Yahoo’s Latest Billion Breach!

The scale of a second Yahoo data breach is massive, but although the attack took place in 2013 it is only in December 2016 that Yahoo made this public, because even they did not know about it until November 2016!

Some-time around August 2013, hackers penetrated the email system of Yahoo, one of the world's largest and oldest providers of free email services.

The attackers quietly scooped up the records of more than 1 billion users, including names, birth dates, phone numbers and passwords that were encrypted with an easily broken form of security.

The intruders also obtained the security questions and backup email addresses used to reset lost passwords valuable information for someone trying to break into other accounts owned by the same user, and particularly useful to a hacker seeking to break into government computers around the world: Several million of the backup addresses belonged to military and civilian government employees from dozens of nations, including more than 150,000 Americans.

No one knows what happened to the data during the next three years. But last August, a geographically dispersed hacking collective based in Eastern Europe quietly began offering the whole database for sale, according to Andrew Komarov, chief intelligence officer at InfoArmor, an Arizona cybersecurity firm, who monitors the dark corners of the internet inhabited by criminals, spies and spammers.

Three buyers, two known spammers and an entity that appeared more interested in espionage, paid about $US300,000 each for a complete copy of the database, he said.

The attack, which Yahoo disclosed recently, is the largest known data breach of a company. And neither Yahoo nor the public had any idea it had occurred until a month ago, when law enforcement authorities came to the company with samples of the hacked data from an undisclosed source.

Yahoo still does not know who broke into its systems in 2013, how they got in or what they did with the data, the company said. It has made more progress tracking down a separate hacking episode in 2014, which compromised 500 million email accounts and was disclosed in September. The company has said it believes the 2014 attack was sponsored by a government entity but has not identified it.

The two huge breaches revealed this fall threaten to erode consumer confidence in the company and are endangering its deal to sell its internet businesses to Verizon Communications for $US4.8 billion. Yahoo's stock plunged 6 per cent as investors worried that Verizon would abandon the purchase.

Komarov said in an interview that his company obtained a copy of the database and over the last few months alerted military and law enforcement authorities in the United States, Australia, Canada, Britain and the European Union about the breach. After those parties verified the authenticity of the stolen records, he said, some of them went to Yahoo with their concerns.

InfoArmor did not go to Yahoo directly, Komarov said, because the internet giant was dismissive of the security firm when approached by an intermediary. He also said he did not trust Yahoo to thoroughly investigate the breach since it could threaten the sale to Verizon.

Komarov worked in counterterrorism before joining Group-IB, a Moscow security firm. In 2013, he and a colleague left to form IntelCrawler, which drew attention for its work tracking the Syrian Electronic Army and the young hacker behind a large breach of the retailer Target's systems. IntelCrawler was acquired by InfoArmor in 2015.

Yahoo said that it could not verify Komarov's claims, which were made public in a Bloomberg article. "The limited InfoArmor data set provided to us by Bloomberg, based on initial analysis, could be associated with the data file provided to us by law enforcement," the company said in a statement. "That said, if InfoArmor has a report or more information, Yahoo would want to assess that before further comment."

The FBI said in a statement that it was investigating the Yahoo breach. Attorney General Eric T. Schneiderman of New York also said his office was in touch with Yahoo to examine the circumstances of the data breach.

Verizon has said that it is weighing its options, which range from demanding a price cut to walking away altogether. Yahoo may still prove attractive, given the sheer size of its user base. But a huge defection of users would drastically lessen its value to Verizon. Even if Verizon proceeds, it would very likely demand a significant price cut.

The question will be whether the telecom giant can be shielded from potential legal liability.

Security experts and former government officials warned that the real danger of the Yahoo attack was not that hackers gained access to Yahoo users' email accounts, but that they obtained the credentials to hunt down more lucrative information about their targets wherever they resided across the web.

That database of 1 billion Yahoo accounts is still for sale, although current bids are coming in at $US20,000 to $US50,000 since the data is much less valuable now that Yahoo has changed the passwords.

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