little less bad than storing clear passwords because at least a leak wouldn't allow an attacker to screw users who use the same password on different sites. But in what concerns your server, it is the same.


Title: Re: Bitscalper passwords have been leaked
Post by: rjk on February 17, 2012, 05:37:42 PM
This is how most modern websites work.  You have to hash your password somewhere, so you do it locally in your browser on your machine before transmitting it.  Take a deep breath, guys.

If plaintext passwords were stolen, either the attacker modified the code of the website to prevent pre-transmisssion hashing, or passwords were not salted before they were hashed, so the attackers just brute forced a rainbow table.
Uh, no. Maybe, just maybe, if someone was using SSL... which this site wasn't. But "most modern websites"? Utter BS.

SSL wouldn't be of any help. Hashing in the client and authenticating the hash == storing passwords in clear text.

To be honest, it is a little less bad than storing clear passwords because at least a leak wouldn't allow an attacker to screw users who use the same password on different sites. But in what concerns your server, it is the same.
Yes that was my point.