Cryptocurrency Attacks Escalate as Fraudsters Strike Classic Ether Wallet and Bithumb

July 7, 2017 @ 7:20 AM
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2 min read

Recent attacks against two major cryptocurrency platforms could shake early adopters’ faith in their security. Representatives of the Classic Ether Wallet, an open source account management tool, and Bithumb, a South Korean bitcoin exchange, confirmed that cybercriminals compromised their systems to steal users’ digital funds and personal information last week.

Targeting Ether

Threat actors used social engineering in the attack against Classic Ether Wallet, a tool for managing accounts that use the bitcoin rival cryptocurrency ether, according to Threatpost. A fraudster telephoned the service’s domain provider, 1&1, and impersonated the real owner of Classic Ether Wallet to take over admin rights.

The developers of Ethereum Classic (ETC), which operates a blockchain network for ether, warned users that their funds might be redirected to cybercriminals, Threatpost reported. Meanwhile, Cloudflare posted a page that blocked the Classic Ether Wallet site to warn about the phishing attack.

Cold, Hard Consequences

While cryptocurrency might seem somewhat ephemeral compared to cold, hard cash, a cyberattack like the one against Classic Ether Wallet can have serious consequences. Bleeping Computer reported that the fraudsters may have stolen nearly $300,000 leveraging private keys users exposed when the site was compromised.

To some extent, the damage was contained, since the GitHub version of Classic Ether Wallet remains secure, CryptoCoinsNews reported. Getting any of the stolen cryptocurrency back may be challenging, however, because the threat actors have reportedly been splitting the funds into a series of other wallets to maintain a low profile.

In South Korea, Bithumb was scrambling to respond to the Korea Internet and Security Agency (KISA) after news emerged that cybercriminals broke into an employee’s home PC to gain access to the Ethereum exchange. The International Business Times reported that the cybercriminals managed to steal email addresses and mobile phone numbers, among other personal information. Then, much like the Classic Ether Wallet incident, the fraudsters phoned victims to dupe them into granting access to their accounts.

Bithumb has since pledged to pay back what was taken from victims up to 1 million won ($8,700).

Cryptocurrency Attacks on the Rise

Incidents such as these are becoming more frequent. Fortune noted that Coinbase, a major U.S. exchange, has been targeted by cybercriminals, while another South Korean exchange, Yapizon, was successfully breached just a few months ago. As usage grows, cryptocurrency is becoming a hot target.

Shane Schick
Writer & Editor
Shane Schick is a contributor for SecurityIntelligence.