[Emergency ANN] Bitcoinica site is taken offline for security investigation

[rjk]

This could have been avoided by not using the standard bitcoind rpc interface. If you have your own custom interface in between you can add large amounts of security measures such as withdraw verification and grace time. The hacker will also not be able to look up how your interface works by going to Google.

How do you know? From what we have heard, it has nothing whatsoever to do with the cracking that took place. Or do you have some inside info?

18,000 BTC was withdrawn. If you had a custom interface you could make it piss red flags when it sees a transaction with such a large amount.

When someone steals the actual keys, there is nothing you can do about that.

[bbit]

lame comment is lame

In other words, you sir are a fool.

yet, right 

[ingrownpocket]

He's still 17? People don't age in Asia?

I lol'd

[terrytibbs]

He's still 17? People don't age in Asia?

Well, they most certainly don't grow.

[bbit]

He's still 17? People don't age in Asia?

Well, they most certainly don't grow.

we call them "little people" .....lol

[Tuxavant]

we call them "little people" .....lol

So do their girlfriends.

Damn, I can feel the fires of hell roasting my toes already.

[DeathAndTaxes]

This could have been avoided by not using the standard bitcoind rpc interface. If you have your own custom interface in between you can add large amounts of security measures such as withdraw verification and grace time. The hacker will also not be able to look up how your interface works by going to Google.

How do you know? From what we have heard, it has nothing whatsoever to do with the cracking that took place. Or do you have some inside info?

18,000 BTC was withdrawn. If you had a custom interface you could make it piss red flags when it sees a transaction with such a large amount.

Which does nothing since Bitcoin is irreversible.

ALERT ALERT ALERT You have already been robbed.  Have a nice day.

The most likely attack vector was
a) gain access to rackspace admin console
b) reset root password
c) login as root
d) steal private keys

Speculation I know but we do know that just prior to the "cashout" tx hitting blockchain all the admins were notified of a password change.

So what exactly would a custom RPC do about that?

[rjk]

This could have been avoided by not using the standard bitcoind rpc interface. If you have your own custom interface in between you can add large amounts of security measures such as withdraw verification and grace time. The hacker will also not be able to look up how your interface works by going to Google.

How do you know? From what we have heard, it has nothing whatsoever to do with the cracking that took place. Or do you have some inside info?

18,000 BTC was withdrawn. If you had a custom interface you could make it piss red flags when it sees a transaction with such a large amount.

Which does nothing since Bitcoin is irreversible.

The most likely attack vector was
a) gain access to rackspace admin console
b) reset root password
c) login as root
d) steal private keys

So what exactly would a custom RPC do about that?

And to add more flames to this raging inferno, Rackspace maintains backdoor root accounts on their managed servers to perform backups and maintenance. I'm not sure whether this applies to the cloud servers or not.

[gusti]

This could have been avoided by not using the standard bitcoind rpc interface. If you have your own custom interface in between you can add large amounts of security measures such as withdraw verification and grace time. The hacker will also not be able to look up how your interface works by going to Google.

How do you know? From what we have heard, it has nothing whatsoever to do with the cracking that took place. Or do you have some inside info?

18,000 BTC was withdrawn. If you had a custom interface you could make it piss red flags when it sees a transaction with such a large amount.

Which does nothing since Bitcoin is irreversible.

The most likely attack vector was
a) gain access to rackspace admin console
b) reset root password
c) login as root
d) steal private keys

So what exactly would a custom RPC do about that?

And to add more flames to this raging inferno, Rackspace maintains backdoor root accounts on their managed servers to perform backups and maintenance. I'm not sure whether this applies to the cloud servers or not.

Anything less than an isolated dedicated, unmanaged server, is simply suicide.

[bbulker]

This could have been avoided by not using the standard bitcoind rpc interface. If you have your own custom interface in between you can add large amounts of security measures such as withdraw verification and grace time. The hacker will also not be able to look up how your interface works by going to Google.

How do you know? From what we have heard, it has nothing whatsoever to do with the cracking that took place. Or do you have some inside info?

18,000 BTC was withdrawn. If you had a custom interface you could make it piss red flags when it sees a transaction with such a large amount.

Which does nothing since Bitcoin is irreversible.

ALERT ALERT ALERT You have already been robbed.  Have a nice day.

The most likely attack vector was
a) gain access to rackspace admin console
b) reset root password
c) login as root
d) steal private keys

Speculation I know but we do know that just prior to the "cashout" tx hitting blockchain all the admins were notified of a password change.

So what exactly would a custom RPC do about that?

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

[rjk]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

If the keys are stolen, ANY bitcoind can make the transaction, doesn't have to be on the compromised server.

[organofcorti]

He's still 17? People don't age in Asia?

Well, they most certainly don't grow.

we call them "little people" .....lol

I always wondered where Loompaland was, but I knew that green hair colour was fake.

So, that chocolate factory was one of the first sweat shops, eh?

/offtopicsilliness

[DeathAndTaxes]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind.

Let me make it simple
Nobody is going to use the grace period.  
Nobody is going to use the locked down bitcoind to send a tx.

They are just going to steal the private keys.  No grace period on stolen keys.

There is no server to hack into when the only network-accessible thing is the custom interface.

There always is a server.  Bitcoind has to be somewhere.  If you have access to the server you have access to the keys.  Period.*

It appear the attackers gained access to the server.  Ergo they had access to the private keys.


* Well in theory maybe not with a HSM or TPM.  But even then if the attacker has gained access to the wallet server your security model has already failed, it is just you could get lucky and avoid losing a lot of funds.

[MelMan2002]

So...any news on this yet?  What is Zhou's twitter handle?

[bbulker]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

There always is a server.  Some custom protocol doesn't change the fact that a server exists.  When you send a command using the costom protocol where is going?  Obviously bitcoind is running somewhere.  Your solution is no solution.  Attacker would simply bypass the stupid "interface" hit the real server and steal the private keys.

You do understand the private keys are simply numbers right?  If you have the numbers you have the funds.  Thieves don't need to use the lockdown bitcoind.  They steal the private keys and execute a transaction from anywhere in the world.

Why would you have a custom interface but leave the bitcoind rpc port and ssh open to the public?

[N12]

This is why. You guys completely ignore the magnitude of this, and completely ignore that Bitcoin is an unestablished currency. Being an unestablished currency, it needs a positive sum game far greater than those of established ones to ever hope to compete. Systematically allocating wealth from wealth creators to wealth destroyers as is being done in the Bitcoin world is unsustainable if Bitcoin is to have any value, since it represents a negative sum game in which wealth is continuosly destroyed.

Relax. It is geek currency, hackers are geeks. So they get their share one way or another. In long run it is utterly immaterial for Bitcoin how initial distribution/emission of money is done and who are "early adopters". Actually, the quicker "early adopter" lion share of Bitcoin is diluted, the better.

Vladimir, I have the biggest respect for you and cypherdoc, and because of this it amazes me how you guys only can be so oblivious to the social dynamics at play here. If Bitcoin keeps destroying value instead of creating value, the market will simply drop it. Not even to mention the image problems Bitcoin already has with anyone who is not already a Bitcoiner (couple ten k guys). We cannot continue at this rate and transfer hard earned Bitcoins from market participants to hackers, scammers and leeches forever expecting Bitcoin to have any value.

You say it is transferred from early adopters to geeks, but this has not at all been true lately. The only example I know of would be allinvain with his 25k coins if his report was true.

Consider also the cost of securing Bitcoins (this substracts from BTC value) and the barrier of entry it creates. I say these continuous gigantic (in terms of money supply %) thefts from large Bitcoin sites do hurt Bitcoin over the long run.

I am even thinking that this could be a similar attack to what happened with MtGox and all the other sites in summer/fall because MtGox and GLBSE were also targeted the past week. Which $$$ oriented hacker would redirect the site to Meatspin instead of a wallet.dat stealer or other malware? Ie possibly a coordinated attack on all infrastructure by someone who doesn’t like Bitcoin.

Disclosure: I hold Bitcoins and had no funds at Bitcoinica.

[MrTeal]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

There always is a server.  Some custom protocol doesn't change the fact that a server exists.  When you send a command using the costom protocol where is going?  Obviously bitcoind is running somewhere.  Your solution is no solution.  Attacker would simply bypass the stupid "interface" hit the real server and steal the private keys.

You do understand the private keys are simply numbers right?  If you have the numbers you have the funds.  Thieves don't need to use the lockdown bitcoind.  They steal the private keys and execute a transaction from anywhere in the world.

Why would you have a custom interface but leave the bitcoind rpc port and ssh open to the public?

Are you intentionally missing their point?

[bbulker]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

There always is a server.  Some custom protocol doesn't change the fact that a server exists.  When you send a command using the costom protocol where is going?  Obviously bitcoind is running somewhere.  Your solution is no solution.  Attacker would simply bypass the stupid "interface" hit the real server and steal the private keys.

You do understand the private keys are simply numbers right?  If you have the numbers you have the funds.  Thieves don't need to use the lockdown bitcoind.  They steal the private keys and execute a transaction from anywhere in the world.

Why would you have a custom interface but leave the bitcoind rpc port and ssh open to the public?

Are you intentionally missing their point?

Are they implying the hacker would have physical access to the machine? I thought computers could only communicate through ports.

[rjk]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

There always is a server.  Some custom protocol doesn't change the fact that a server exists.  When you send a command using the costom protocol where is going?  Obviously bitcoind is running somewhere.  Your solution is no solution.  Attacker would simply bypass the stupid "interface" hit the real server and steal the private keys.

You do understand the private keys are simply numbers right?  If you have the numbers you have the funds.  Thieves don't need to use the lockdown bitcoind.  They steal the private keys and execute a transaction from anywhere in the world.

Why would you have a custom interface but leave the bitcoind rpc port and ssh open to the public?

Are you intentionally missing their point?

Are they implying the hacker had physical access to the machine?

Yes, close enough when the machine is a VM on a cloud somewhere.

[bbulker]

There is nothing to reverse if the transaction is canceled during the grace time before it is executed on bitcoind. There is no server to hack into when the only network-accessible thing is the custom interface.

There always is a server.  Some custom protocol doesn't change the fact that a server exists.  When you send a command using the costom protocol where is going?  Obviously bitcoind is running somewhere.  Your solution is no solution.  Attacker would simply bypass the stupid "interface" hit the real server and steal the private keys.

You do understand the private keys are simply numbers right?  If you have the numbers you have the funds.  Thieves don't need to use the lockdown bitcoind.  They steal the private keys and execute a transaction from anywhere in the world.

Why would you have a custom interface but leave the bitcoind rpc port and ssh open to the public?

Are you intentionally missing their point?

Are they implying the hacker had physical access to the machine?

Yes, close enough when the machine is a VM on a cloud somewhere.

I don't keep my real wallet in a lockbox at a train station and I wouldn't keep a bitcoin wallet on public server at a datacenter.